Sizing up video strategies for drug chains

Drug Store News, August 18, 1997 by Allene Symons

Video displays in drug chains are becoming as common as convenience and snack foods. Both are being offered to meet consumer expectations and bolster front-end business with the upbeat promise of pleasurable consumption.

Pre-recorded video is largely an in-and-out product that defies planogramming. Yet sales benefit from a permanent display where consumers can consistently find new (and sometimes catalog and budget) video titles.

Sell-through video continues to gain momentum each year, reaching $7.5 billion in sales in 1996--and rental continues to decline. Drug chains stand to gain a greater percentage of this growing sell-through pie, and without offering video rental like most other mass channels.

Studios are trying to help drug chains boost their video sales, since, compared to other channels, drug chains have untapped potential for selling more video product. But with around 2,000 new video titles released each year, only a small percentage of these will make it into drug chains.

To carry a title, there must be a persuasive reason--a brand name studio, big theatrical hit, popular TV character, a special-interest trend such as golf or fitness or the nostalgia of famous older films and stars. Incentives from studios--including rebates and product tie-ins and multiple-purchase reward clubs--also help to boost sales.

Below is a sampling of offerings from major studios and their strategies to help drug chains maximize pre-recorded video sales.

* A&E offers product leveraged by its cable channels, A&E and The History Channel, including lines such as its Biography video (and new Biography audio) series, now offered by some drug chains. A&E can provide videos suitable for a variety of demographics, whether it is "Jane Eyre" or "Camelot" and "Bigfoot" or the two-volume "Cats" from its catalog. "We have products that fit different places," noted Tom Haymann, vice president of new media for A&E Television Networks. He added, "The key factor is the brand recognition. People recognize the brand and quality we bring into the home."

* Best Home Video offers family and instructional videos, including classic juvenile titles such as its Benji line, its Cybervision Bobby Jones golf series and fitness titles with brand names including Joan Lunden and "Rejuvenetics" from Longevity magazine.

* According to director of marketing Michelle Fiddler, BMG offers titles in line with drug store pricing. Titles range from a fitness series, "The Firm," to Cabbage Patch titles and the classic "Peter and the Wolf," available at $9.95 SRP. BMG also offers Christmas-themed titles for less than $10, including "Mumfie's White Christmas."

* With its non-theatrical titles ranging from fitness to nostalgic TV titles, Brentwood Home Video positions its offerings as impulse titles at a value price point. It offers several themed, value-priced prepacks, such as its current juvenile Halloween prepack, with all titles less than $10, and 13 titles in its Sports Bloopers series.

* Buena Vista Home Video (a subsidiary of Walt Disney Studios) distributes Disney Home Video, Touchstone, Hollywood Pictures, Miramax, ABC Video and other lines. Its core line for drug chains is Disney Home Video. Its vice president of retail marketing and merchandising Mike Aufricht explained, "Our strategy is to fully understand the chain drug business and focus on doing business with them in a matter that fits their needs and their operational process, and to listen to them rather than to dictate to them."

Besides its hit theatrical titles, a year-round strategy from this studio is its aggressive program of made-for-video (direct-to-video) releases, like this season's animated "Beauty and the Beast: The Enchanted Christmas."

Disney Home Video and many other Buena Vista titles fit drug store shopper demographics, noted Aufricht, citing examples from third and fourth quarter. "We have product for all segments of a family with children, `Mary Poppins,' `Old Yeller,' `George of the Jungle;' products that appeal to children to watch by themselves, such as `Pooh's Grand Adventure: The Search for Christopher Robin,' products that appeal to adults without children, such as `Oprah Winfrey: Make the Connection' (Harpo Home Entertainment, distributed by Buena Vista); and catalog products that appeal to an older demographic that visit drug stores, including main line movies and titles including the `Johnny Carson Collection.'"

Buena Vista titles cut across all price points, including less than $10, and all consumer segments. For example, this fall, Buena Vista is launching a new line of sports videos from ESPN, targeted to the male segment, under its new ABC Video line.

The Disney Video Rewards program (which offers a free eligible video with the purchase of eight or two free with 12 videos) helps retailers generate more sales and blend margin between high-margin (catalog) and lower-margin (hit) titles.

* Cabin Fever offers opportunistic displays, including six-piece single-facing double-tiered units, that make sense in the limited space of drug chains, explained Craig Van Corp, senior vice president of sales. It also offers product priced for drug chains (in the $9.95 to $14.95 range) and an array of nostalgia titles ranging from "Little Rascals" to NASCAR.