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Home Video Set to Gobble Up Sales as Holidays Kick Off

27 Nov, 2002 By: Holly J. Wagner

As Black Friday, the biggest shopping day of the year, loomed, retailers prepared for the best or the worst with promotions and events to get consumers' attention and hopefully take their minds off the unstable economy.

Two key indicators of consumer confidence released Tuesday were disappointing, reflecting the uncertain environment and fears of an impending war with Iraq, although a Commerce Department report Wednesday showed consumer spending up in October, renewing hopes that the retail season won't be a disaster.

Even mass merchants were feeling the pinch. Early last week, Wal-Mart projected a scant 2 percent to 4 percent increase in sales for November, blaming an unfair comparison to last year's earlier Thanksgiving week for making the four-week sales figure “difficult to gauge.”

Wednesday's circular promoted specials, including an Apex DVD player for $48.76 and a Symphonic DVD/VCR combination for $98.87, both available to customers who shopped between 6 a.m. and 11 a.m. Friday.

But late-rising shoppers could still find Xbox and Playstation 2 consoles for $199.94 each and a handful of DVD titles offered at two for $10.

Bankrupt Kmart delayed its third-quarter financial reports until after Black Friday, hoping to bolster its bottom line.

Adding to mass merchants' angst was a leak of Black Friday pricing posted online a week before the holiday. Wal-Mart and Target sued to force the proprietors of FatWallet.com to take down the post, but by then the digital cat was out of the virtual bag. At press time, it was unclear whether merchants would stick to the prices that chain employees purportedly leaked.

Among the better deals: A DVD player at Best Buy for $69.99, with an on-the-spot $30 rebate to bring the price to $40. OfficeMax listed the Go Video combination DVD/VCR for just $100 and Target listed the same console for $138. A rewritable DVD-R/RW drive was going for just $170 at OfficeMax. Staples listed a CD/DVD-ROM drive for PCs at $79.98, but $40 in instant rebates would bring the prices down -- for the swift. Like many other chains listed in the FatWallet.com documents, the chain was offering specials for just four or five hours after opening Friday, hoping to pack the aisles early.

Kmart was to offer selected holiday VHS titles for 88 cents each and DVD titles for $2.50. The chain was also offering a DVD player for $68.99 to customers shopping between 5 a.m. and 11 a.m. Friday.

Free shipping and skating on sales tax helped e-tailers to early gains in seasonal shopping, but it was unclear whether their edge would hold as shipping days grow short. Meanwhile, online VOD provider Movielink, launched on Nov. 11, offered a $2 discount to first-time users, perhaps as a respite from mall crowds. The site was also touting portability, urging users to watch the films on laptops.

Online, Best Buy was offering DVDs as low as $6.29, although it wasn't easy to find titles at that price. The chain launched a new holiday advertising campaign plugging the realism of DVD and earlier announced plans to staff up 30 percent for the holidays. The first 500 customers visiting the chain's stores Saturday were to receive commemorative Paul McCartney backstage pass lanyards, which are also game pieces eligible for a chance to win a trip to London and a tour of Abbey Road studios.

Video specialty stores and chains were going all-out to plug holiday bargains and hanging their hopes on two big new releases.

“It's usually a busy rental weekend, but with Ice Age and Men in Black II, we expect rentals and sales to be high,” predicted Todd Zaganiacz, buying group president and owner of Video Zone in South Deerfield, Mass. “Plus, it's supposed to be a very cold weekend here, with a threat of snow, so with all that in play, it will be at least equivalent to last year -- and probably better.”

The New England Buying Group's 42 stores expect a busier-than-usual Thanksgiving weekend, thanks in part to inclement weather.

While no special Thanksgiving promotions have been publicized, Zaganiacz said he may take advantage of the extra foot traffic to test an in-store $9.99 DVD sale on all previously viewed movies. The price point would “entice more sales and early Christmas shopping,” although Zaganiacz said he is reluctant to abandon pricing of $12.99 each or three for $30, which “9.7 times out of 10” results in the $30 sale, he explained.

“I don't want to jump the gun and from now on do all DVDs at $9.99, but it's a good chance to experiment to see whether we should be at that price point yet,” he said.

“It's going to be a great holiday season for us,” said Ted Innes, SVP of marketing at Movie Gallery. The 1,697-store chain began aggressive holiday promotions last week in time for the Thanksgiving kick-off, leveraging the bounty of hit movies already released and more on the way.

“We're focusing a lot on sellthrough products, which is something we have not done in the past,” said Innes. “There are a lot of great titles we're pushing, like Ice Age and Men in Black II, which came out this week.” The chain will promote gift cards, rental cards and preorders of certain hit releases with a free rental giveaway as the holiday progresses, Innes said.

Many Movie Gallery stores have expanded their game sections to expand service to core customers and take advantage of the influx of irregular customers.

“This is one of the biggest weeks of the year. People rent when they have a lot of time on their hands … and we tend to see people we don't see coming in every week or even every two weeks.”

Hollywood Entertainment Corp. will give its customers the bird this year with a special “Free Flick With A Cajun Kick” promotion. Launched Monday, the promotion offers customers at participating Popeyes Chicken & Biscuits restaurants a free rental certificate good for all new releases, DVDs and catalog movies from Hollywood Video with the purchase of any combo or family combo meal at the regular menu price while supplies last.

“We are very excited to forge a national relationship with Hollywood Video that will expand our marketing reach and help us build relationships with new customers,” said Popeyes president Jon Luther. “We are thrilled to distribute over 7 million free Hollywood Video movie certificates to our customers nationwide. It's our special way of thanking them for lovin' that chicken from Popeyes.”

Blockbuster Video executives expect the free rental with purchase program running through Dec. 16 to bring in customers over Thanksgiving and into the holidays, and further its sellthrough push. Under the program, members who purchase any new movie on DVD or VHS earn a credit good for one free full-week rental from among eligible new releases or catalog titles.

“This is a really big time for us, both from a rental and retail perspective,” a spokesperson said. “This is the first year we're pushing retail in stores.”

Blockbuster is also putting muscle behind Men in Black II and Ice Age, which streeted Nov. 26 and are expected to generate the biggest business over the Thanksgiving weekend.

“Generally, the movies that top that [weekly Blockbuster Hit List] are the new releases,” the spokesperson said.

The parade televised for many years as the Hollywood Christmas Parade re-emerged over the Thanksgiving weekend as The Blockbuster Hollywood Spectacular. Founded in 1929, the newly Blockbuster-sponsored event is scheduled for an hour-long special on NBC Dec. 8, including highlights of a pre-parade show featuring performances by singers Destiny's Child and LeAnne Rimes, magician David Copperfield and a “sneak peek” at Disney's new live “Aladdin” musical. The event was expected to draw more than a million spectators.

Kurt Indvik, Enrique Rivero, Joan Villa and Jessica Wolf also contributed to this report.

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