The multiples must target their CD and DVD offers much more effectively at younger consumers. Rod Addy reports
Consequently, the supermarkets must create a better instore atmosphere to overcome the key disadvantages they have in comparison with high street players, says Gladding.
But are supermarkets able to compete, given their limited sales space? Gladding believes they are.
Facilities such as listening posts are part of the package specialist stores thrive on. “Some supermarkets are already experimenting with dedicated music areas and more could be done to develop listening posts,” he says.
Although grocery multiples have reported healthy music and video/DVD sales this festive season, they are still not viewed as a destination shop, especially by younger consumers, according to market analyst Verdict.
Nick Gladding, senior analyst at Verdict, says: “Fifteen to 24-year-olds, who are the heaviest buyers of CDs and DVDs, prefer visiting the specialists. For young people, a specialist store is a centre of entertainment.”
The biggest supermarkets think so too. Tesco, Sainsbury and Asda have introduced listening facilities in their largest stores. However, Marc Matthews, Somerfield category buyer for home entertainments, says: “We’re looking at listening posts in top stores, but you have to drive penetration before you can think about other innovations.”
Enlivening the instore atmosphere is not the only change that would boost the supermarkets’ sales. Increasing the services they offer would help too, says Gladding. He says the development front line is digital downloading. HMV and Woolworths recently launched such services, followed by Tesco, which entered with a rival to the existing iTunes service. It claims its downloading service is compatible with more than 70 different portable music players, whereas iTunes users are restricted to a single device.
Sainsbury plans to assess downloading this year but, for the moment, is turning its attention to other services. It has just launched a DVD rental service on its www.sainsbury.co.uk site in partnership with existing online rental business lovefilm.com.
Somerfield has already identified the potential of such a service and offers a video and DVD rental scheme through Viewpoint.
As well as giving shoppers more access to products, supermarkets could offer more advice on purchases, says Gladding: “Grocers could develop a dedicated customer service desk close to the music, DVD and video department.”
Asda recently took the lead here, launching a customer service area for the Asda Living store format, introduced in October. It may roll it out to other Asda Living stores and Asda supercentres.
As well as extending services, the multiples continue to boost their CD and DVD back catalogue to compete. Gladding says: “Most of the revenue comes from the top 100, but HMV, for example, has increased its sales of the top 100-200. In response, grocers are broadening their sales to include more than the top titles.”
Christopher Rose, Sainsbury games and music buyer, says: “We aim to appeal by delivering a competitive chart offer and strong back catalogue promotions.”
Somerfield has launched a broader budget range of DVDs in Somerfield and Kwik Save stores, which will be changed each month.
Verdict believes price will be a major factor in pushing multiples’ share of the market from 22.1% in 2004 to 27% in 2009. In comparison, the specialists’ market share is predicted to decline over the same period, from 39.8% to 38%. But the need to widen services must remain the multiples’ main objective.
Consequently, the supermarkets must create a better instore atmosphere to overcome the key disadvantages they have in comparison with high street players, says Gladding.
But are supermarkets able to compete, given their limited sales space? Gladding believes they are.
Facilities such as listening posts are part of the package specialist stores thrive on. “Some supermarkets are already experimenting with dedicated music areas and more could be done to develop listening posts,” he says.
Although grocery multiples have reported healthy music and video/DVD sales this festive season, they are still not viewed as a destination shop, especially by younger consumers, according to market analyst Verdict.
Nick Gladding, senior analyst at Verdict, says: “Fifteen to 24-year-olds, who are the heaviest buyers of CDs and DVDs, prefer visiting the specialists. For young people, a specialist store is a centre of entertainment.”
The biggest supermarkets think so too. Tesco, Sainsbury and Asda have introduced listening facilities in their largest stores. However, Marc Matthews, Somerfield category buyer for home entertainments, says: “We’re looking at listening posts in top stores, but you have to drive penetration before you can think about other innovations.”
Enlivening the instore atmosphere is not the only change that would boost the supermarkets’ sales. Increasing the services they offer would help too, says Gladding. He says the development front line is digital downloading. HMV and Woolworths recently launched such services, followed by Tesco, which entered with a rival to the existing iTunes service. It claims its downloading service is compatible with more than 70 different portable music players, whereas iTunes users are restricted to a single device.
Sainsbury plans to assess downloading this year but, for the moment, is turning its attention to other services. It has just launched a DVD rental service on its www.sainsbury.co.uk site in partnership with existing online rental business lovefilm.com.
Somerfield has already identified the potential of such a service and offers a video and DVD rental scheme through Viewpoint.
As well as giving shoppers more access to products, supermarkets could offer more advice on purchases, says Gladding: “Grocers could develop a dedicated customer service desk close to the music, DVD and video department.”
Asda recently took the lead here, launching a customer service area for the Asda Living store format, introduced in October. It may roll it out to other Asda Living stores and Asda supercentres.
As well as extending services, the multiples continue to boost their CD and DVD back catalogue to compete. Gladding says: “Most of the revenue comes from the top 100, but HMV, for example, has increased its sales of the top 100-200. In response, grocers are broadening their sales to include more than the top titles.”
Christopher Rose, Sainsbury games and music buyer, says: “We aim to appeal by delivering a competitive chart offer and strong back catalogue promotions.”
Somerfield has launched a broader budget range of DVDs in Somerfield and Kwik Save stores, which will be changed each month.
Verdict believes price will be a major factor in pushing multiples’ share of the market from 22.1% in 2004 to 27% in 2009. In comparison, the specialists’ market share is predicted to decline over the same period, from 39.8% to 38%. But the need to widen services must remain the multiples’ main objective.
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