TAHLEQUAH, Okla. -- Video still has its sizzle in Reasor's, a 12-store chain based here.
"We try to portray the excitement of the whole industry," said Paul Richardville, Reasor's director of video, who prefers the broader term "entertainment" for his sphere of operations.
To help achieve this, the chain works with a design team from Associated Wholesale Grocers of Kansas City, Kan., to develop striking and spacious display arenas. "We all look at every aspect together," he said of the process, during which an aesthetic concept is carried throughout a store.
The majority of Reasor's 10 rental operations -- which average 3,000 to 3,500 square feet -- adjoin its stores' main floors. "The rental department is a store-within-a-store concept," said Bill Bryant, vice president of sales, grocery and drug, Ingram Entertainment, La Vergne, Tenn. "The stores I visited had dedicated video entrances, as well as access to the video department, from inside the store."
"Most of our departments are segregated into another room entered from the grocery area, and usually from the produce area," Richardville said. In these departments, both entrances have Sensormatic systems securing a live inventory presentation. Others are single-entrance, front-end operations with short-walls providing secured enclosures.
All have flooring that grabs attention. Some have glossy checkerboard tile, but most have boldly patterned carpet in a theatrical style.
And most are wildly colorful, with rainbow-hued neon curves set splashily against black ceilings. The effect is impressively stylish, not at all in the traditional mode of supermarket video.
Instead, the display floor rivals the often theatrical appearance of the most upscale specialists. "Reasor's success is founded upon the basis that they view themselves as a video retailer as well as a supermarket," said Bryant.
The theatrical approach ties into the rest of the store as well. "We have the world's largest concession stands right outside our video departments," said Allen Mills, Reasor's senior vice president.
To complement this image, Reasor's eschews the common wire-rack approach in favor of "a more permanent fixture look," said Richardville. "We've kept wooden racks partly for psychological reasons -- it helps the customer realize that we're going to stay here."
And the chain isn't just staying -- it's growing. "We bought and took over the Price Mart Tulsa [Okla.] stores in a five-store deal," he said. "In the first seven months of last year, we kept very busy opening three video and three photo departments." Richardville also serves as director of photo.
That growth continues with another Tulsa department scheduled to open in March. "We're going with an art deco theme in that one," he said.
Most Reasor's stores are located in Tulsa or its suburbs; the rest are in outlying Oklahoma cities.
And in the bulk of its trade area, the chain has few competitors who are staying the course. Albertson's of Boise, Idaho, maintains video rental departments that Richardville termed "weak," while the Star Video operation in Red Bud Supermarket he characterized as "still doing well."
In addition, there are "Super Video stores in Warehouse Markets around town," he said. "We have more copy depth than them and our departments look better. Those are two things we feel we've conquered our competitors with."
Perhaps in consequence "there aren't that many privately owned video stores in Tulsa any more," he said. Rather, like many others, Reasor's finds itself "basically going up against the Blockbusters and Hollywoods of the world."
Despite the competitors' sometimes strong presence -- both are within stone's throws of the Reasor's in Owasso -- "we stay competitive with $3 new release rentals," he said.
Reasor's follows the video chains' lead in applying this rate to an extended rental period. "We do five-day rentals on everything, even DVDs," he said. "Until Blockbuster or Hollywood goes away I'll run right with them on five-day rentals."
To further compete "we do weekly specials, daily specials, game specials and others on our slow days of the week," he said. And in conjunction with other departments, "our dinner-and-a-movie promotion with deli has brought a lot of people into video."
Also of value is an attractive presentation. "All of our new releases face front," he said. "The studios put a lot of money into box art and we want to use that. It's a draw for some customers, especially in an impulse situation."
And supermarkets have "some inherent advantages over stand-alone video stores," said Mills. "We have a built-in rent factor, a built-in utility factor and built-in foot traffic, along with cheaper insurance costs per square foot. All of that helps."
Richardville emphasized the importance of continual promotion as well in growing the market. "Our biggest tool is the store microphone," he said. "There are thousands of people who come through the grocery section every day, and our job is to induce them into the video department." Trivia contests are one tactic.
Departments are also promoted in the company's weekly flier. "Each week we have a small block telling the newest rental releases and giving our rental rates," he said.
Another growth facet is the development of higher-ticket items. "Our $24.95 holiday gift baskets, with a rental and a movie, were a big success this year," he said. "And our entertainment card offers 10 rentals for $19.95, which is a $30 value. An immense number of people use that."
Sell-through product is also cultivated. "We have our sell-through movies on a roll-around cart out front in the grocery department," he said. "We don't advertise them much -- that's a habit we build with our store customers."
Partly because of these factors, "our stores are coming along fine," he said. "The last few weeks of the year were amazing."
To what does Richardville attribute Reasor's success? "I'd like to say it's the way we're doing it, but we just have a good clientele," he replied. "They've stayed with us rather than jumping ship to the video chains."
Behind that loyalty, though, is the chain's reciprocal commitment. "You have to look at catering to your customer," he said. "I feel very fortunate to work for a company that realizes we need to know our customers to be able to work for and with them. We literally soul-search in areas like traffic flow to make it easier for them."
One concern in this regard is perceived value. "To cater to customers and not get deeply into their pockets, we'll work on volume," he said. "They're going to come back if they're treated right and get a good price."
But cutting margins to build grosses means the operation must run as efficiently as possible. "We have to limit ourselves," he said. "We just don't have the budget to go through the roof and have 200 copies of, say, 'Green Mile.' I might have had 30 at one of my bigger stores."
More typically, however, "On average, 'A' titles we bring in about a dozen copies on VHS and another three or four on DVD for this store," said Tahlequah video manager Leith Haines, who assists with purchasing for the chain.
To maintain that efficiency, Reasor's carefully weighs its options. "We scrutinize everything," Richardville said. "We're trying to get the best product at the best price for our customers."
One such instance, he said, is that "buy-back programs are helping us."
Unlike some supermarkets -- which have forsaken this copy-depth program rather than deal with return shipping logistics -- Reasor's has had "no problems with returns." In part, Richardville said, this is because only 10 video departments are involved, and all are networked for easy communication.
More importantly, however, "it's the quality of the people you have behind the counter," he said. "We're very proud of the caliber of our people. Without Sarah Freeman, my assistant and video merchandiser, for instance, I couldn't do it all."
Indeed, video is championed at all levels. "Without [owner] Jeff Reasor and Allen Mills, I couldn't do it either," said Richardville.
"Reasor's supports the video department from senior management to each and every store employee," said Bryant. "This commitment is evident throughout each department, which is exciting to see."
Consequently, turnover among video managers is low, Richardville said, and replacements are prepared from within the department. Most employees start out with "intensive training" as part-timers in high school, then go full time after graduation. "It's tougher to retain folks who are older," he said.
These staffers -- "very knowledgeable," according to Bryant -- share responsibility for standards of operation. "Reasor's departments are well merchandised, the product diversity and selection are great, and the customer service is outstanding," Bryant said.
To maintain diversity, the chain has been an early adopter of new formats, often supporting them with hardware rentals as needed. "We'll be dropping DVD player rentals as more people get their own," said Haines.
But DVD penetration currently varies within the chain's trade area. "I have four stores that are renting at a good pace," said Richardville, "and others where people don't have players yet."
"This will be the year for DVD," said Mills, pointing out that it was already getting harder for him to find his own rental copies.
While the chain offers N64 and VHS deck rentals, Richardville decided not to support its Playstation 2 game launch with the consoles. The risk of loss, he said, "isn't worth it -- even with a $100 deposit."
Stores stock from five to eight PS2 games at the moment, which he termed adequate until the format has proved itself, since "Dreamcast wasn't as strong as we assumed it would be."
And while dealing with one new system he is already considering future alternatives, mindful that video is of necessity one of the most forward-thinking departments. "We're eager to see what the Game Cube does, and the X-Box looks intriguing," he said.
This foresight adds another reason why, as Richardville said, "the Reasor's name is second to none in this part of the country."
And, overall, "Reasor's is a classic example of how a small to midsized chain can succeed in teaching larger chains how to effectively execute the 'one-stop shopping' concept," said Bryant. "Its rental departments are among the best in the industry."