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British Retailer Offers Packaged-Media Advice

5 Sep, 2014 By: Erik Gruenwedel

Walmart U.K. subsidiary ASDA says cross-category marketing, lower Blu-ray pricing and bundling needed in the face of expanding subscription streaming presence

With Netflix reportedly launching service in six European countries Sept. 15, and rival Amazon Prime Instant Video upping content spend in the region, retailers across the Atlantic face an unprecedented challenge for consumers’ entertainment spending.

British supermarket chain ASDA, which is owned by Walmart, sells new-release (and catalog) discs — a practice emulated by competitors Tesco and other major chains. With the world’s largest retailer as a corporate parent, ASDA understands the need to think outside the box to sustain margins in a hyper-competitive market.

In an interview with U.K. trade publication Cue Entertainment, Ayaz Alam, recently appointed director of entertainment at ASDA, said the home entertainment industry needs to stop employing decade-old retail marketing practices and cast a wider net through cross-category initiatives that meld new releases with other consumer goods.

Alam, who spent 17 years at ASDA managing general merchandise, food and impulse goods, said he was particularly impressed with Walt Disney Studios Home Entertainment’s efforts around animated hit Frozen — the top-selling disc of the year thus far — as well as Warner Home Video’s marketing surrounding The Lego Movie.

Both studios integrated their titles with ancillary products such as children’s clothing, games, toys and trend items.

“Putting diverse product together enables us to create newness, to do things differently and enable the ASDA [mom] to buy everything in one place,” Alam said.

Indeed, Disney has upped cross-category marketing efforts on select disc titles after former home entertainment executive Bob Chapek was named president of Disney Consumer Products in 2011. Chapek’s influence is notable at Toys “R” Us stores in the United States, many of which feature Disney titles strategically blended together with branded consumer products on shelves and point-of-purchase displays.

“Disney [has done a] great job pulling it all together and creating points of difference. They almost took the Disney Store experience and planted it in ASDA,” Alam said.

The executive said he was pleased to see Warner representatives join the British Video Association in visits to ASDA stores to proactively discuss consumer marketing efforts. Specifically, Alam said the home entertainment industry should plan far earlier in advance for specific events and calendar periods — such as school holidays — to promote select releases involving families.

The executive also said the price of Blu-ray Discs must come down. Alam said the resolution and audio enhancements of Blu-ray must be better communicated to consumers.

He said stores such as ASDA that carry consumer electronics have the benefit of cross-promoting the format by combining BD discs with hardware and related products in displays. At the same time the executive said Blu-ray new release pricing is out of sync with what it costs to buy a BD player.

“The gap in pricing between standard- and high-definition is too high. Blu-ray players are now £30 [$49] to £40 [$65], but there is no movement in disc pricing,” he said.

And therein lies home entertainment’s biggest challenge: Combatting subscription streaming services that offer unlimited access to increasingly fresher content for $9 a month.

“We have to become more creative as an industry — both retailers and suppliers — if we are going to maintain the length of time that catalog exists in its current format,” Alam said.

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