Blockbuster Will Add Video Items, Sans RadioShack
By Bob Gerson -- TWICE, 1/10/2002
DALLAS - Based on the success of a year-long test run of RadioShack consumer electronics kiosks in some of its stores, Blockbuster is adding video products to all of its 5,000-plus outlets throughout the United States - and is doing it on its own, without the aid of RadioShack.
"Through our work in consumer electronics and specifically our trial program with RadioShack, we were able to gain valuable insights in a very cost-effective manner that will enable us to establish a profitable program selling select consumer electronics that complement our core business," said Blockbuster chairman John Antioco. The program should be in place in stores before the end of this year, he stated.
In addition to its 130-store trial of RadioShack kiosks, Blockbuster has been offering some products on its own, including DirecTV systems. Antioco said its tests showed that the RadioShack offerings included a broader range of products than Blockbuster customers wanted, and that the new program will "offer an assortment of products that are much more closely aligned with our core business and include more name brands than the normal RadioShack assortment. And, he added, "Blockbuster can leverage third-party supply-chain arrangements to maximize margins and minimize investment in inventory."
Antioco said that in the four RadioShack test markets (Austin, Texas; Las Vegas; Tulsa, Okla.; and Norfolk, Va.), the most popular selling products included DVD and VHS players, mobile phones, surround-sound systems and accessories like cables and connectors. In addition, he said, within a year Blockbuster became the second biggest retailer of DirecTV.
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