Kmart pumps up the volume in prototype music section - Special Supplement: Video Sell-Through

Discount Store News, July 5, 1993

TAMPA, Fla. -- Sell-through video and an expanded selection of CDs and cassettes were a major focus as Kmart opened the second unit of its Auburn Hills format here in mid-June.

The format, the chain's "store of the future," debuted last fall in Auburn Hills, Mich., also with a major emphasis on prerecorded entertainment.

However, the new unit features a department designed by Handleman, Kmart's major music, video and computer software distributor. In depth and breadth, it outshines anything currently in use in the discount industry.

For instance, the department now features dedicated sections for alternative and contemporary Christian music, a greatly expanded selection of classic horror and adventure movies, deeper selections of children's video, and video installations that play clips from featured movies, like Barney titles and rock videos.

Kmart's apparent strategy is to drop these departments into Kmart stores that offer two things: a format large enough to afford the real estate, and a market that is not particularly competitive in music and video superstores. The Tampa store fits both those parameters. The new store is considerably larger than most Kmarts. In addition, the Tampa market is dominated by chains that offer little more than the top 100 and some catalog back-up. Kmart, in this circumstance, is able to offer its customers a selection that is almost as good -- and at competitive prices -- in an environment the shopper is already comfortable with.

A Handleman representative said that the only stumbling block is possible confusion on the part of the customer. Breaking out alternative rock from mainstream rock, for instance, presents problems for the shopper used to Kmart's traditional department. Is Soul Asylum rock or alternative, and more importantly, in which category will the shopper interested in that artist look first? The same might happen with Amy Grant--country, pop, rock or contemporary Christian? But Kmart expects shoppers to adapt quickly.

More important to Kmart is the real estate question. Will this department offer incremental sales substantial enough to pay for 3,000 valuable square feet of selling space? The jury is still out, although Handleman representatives said the concept will be rolled out to most new stores in coming months. The next department will debut south of Anchorage, Alaska, one merchandiser said.

A Kmart store manager, however, said that the concept "costs too much," and may not be rolled out at all. However, it appears that at least a few more will debut in the coming weeks. Kmart marketing vice president Michael Wellman said at the opening that dozens more of the prototype are scheduled for the coming months.

The Tampa store also marked the debut of Kmart's newest take on computer marketing, featuring 10 extra feet of software and expanded accessories . . . but no hardware.

The software presentation is on a par with the best of Wal-Mart's departments, featuring about 70 different titles, skewed heavily toward entertainment and education, with a sprinkling of top business titles like the personal finance program Quicken. Handleman also racks this department.