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| Subject: Competition Update | |
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Author: Dennis S. Vogel |
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Date Posted: 21:28:31 01/23/08 Wed In reply to: Netflix Victim 's message, "Netflix Victim needs more ideas & customers" on 15:50:11 06/30/07 Sat I don’t know how long this article “Video retailers struggle to compete with online services” will be available, but here’s its URL- http://www.mlive.com/business/index.ssf/2008/01/a_disconnect_recording_answers.html Because the fair use copyright law only allows a little quoting, I’ll only include a bit of th content, some of it is paraphrased. In 2007, online rentals claimed 15.9% of the $1.3 billion consumers spent on video rentals, according to Adams Media Research, a CA-based industry analyst. Retail chains held a firm grip on 43% of the market, while other video stores had a 39.2% market share. The remaining 2% was spread among supermarkets, kiosks & other outlets. But Adams is forecasting a 41% increase in online subscriptions this year, pushing sales to $1.9 billion. By 2011, it’s projected to rise 68%, taking the tab to $3.2 billion in sales & a 37.5% share of the video rental market. The market changed in the past 5 years, but people still rent movies, including VHS tapes, and many prefer the in-store experience. DVD sales affect store rentals more than online competitors. Sam's Club shoppers buy newly released DVDs. Until recently, new releases weren’t immediately available for purchase. Diane Edgcombe, Super Star Video manager, said, “There aren't many independents left.'' Customer service is their ace in the hole. "Customers we have are loyal to us,'' she said. "They like to come to the store & choose what they want when they want it. We reserve movies & call people when they come in. We have a personal relationship with the customers.'' DVDs are about 75% of its inventory, but VHS tapes still are in demand, contrary to predictions years ago that DVDs would take over, Edgcombe said. A drawback to online rentals is customers can't always get new releases right away. Another DVD rental option could be in a McD's restaurant or a grocery store soon. Redbox, a vending machine-type set-up, has ambitious expansion plans. Locations in MI include 3 Meijer stores in the Grand Rapids area that are a test market, said Frank J. Guglielmi, Meijer PR director. If the pilot stores prove successful, more Redbox kiosks will be rolled out to other Meijer stores, based on demographics, available floor space & store traffic, he said, adding the feature has been well received in test stores, as customers become aware of it. Customer Service or No Service? It’s up to you to find how many in your area want a lot of service & find what kind of service they want. More may settle for or want very little or no service (human contact). Streamline your business to reduce costs & the level of work you’re required to perform. But also be ready to do more for those who are willing to pay for more service. But while you try to pursue a (low service) niche, don’t invest too much time & money chasing another (high service niche). You probably don’t have enough resources to consistently reach & appeal to each possible prospect. Maybe you can get a vending machine, but I don’t know how you’d run it with rentals & returns. According to what I read years ago, as high tech, low touch increases, high touch (human contact) will be more important to some. Dennis S. Vogel Business survival is only possible if you provide what enough people want & give them compelling reasons to buy it from you. To help you do it, I have free marketing advice & information here - http://www.thrivingbusiness.lakefield.net/ http://www.voy.com/31049/ [ Next Thread | Previous Thread | Next Message | Previous Message ] |
| Subject | Author | Date |
| Applicable For A Variety Of Businesses--Knocking Blockbuster's Block Off | Dennis S. Vogel | 18:28:23 07/16/08 Wed |
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