Australian Convenience Store News & C-Store Exhibitions

Over the years, some convenience stores have tried video rentals with mixed results. The main difficulties with video rentals are keeping the stock fresh, administration difficulties, stock shrinkage, low margins and competition from dedicated video rental outlets. For a time, a number of organisations were offering turn-key video retail operations for convenience stores, but no longer.

Today, the action may well be in videos and DVDs for outright sale rather than rental. Video sales are now starting to happen in newsagents as well as some convenience stores, but videos are a still long way from becoming a recognised convenience product.

The video market is now divided into two segments - first release and older product. First releases have been selling for anything between $20 and $30 or more per title. But that's not where the volume sales lie for convenience outlets. There are now hundreds of older titles on the market retailing for $5 to $10 in VHS and about $10 to $15 in DVD.

"This makes video a perfect impulse product," says Jeff Eagle, Sales & Marketing Manager for Force Video. His company is one of the smaller independents that is trying to make an impact in the convenience market. "At five to ten dollars each, customers can buy a video for about the same price as renting one. That's why videos make great stocking fillers for Christmas and terrific entertainment for the holiday period."

Mr Eagle said that, in the cheaper end of the market, about ninety per cent of unit sales are VHS, with the balance made up by DVDs. Most operators provide product on sale or return.

The variety in older titles is almost endless with categories for - kids, sci-fi, martial arts, classic comedy, nostalgia, westerns, adult and so on. The mix that works at any given site needs to be fine tuned to suit the customer base. "Some sites stock only adult titles and do very well," said Mr Eagle.

A spokesman for Payless Video in Sydney said that convenience stores "have never shown any interest in stocking videos, but I think they could be doing very well with videos but nobody that I know of has put together a proper package for the convenience industry. We've been too busy to do it, but we'd like to look at it if and when the industry shows some interest."

International giant, Paramount Home Entertainment, says it has never done any business with any of the major convenience chains. Neither has Village Roadshow/Warner.

There is a large number of small wholesale video operators throughout the country and, with today's computer and video technology, it is a fairly simple matter to pirate tapes, along with their packaging. CSNews has been told of some suppliers going to far as to duplicate the legitimate agent's name and address when they copy the packaging.

"Pirated tapes are not hard to spot", said one video agent who did not wish to be named. "Usually, the video tape inside the cardboard package is not separately shrink wrapped on a pirated product. Sometimes the tape used is an ex-rental tape that still has some identification on it. But the real give-away is the quality. Pirated tapes are always of inferior quality."

Because pirating is hard to prove or measure in the marketplace and litigation costs are enormous, pirating continues more or less unchecked. CSNews has been advised that any retailer purchasing and selling pirated video product in good faith, believing it to be genuine, has little to fear from the law.