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Retailers Undergo Summer Makeover

21 Aug, 2008 By: Erik Gruenwedel

Facing a tough economic climate, some packaged-media retailers are upgrading stores, displays and product selections in an effort to improve customer satisfaction and transform back-to-school shoppers into fourth-quarter regulars.

Circuit City Stores partnered with Microsoft to provide sales personnel with handheld PCs that grant immediate access to product recommendations, demos, usage questions and competitive pricing for myriad items, including entertainment.

“We knew we had to create a more consistent approach to how we engaged guests in our stores,” said Dave Romero, senior manager of new concepts for Circuit City.

David Gruehn, U.S. retail industry director at Microsoft, said retailers are pressured to stay on top of all the latest trends while at the same time ensuring competitive pricing, clean stores and well-stocked shelves.

Entertainment retailers upgrading their in-store consumer experience with increased capital expenditures include Movie Gallery, Trans World Entertainment’s f.y.e. chain and Hastings Entertainment.

“Companies have been rolling out in-store improvements to sell more merchandise,” said Ed Woo, media analyst with Wedbush Morgan Securities in Los Angeles.

Blockbuster Inc., which saw a 12% revenue increase when it began test-marketing 30 prototype Rock the Block concept stores, said it would separately implement so-called White Tornado Plus renovation to about 600 stores this year and next.

Spokesperson Randy Hargrove said changes include new paint, fixtures, carpet and lower-hanging store shelves for kids, among other improvements.

Unlike Rock, which is aimed at a technology-savvy customer comfortable using kiosks and interactive displays, Tornado also looks to enhance select areas of a store, including video games, children’s area and fountain beverage.

“White Tornado is just a better Blockbuster store without these other high-tech enhancements,” said CEO Jim Keyes.

He said early rollouts of Tornado had produced a 7% revenue increase, which the executive said underscored the short-term importance of physical distribution over digital distribution.

“If we keep getting those results, you will see us accelerate the deployment of them,” Keyes said.

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