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Blockbuster Revamps Stores, Tests CE Sections

Blockbuster has reconfigured 4,412 company-owned stores to better accentuate its growing video game and DVD businesses, and is testing dedicated CE sections in approximately nine locations in Tulsa, Okla.

The redesign employs boutique-style sections and color-blocked signage to distinguish between retail and rental areas, and various product categories. Under the color scheme, red designates retail areas, blue indicates rentals, orange represents games and green delineates the consumer electronics section within the Tulsa test stores.

About 1,000 stores have also added a Spanish-language section, demarcated by purple signage.

“We created this new layout and new look to make [our customers’] in-store experience more convenient, more enjoyable and to give them no reason to buy or shop anywhere else,” said Nick Shepherd, executive VP/merchandising and chief concept officer.

“Our mission is clear,” he added. “To be the complete source to our customers for movies and games, in the format of their choice, rental or retail, new or used.”

A company spokesperson said it was “premature” to comment on whether the prototype CE sections would be rolled out to other Blockbuster stores. The chain announced its intention to vigorously pursue the CE category one year ago after ending an in-store shop pilot program with RadioShack (see TWICE, Jan. 21, 2001 p. 14).

CE products highlighted this past holiday season included:

  • Magnavox DVD players and VCRs for $60,
  • Akai DVD players for $70,
  • Philips five-disc DVD changers for $160 and DVD/VCR combo units for $200,
  • Philips HTiB — plus 13 free rentals over three months — for $300.
  • Blockbuster also offered five free games rentals over five weeks with the purchase of a GameCube, PlayStation2 or Xbox game console.

To help beef up its presence in the gaming category, the company launched a series of merchandising initiatives last summer. Measures included expanding existing game sections in more than 4,300 company-operated stores, and creating platform-specific sections for rental, retail and previously played titles, along with dedicated accessories and publications.

“We see this initiative as an ongoing process,” Shepherd said.

Blockbuster’s stepped-up CE role was prompted by its success at selling DirecTV, and by a six-month text of in-store RadioShack shops in 2000. The concept was ultimately dropped because the kiosks weren’t generating enough revenue to cover their high fixed costs.

But Blockbuster saw potential in CE as a key adjunct to help offset encroachments by video-on-demand services on its core video rental business.