DALLAS -- While Blockbuster Inc. chairman and CEO Jim Keyes said the transition from DVDs to Blu-ray discs will keep the movie rental business busy for at least five years, the movie rental chain has to find ways to keep its 4,800 stores relevant, said The Dallas Morning News. It is now using a dozen Dallas-area stores to test some new concepts. Among them, said the former 7-Eleven top executive, is offering cappuccino and fountain drinks.
Others include allowing customers to rent movies as early as 6:00 a.m. on their way to work and offering new technology for watching movies, reading [image-nocss] books or shooting video at a Blockbuster, added the report.
Blockbuster customers in Dallas, The Colony, Frisco, Garland, McKinney and Plano are the guinea pigs, as neighborhood stores have been turned into prototypes for gathering research. These stores have been customized with new features that Blockbuster thinks match each demographic.
An old-fashioned soda counter with chrome stools and a black-and-white checkerboard tiled floor might appeal to students in a store across from Southern Methodist University. And a Blockbuster across from a 7-Eleven and a McDonald's on Eldorado Parkway in McKinney has a self-serve coffee and soft drink bar.
"I'm a big believer of the physical relevance of a store. People like to shop, whether it's in a Neiman Marcus or a Blockbuster," Keyes told the newspaper. "But we need to change our stores to become a destination for entertainment."
Arvind Bhatia, an analyst at Sterne Agee & Leach in Dallas, has been through the test stores. Although he found them promising, he said it's too early to tell whether the investments will generate a return. His favorite, he told the paper, was the full-service beverage counter that is cobranded as a Coca-Cola cafe. It may generate an impulse purchase on top of the price of a rental, he said.
Separately from this initiative, Blockbuster has disclosed that it wants to acquire Circuit City. Wall Street panned the idea, said the report. Blockbuster is still trying to fashion a deal, but it will be challenging to pull off, Keyes said.
Keyes is not saying how long the company will study the prototype stores, but he said the company will roll out ideas as they catch on. While some of the prototypes have been retrofitted since February, Blockbuster said it has not done any local marketing or installed signs outside stores.Members help make our journalism possible. Become a CSP member today and unlock exclusive benefits, including unlimited access to all of our content. Sign up here.