Says Gerry Hooper, sales director at ChoicesUK: “Once a family of four has bought cinema tickets, popcorn and drinks they are looking at upwards of about £40, whereas the average cost of renting a DVD for 24 hours is £2.50.”
Now under new ownership, ChoicesUK has thrown its weight behind the concept of a ‘Film Night in’. “Over the past three months the symbol groups have really bought into this concept and we are starting to grow our rental account numbers through the convenience sector,” he says.
To encourage more retailers to consider introducing a film library, ChoicesUK is offering low-cost and no-risk trials on libraries for a three-month period.
Hooper says: “Retailers can test it for 12 weeks to see whether it will work for them. We will invest all the time and the effort and they take a percentage of the takings. Then at 12 weeks they say, ‘No, it doesn’t work for me’ or agree to stay with us for longer.”
But will a video library work for every convenience store? Hooper says DVD rentals are ideal for stores taking at least £10,000 a week, on housing estates with a mixed demographic. “Ideally, they should be open late, have an alcohol licence and obviously you don’t want a Blockbuster next door.”
Hooper says rental libraries can also help to build other parts of the business. “Our research found that the average basket spend when someone rented a DVD in convenience went up to £9 (not including the DVD itself). And unlike other products, they have to bring the DVD back so you are getting two hits.”
If the time, effort and cost implications of lost or stolen DVDs put you off opting for an in-store rental library, how about an automated system? Mitchell Leszczyszak, account manager from The Movie Booth, says its fully automated kiosks offer retailers the opportunity to cash in on the Film Night In trend while eliminating the space and staffing costs of a library.
Customers use a touch-screen system to select and rent their movies in three steps. The kiosks are the same size as a single-door upright chiller and hold 620 DVDs.
Since its launch in June 2008, seven kiosks have being on trial in Spar, Nisa-Today’s and Thresher outlets, and The Movie Booth is confident DVD booths could become as popular in the UK as they are in the US. Its website states that in America DVD rental machines now outnumber traditional DVD rental stores, and the 7,000 machines in operation have been placed predominantly in grocery and convenience stores.
Leszczyszak says: “We manage the kiosk remotely and 95% of the problems that occur are managed online. Plus, because we have the card details of renters, the cost of any film that is not returned can be debited directly. This does away with one of the main flaws in the DVD rental sector.”
He adds that the next stage could be cross-marketing. “We have run offers in a couple of stores where if customers rent a DVD they get a discount on a bottle of wine.”
Convenience retailers without a DVD kiosk or library can still cash in on the Film Night In trend, however. Matthew Wilson, Dr Oetker UK head of marketing, frozen and chilled, says that Film Nights In can be profitable for retailers as what’s bought is wide-ranging. He explains: “If friends are coming over it might be a pizza and beer night; if it’s all girls it might be an ice-cream night. On the sweets side it tends to be things like ice cream, or sharing confectionery. On the savoury side snacks such as Doritos or Pringles are needed.”
And Wilson says that healthier eating can go out of the window for the Film Night In occasion. “There has been the growth of healthier foods, but alongside this has been the growth of indulgence. This sounds contradictory but it isn’t when you look over the course of the week. People are generally good Monday, Tuesday and Wednesday and then start to indulge Thursday, Friday, Saturday and Sunday.”
Dr Oetker’s Ristorante range aims to cash in on this trend by positioning itself as restaurant quality with the breadth of choice available from a pizza menu. It says convenience sales are growing about 9% year on year.
Others brands are also seeing an upturn, thanks in part to the credit squeeze. Aoife Kenny, convenience business unit controller at Kepak Convenience Foods, says the drop in first-time house buyers has had an impact on the core customers of its Rustlers brand – males aged 16-24.
She says: “Young people are struggling to get on the property ladder and so we’re seeing more young lads staying in and watching films in their parental homes. Then you also have students and young guys living together to keep the cost of living down. The whole big night in is quite a regular thing.”
Kenny recommends retailers stock Rustler’s three key lines: the Flame Grilled Quarter Pounder, Flame Grilled Chicken burger and BBQ ribs.
Sales of sharing confectionery have also been helped by the culture of socialising at home. Mars’ pouch format, for example, has seen sales rise by 30% in the past three years. According to IRI figures for the week ending July 12, 2008, chocolate sharing bags such as Maltesers, Minstrels, M&Ms and Revels are seeing growth of 7.4%.
Mars trade relations manager Bep Sandhu says: “A display of pouch lines near DVDs is a great link purchase as consumers will be reminded of when they enjoy a movie at a cinema and often treat themselves to these same brands. They can create a similar experience in the comfort of their own homes.”
Jack Pipe, convenience sales director at Kraft Foods, agrees. He says: “The sharing market is becoming a vital area for independent retailers, as budgets are squeezed and more people opt for a night at home with friends rather than spending hard-earned cash on an expensive night on the town.”
He recommends tablets and twistwrap products as key ranges through which independent retailers can increase sales.
The smoking ban and stretched budgets are also driving people to drink more at home. According to the British Beer and Pub Association’s latest figures there was an 11% decline in on-trade beer sales in the second quarter of 2007, with sales at their lowest levels since the great depression of the 1930s.
● According to the British Video Association there are 100 million DVD transactions per year and 70.5% are over-the-counter transactions. It seems that most consumers still opt for purchasing their film in a store rather than online or through a library.
● DVD kiosks and libraries may not work for every convenience store, but retailers can still take advantage of consumers stocking up for their big night in. And this means linking the core purchases of alcohol, snacks and sharing food or offering linked promotions.
● Dr Oetker head of marketing, frozen and chilled, Matthew Wilson says: “It’s fair to say that Film Nights In are probably less healthy than other times of the week. It’s a treat having a film and company round – you don’t tend to invite people round for an evening of salad.”
David Mallory, UK impulse channel controller for E&J Gallo Winery, describes Film Night In as a “growing retailing phenomenon”.
The company been taking advantage of the trend by running a number of promotions, including partnering with crisps and chocolate brands. Mallory says: “Displaying wine next to the food or snacks section, or vice versa, is a good way to grab attention.”
Carol Saunders, head of customer marketing (off trade) at S&N UK, believes technology has also played a part in making Film Night In more popular. She says: “Improved technology such as wide-screen
TVs and high-quality sound systems, coupled with the availability of a wider range of better quality drinks, means that entertaining at home has become an attractive option for more people.”
Saunders adds that downturn in nights out means that retailers have to ensure they are competing with the types of products available in pubs and bars. “Creating the pub experience at home is a key consumer driver, with 81% agreeing that when entertaining friends they like to serve them ‘pub quality’ drinks. Retailers can help deliver this by providing a chilled offering and stocking bags of ice to cash in on the ‘over ice’ opportunity.”
S&N research has in fact found that about a fifth of lager buyers are willing to pay more for a chilled product.
Saunders says the Film Night In occasion also extends to Girls’ Nights In, and over the past three years S&N research has uncovered an increase in females drinking at home to three or more times per week. “Female-led brands such as Jacques and Bulmers Pear can be grouped together along with other items that will appeal to women planning a night in,” she advises.
Diageo Great Britain has also targeted consumers staying in by encouraging them to drink spirits at home. Chris Lock, marketing manager for Smirnoff, says: “Research has shown that many consumers lack the knowledge and tools to make great spirit-based drinks at home, therefore dissuading them from buying spirits.
“By providing consumers with easy solutions to making drinks such as the Moscow Mule at home, we believe this could add as much as £105m incremental profit to the category.”