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Video Cleaning Up on All Aisles

30 Jan, 2005 By: Kurt Indvik

There has never been a doubt that the supermarket is a natural place to market home video. In the days before complicated revenue-sharing programs encouraged many chains to flee from the rental business, all sort of efforts were made to make grocery stores the natural place to get “dinner and a movie.”

While the rental business may never again be so prominent in supermarkets (although, my local Albertson's has a very healthy rental operation), suppliers continue to develop strategies to maximize the opportunity for home entertainment in one of the few places that guarantees the full breadth of demographic visitation at least once a week or so.

And the business is most definitely on the rise, as is evident in a cover story by senior reporter Erik Gruenwedel in this week's Home Media Retailing. Unit sales of video at grocers were up more than 20 percent in 2004 from 2003, according to Nielsen VideoScan data. Aggregate video revenue was up more than 15 percent for the same period.

With catalog pricing coming down on a wide variety of major studio and secondary-supplier titles, DVD is now more of an impulse item than ever. And even though studios have managed to hold up their pricing on major new releases, supermarkets also have been able to selectively participate in some of the first-week frenzy of major sellthrough releases.

Supermarkets also are a natural for any type of children's product, fitness and health videos, and other genres that naturally fit the demographic of moms and kids patrolling the aisles. Indeed, suppliers have been very aggressive in developing a whole range of initiatives that move video offerings out into the store to tie in to all manner of concepts, from generic section offerings on diet to tying into branded co-sponsors on major titles such as soft-drink companies.

And with the continuing battle for shelf space occurring at big-box retailers, suppliers are looking to supermarkets and other retailers where they can spread out their catalog and special interest titles in effective cross-merchandising.

Home entertainment is a sector grocers can continue to grow with product differentiation that will continue to attract the impulse buyer.



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