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Blockbuster Web Reservations to Go National

20 Jul, 2001 By: Joan Villa

In a final debugging of its long-awaited online reservation system,Blockbuster has added a third test city as the last step before a national launch later this year.

Blockbuster.com unveiled online reservations in San Diego this month, joining pilot cities Austin, Texas, and Denver, Colo., where the system has been testing since last October.

After jumping virtually all the technological and operational hurdles of allowing consumer access to store inventories and reservations, the nation’s largest rental chain is apparently looking for a “clear window” to roll out the system nationwide, says Mark Gilman, Blockbuster’sexecutive v.p. and president of the company’s New Media division.

“When we launch this we want it to be the single promotional message wesend to the consumer,” he says.

Blockbuster added the third city to test whether a recent redesign of the Web site would influence behavior, Gilman says.

“In the other two markets we had a lot of data,” he explains. “When we did the relaunch, [we wanted to know] what did that do to consumersbehavior for online rental? And if we started a market from scratch with our new Web site, versus the two markets that already had an onlineexperience but with a completely different Web site, what’s the different dynamics that we see from that?”

Consumers can choose a nearby store and check title availability, creating a dialog that may be the real value of the service toBlockbuster. If they choose, they can also fill out a “profile” form that tells Blockbuster what types of films they like and asks to benotified when certain titles arrive.

“We see the ability to have a direct two-way e-mailing relationship,” he explains. “We can take some of the things we do today, such as direct mail and e-mail, and communicate that way rather than drop a piece of cardboard in the mail.”

This “value-added” convenience is expected to drive incremental sales,since consumers who know their purchases are assured before they leave home will probably rent more, Gilman adds. Results from the initial two cities show consumers “love” the service and use it frequently, he adds.

“The people that are on and using the service typically use it every Friday and Saturday night,” he asserts. “They go in, place their order, confirm their order, then go and pick it up” from a specially designated counter where there is no waiting, since the transaction has beensecured online with a credit card, Gilman says. Online prices are the same as shopping in-store, with no convenience or handling fees. The initiative “wasn’t something we saw as a revenue-generating opportunity for us other than what we believe will be incremental behavior on the consumers’ part,” he says.

Research director Greg Durkin of New York-based Alexander & Associates believes the online reservation system is a strong concept because it isdesigned to complement the in-store experience rather than replace it.“It’s using the Internet as a tool to supplement the brick-and-mortar relationship with the consumer,” he says. “That’s what the Internet isdesigned for in terms of business-to-consumer, to make things easier rather than take over their behavior and try to alter it.”

In addition, online reservations offer “a way of maintaining a goodrelationship,” even if it only appeals to a small percentage of customers.

“It’s well worthwhile for them to do that because they can advertise to that group, so it will pay for itself,” he notes. It also maintains a“friendly and open” relationship with the consumer, and “keeps themhappy.”

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