BENTONVILLE, Ark. — Wal-Mart Stores here will roll out Coinstar coin-counting machines and redbox DVD rental kiosks to nearly all its U.S. stores within the next 12 to 18 months, the suppliers said this month.
The redbox units are currently installed in over 800 Wal-Mart stores, and Coinstar coin-counting machines — known as Coinstar Centers — are installed in over 400 Wal-Mart stores. Wal-Mart will add 2,700 redbox kiosks and 2,000 Coinstar Centers, Marci Maule, a spokeswoman for Coinstar, Bellevue, Wash., told SN. Other devices at the front of the stores, such as games and rides, will be relocated or removed.
“Wal-Mart always will look for products and services that bring convenience and savings to our customers, and redbox has been well received in stores where it is available today,” spokeswoman Melissa O'Brien told SN.
“Self-service kiosks, including Coinstar Centers and DVD rental kiosks, are among the highest-profit-per-square-foot areas in the store. In addition, consumers are increasingly looking for ease and convenience and are embracing self-service devices,” Maule said.
Redbox Automated Retail, Oakbrook Terrace, Ill., is owned by Coinstar, McDonald's Ventures, which is a wholly owned subsidiary of McDonald's Corp., Oakbrook, Ill., and private investors. Coinstar markets the kiosks to supermarkets and other retailers.
“This is just another indication of the strength of the redbox proposition,” said Gary Lancina, vice president of marketing for the DVD kiosk company.
Redbox now has a total of 6,800 locations, with 1,900 in McDonald's, he said. Most of the remaining 4,900 are in supermarkets or Wal-Marts. “We are optimistic about future growth,” Lancina said, but he would not reveal specific plans aside from the Wal-Mart expansion.
Supermarket chains “continue to see DVD rental as an added value for their customers,” he said.
“Whenever Wal-Mart gets behind something in a major way, it helps legitimize the effort,” commented Neil Stern, partner, McMillan Doolittle, Chicago, a retail consultant. With the Wal-Mart expansion, redbox will have more locations than Blockbuster, Dallas, by the end of this year, he said.
“It certainly has been a concept that customers understand very well and is gaining mass acceptance,” he said.
Meanwhile, the Coinstar program is “a relatively simple idea, but a good one. It works for the consumers, it works for the retailers. The consumers are turning their coins into something they are going to spend in the stores, and Coinstar can make a cut on it,” Stern said.
These machines are a means of “monetizing store traffic,” or “making money on the traffic that is already coming through the store,” he said.
Also, the redbox kiosks help create the return trip inherent in video rental. “Customers come once to get the DVD and they come again to bring it back. That's why video rental was attractive initially [to supermarkets], way back when people were putting it in store shops, but that's why it can also be attractive again with these machines, which are much simpler to operate,” Stern said.