ROCHESTER, N.Y. — Weg-mans Food Markets here will close all its remaining video rental departments and replace them with DVD rental kiosks by October.
Late last month, the retailer reported it is installing units from automated DVD rental-service provider Redbox Automated Retail, Oak Brook Terrace, Ill., a joint venture of Coinstar, Bellevue, Wash., and McDonald's, Oak Brook, Ill.
“Our installations will happen as they shut down their existing video rental departments and transition to a redbox solution,” said Greg Waring, vice president, marketing, redbox.
The kiosks are already in 18 Wegmans locations that did not previously have a video section, and the DVD rental company plans to have its machines in the 40 stores with video departments “over the next few months,” Waring said. “We were testing in a handful of Wegmans for over a year now and, in the last month or so, Wegmans made the decision to expand that test into a larger rollout.”
According to an internal Wegmans communication obtained by SN, the pilot kiosks generated positive customer feedback and exceeded sales expectations.
“While the individual agreements are specific to each retail store, the majority of redbox's grocery partners work on a revenue sharing basis,” Waring said.
Wegmans spokeswoman Jo Natale declined to speak with SN about the change, although she told a local television station, “we've received only positive feedback” on the test locations.
The retailer will continue to carry sell-through DVDs in its stores, according to the document.
A call to a Wegmans store that has yet to go through the transition found that once the rental department is closed, sell-through DVDs will most likely be merchandised with books and general merchandise in what one employee referred to as a “media center.”
A second store said DVDs would be sold from the area occupied by the old video rental department, along with other items.
Use of video department space will vary by store, but in most, it will be a merchandising area, the communication said. Event ticket-buying terminals called “That's the Ticket,” usually located in the video rental department, will move to the customer-service desk, it said.
The DVD rental kiosks are likely to be placed in high-traffic areas of the stores, Waring said.
There are about 2,700 total redbox installations, with about 1,000 in McDonald's, and the remainder in supermarket chains including Albertsons LLC, Hannaford, Giant Eagle, Smith's and Ahold USA, the company has reported.