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Video Rentail Transforms for the Holidays

10 Nov, 2002 By: Kurt Indvik

I paid a visit to my local Blockbuster and Hollywood stores over the weekend to see how they were doing as part of their respective chains' continued transformation beyond their traditional rentail business.

It is, indeed, a heady time to be in the home entertainment retailing business as the holidays approach. DVD has fueled a paradigm shift in the home video industry from one of pretty much strictly rental to a significant focus on retail (both new and used); from one of just home video to now include a significant focus on video game software. And from what I saw, most shoppers seemed to be taking these transformations in stride, even amid obvious signs of transition and disarray.

Over at my Blockbuster there was no question the message was “Buy Your Videos Here!” The new store remerchandising plans were pretty much completed, with a dramatic sellthrough area greeting visitors entering the store and “Buy It” signs facing front and center. A large banner hanging over the center of the store floor proclaims a special for all previously viewed DVDs for sale at $9.99 and all previously viewed VHS for $4.99. There was also a significant section of new movies for sale and shelf talkers heralding the chain's “Price Match Guarantee” on new video sales, promising that “For all new movies for sale at participating Blockbuster stores we will meet any valid advertised price from a local store stocking the same new item in a manufacturer's sealed packaged,” a flyer at the front counter informed.

Limiting as we all know the offer to be, nevertheless it's a brilliant positioning message from Big Blue that customers can be fairly confident they're getting a good deal on new video purchases. Indeed, the flyer detailing the guarantee also advertised the availability at $19.99 for such upcoming new releases as Star Wars: Episode II — Attack of the Clones, Spirit: Stallion of the Cimarron, Ice Age, Men In Black II, Austin Powers in Goldmember, XXX and others.

Interestingly enough, while the focus on the sellthrough section and New Release wall (where DVD and VHS have been combined) have transformed these areas, the catalog rental areas both for DVD and VHS seemed a bit in disarray. Large sections of shelf lay empty, some areas of DVD were presented face out while other sat spine out. Genre signage seemed missing on others. I did not bother to ask the clerks in what state of transition these areas were, as they seemed awash in videos behind the counter, but I can only sympathize with customers who were trying to find an old favorite on VHS.

Meanwhile, over at my local Hollywood Video, the store was in fairly good shape, as it had been reconfigured some six months or so prior, again emphasizing a growing selection of catalog DVD, as well as a substantial presence of previously viewed video offerings in DVD and VHS and end caps on almost all the aisles. But dramatic change is on the horizon here, too. Two large storage containers stood in the parking lot, stacks of new game hardware were piled in a corner inside and a sign warning of the store's eminent closure for a day foretold a new Game Crazy store-within-a-store coming to my town soon.

The winds of change are blowing and while it often means temporary chaos. But out of such chaos will come a new home entertainment retail environment that is dramatically changing before our eyes.

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