BLACK MOUNTAIN, N.C. -- Ingles Markets here is rolling out the the shared-revenue pay-per-transaction system of Rentrak Corp., Portland, Ore., to all 86 of its video-rental departments.
Ingles is beginning with October titles "Life" (which streeted Oct. 19) and "Never Been Kissed" (Oct. 26) in 31 stores, said Tony Federico, vice president for nonfood.
The program will extend to 37 stores in November, and then roll out to an additional 16 stores a month until it is chainwide, he said. Acquiring product through Rentrak, Ingles will triple its buys of key titles to about 30 units per store.
"The most important thing about Rentrak to Ingles is making sure that we have the copy depth on the right titles in order to supply demand," said Federico. "We want to make sure that people know that they can get the product that they need by going over to the Ingles video department."
With its previous copy depth of nine or 10 pieces, the retailer was losing customers to the video specialty chains because "the chances of getting that new release were slim and none. We are going to have to retrain them to think, 'Hey, I'm in Ingles. I want this movie. I know if I walk over there, I can get it and go on home and be happy.' That's the whole intent," said Federico.
Among other supermarket retailers, C&K Markets, Brookings, Ore., began testing Rentrak last summer. Industry observers said Rentrak now supplies more than 1,200 supermarkets. Besides Ingles and C&K, the roster is known to include Harps Food Stores, Springdale, Ark.; the Safeway division in Bellevue, Wash.; Randall's Food Markets, Houston; King Soopers, Denver; Dick's Supermarket, Platteville, Wis.; Bauersfeld's, Topeka, Kan.; and many independents.
Most of Ingles video-rental departments are relatively new, with attractive decor. Because of the retailer's dedicated video staff and focus on new releases, Ingles is well-positioned to take full advantage of a program like Rentrak's, said industry observers. In most stores, the retailer has the space for the copy depth, and is likely to promote it sufficiently to have an effect, they said. Ingles is rolling out the program without a test.
"They are going to take our lead titles and we are going to aggressively market the titles at all levels," said Andy Miller, national sales manager of Rentrak's Supermarket division. "There is going to be a real partnership here. Ingles understands what Rentrak is all about and they are going to use it the way it was intended to be used."
Some retailers have made the mistake of using revenue-sharing programs only to lower costs on the quantities they already were bringing in, noted the industry observers. To be effective, revenue-sharing programs need to combine increased copy depth and heavy marketing, they said.
"We made the decision that if we were going to stay in the video business, we had to get into a copy-depth program," said Federico. "There's no question, that is why we are going with revenue-sharing. The whole key is supplying the demand of customers and making sure you have the product that they need."
But another key to implementing the Rentrak program, which depends on computerized tracking of transactions, was Ingles replacing its old video point-of-sale system with one from Bonafide Management Systems, Woodland Hills, Calif., that is Y2K-compliant, noted Federico.