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SUPERMARKET/DRUG CHANNEL GUIDE: Stores look into new technologies
By Susanne Ault -- Video Business, 4/30/2007
Get new releases of interest to the supermarket/drug channel
APRIL 30 | Supermarkets and drugstores are at the forefront of retail channels looking at digital content delivery for movies. Drugstores such as Walgreens and several supermarket chains have tested or soon will test download-to-burn kiosks for manufactured-on-demand DVDs.
The kiosks, which are designed to create a DVD in a matter of minutes from a digital inventory, have not yet rolled out nationally to any major store chain. But retailers have accelerated their timetables to offer download-to-burn titles since DVD Forum officials agreed on technical specifications to support at-home and in-store disc burning of copy-protected films earlier this year.
The technology is expected to defeat many of the barriers to entry facing grocers and drug chains when they consider managing DVD sections. These retailers usually operate only small sell-through DVD sections or none at all because of relatively slim profit margins and theft concerns.
The Entertainment Merchants Assn.’s Grocers Council is making manufactured-on-demand discs a front-and-center agenda item. Provider Polar Frog Digital planned to demonstrate its latest machines at the Council’s meeting in late April. Representatives from grocers Giant Eagle, Coburn’s and others were expected to be on hand.
Currently, Polar Frog machines are found in a dozen locations, spanning Sprouts Farmers Market, Longs Drugs and military bases, among others. Polar Frog expects to install 6,000 machines at various retailers by 2008.
The company’s kiosk holds 1,800 titles. That represents a big step up in inventory for some drug and grocery outlets, which at most may offer only a handful of releases at any time.
"These technologies are emerging, but they eventually will be technologies for the masses," says Mark Fisher, EMA’s VP of strategic initiatives and membership and head of the Council. "This can be a way for grocers who won’t carry packaged DVD goods because of shrink to be able to offer that medium."
|
Supermarket Top 10 selling DVD titles Q1 2007 |
| 1. Open Season (Sony) |
| 2. Happy Feet (Warner) |
| 3. The Departed (Warner) |
| 4. Flushed Away (DreamWorks/Paramount) |
| 5. Cinderella III: A Twist in Time (Buena Vista) |
| 6. Borat (Fox) |
| 7. Casino Royale (MGM/Sony) |
| 8. Peter Pan: Platinum Edition (Buena Vista) |
| 9. Eragon (Fox) |
| 10. Flicka (Fox) |
| Source: Rentrak Retail Essentials |
Customers of the drug chain, as well as patrons of many groceries, should find it relatively simple to transition into buying DVDs through kiosks because they’re already taking their digital camera files into drug and grocery stores to process the pictures into physical prints.
"Most are really entrenched in the photo processing business, and there are many similarities," says Fisher. "Most of them are already dealing with digital technologies." Approximately 90% of Walgreens’ 5,675 outlets offer in-store digital photo processing, for example.
In-store DVD manufacturing companies see grocery stores as attractive early partners because of the chains’ high foot traffic.
"A large store can get in 25,000 customers a week," says Fisher. "The average customer shops at a grocery store twice a week."
