Movie-related licensed merchandise is becoming a staple in many retailers' video departments. With the video release of "Jurassic Park," two new major animated theatrical releases from Disney and a multitude of nontheatrical video lines, 1994 looks like a big year for tie-in items. Continuing sales of "Aladdin," Barney and Warner Bros. licensed merchandise, among others, will also be a factor in 1994.
Such products include movie-inspired figurines, plush toys, toy cars, key chains, T-shirts and posters. While adding color and excitement to the video departments, these tie-in items also generate good margins and incremental sales, said retailers.
But with floor space at a premium, retailers will have to make some careful decisions about which licensed products to bring in. In many cases, merchandising support will be as important as the titles themselves, said industry observers.
It's no secret that "Jurassic Park" will help set the pace, with toys, T-shirts, key chains, movie mementos and all things in between. With the title setting world box-office records, to say there is excitement in the air is to understate the obvious.
"My 17-year-old saw it five times at the theater," said a buyer whose son serves as an unofficial video consultant. "He's not a little kid, and he's already asking when it will be available on video," and what will go with it.
The success of "Jurassic Park" and "Aladdin," among others, will drive product tie-ins to new heights. "More licensed products than ever before will be available in the future," said Gary Schloss, vice president of general merchandise at Carr Gottstein Foods, Anchorage, Alaska. "If we get involved, we'll be cautious.
"You can be flooded," Schloss said, "because everybody wants to get in." But if a supermarket makes a bad choice, it gets stuck -- possibly with loads of stuffed animals, glassware and ornaments.
"If licensed product tie-ins are timely," noted Ron Weinstein, president of Block & Stein, Avon, Conn., "supermarket retailers can do well."
The key, Weinstein said, "is to know what is available, and not necessarily accept what the major studios and distributors offer."
To "distinguish yourself from the competition, use monthly promotions and tie-ins," Weinstein urged. It also helps if retailers promote a "recognizable character."
Space also is a concern of many retailers. Be it for licensed products or video cross-merchandising, finding space is often "too difficult," said one retailer. His supermarket chain uses "display shippers" from Disney, MCA and Warner Bros., and it generally participates in rebate offers through Procter & Gamble and Nabisco. It's not a big fan of licensed merchandising, however.
Pricing also is a concern, even though a few retailers contacted by SN said sell-through children's titles coupled with savvy merchandising have given a powerful boost to profits.
"An increasing number are being released," said Shirley Decker, video buyer at Goff Food Stores, Haslett, Mich. "Our sell-through is up almost 200%." And, she noted, "Aladdin" was the "sell-through title" of all-time.
"On occasion, we're cross-merchandising," said Decker, "especially if there's a rebate in the box."
Moreover, the five-store chain looks to boost sales in other ways. "Books on tape are a new avenue for retailers," Decker said. "We're looking at renting
them, as opposed to selling them. And then we'll sell them off as we do previously rented video.
"Our distributor had the idea of renting them for 50 cents a day, sticking with the top 10 and then getting bigger," Decker said.
But is it possible to get bigger than Barney? "We had Barney before the holiday and we sold completely out," Decker said. Disney titles and cartoons did equally well.
Just about everybody acknowledges Disney's leadership in movies and merchandising, but its marketing appeal is not limited to "Aladdin," and its success is not always guaranteed.
"We've had requests for Disney's 'The Fox and the Hound,' " said Brenda Vanover, video coordinator at K-VA-T Food Stores, Grundy, Va. But since the chain had limited success with "Winnie the Pooh" stuffed animals, "we're going to wait and see."
What's hot in movies and merchandising also varies by region and political philosophy. One video buyer told SN her company, located in the nation's breadbasket, had difficulty moving "Free Willy."
"We had extremely good luck with 'Free Willy,' " said Schloss, whose company is headquartered in ecology-minded Alaska. "I was cautious going in, but then put it on an end display, and it sold out. We had to go back for more."
Cross-merchandising with exciting video games also has big-time profit potential, industry buyers said.
"Family Dog," a short-lived MCA/Universal television series backed by Steven Spielberg, "already has a Super Nintendo game to go along with it," said Carl Johnson, video specialist at Harp's Food Stores, Springdale, Ark.
One of the company's keys, said Johnson, is not only understanding movies and merchandising aids, but also knowing who its competition is. In Harp's case, a principal competitor is its next-door neighbor, Wal-Mart Stores.
"We're trying to project ourselves as a low-price leader," Johnson said. "We'll match prices and project the low-price image throughout the store."
Other retailers have had merchandising success by projecting an image of convenience. "Time is valuable to people," said Amy Innerfield, video analyst at Alexander & Associates, New York. "Weekly circulars could point out that customers could shop for food and videos at the same time.
