Blockbuster tests ideas at prototype stores in Dallas
(Dallas Morning News, The (KRT) Via Acquire Media NewsEdge) Apr. 24--If you've noticed that your Blockbuster has blossomed into more than a movie rental store, it's because you are part of an experiment intended to propel a chain facing obsolescence into the future.
While Dallas-based Blockbuster Inc. chief executive Jim Keyes says the transition from DVDs to Blu-ray discs will keep the rental business busy for at least five years, the No. 1 U.S. renter of movies has to find ways to keep its 4,800 stores relevant.
Blockbuster is using a dozen Dallas-area stores to test concepts such as:
-- Whether customers want to rent movies as early as 6 a.m. on their way to work, instead of after work.
-- Including the option to buy a cappuccino or a fountain drink.
-- Offering new technology for watching movies, reading books or shooting video at a Blockbuster.
-- Whether customers would stop in more often if they or their children were entertained with a game of Rock Band on a 62-inch screen or they had access to free Wi-Fi.
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.
A store with a hands-on video gaming center that's a magnet for kids and teens is sharing a parking lot with the library in The Colony.
A kids store with a dedicated play area and toys, books and T-shirts ready to pick up on the way to a birthday party is strategically located in a Plano strip center with a Pilates studio and a children's resale shop.
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," Mr. Keyes said. "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 was the full-service beverage counter that is co-branded as a Coca-Cola cafe. It may generate an impulse purchase on top of the price of a rental.
Mr. Bhatia also thought the gaming store was a natural, but perhaps not the technology store. "I'm not sure someone will buy a $2,000 TV at Blockbuster."
Blockbuster isn't going it alone with the new bells and whistles.
Sony Corp. is paying for an expensive fixture that displays its PlayStation 3 console, not for its gaming capabilities but for playing movies in its superior high-definition Blu-ray format.
The display units cost at least $5,000 each and are being installed in all 4,800 U.S. Blockbuster stores. Blockbuster surrounds the units with a small but growing library of movies available on Blu-ray.
Last summer, Blockbuster was the first retailer to choose Sony's Blu-ray over the competing HD-DVD format backed by Toshiba and Microsoft.
Later, Wal-Mart and Netflix followed Blockbuster, and Blu-ray is expected to eventually replace DVDs the way DVDs replaced VHS tapes.
According to published reports this week, Sony is preparing to launch an online video service through its PlayStation network as early as this summer.
And Blockbuster.com will soon offer downloads, following its acquisition of Movielink last year.
Movies will be distributed multiple ways, Mr. Keyes said.
"Think of all the investment that Sony's put into a Blu-ray product line," he said. "It's based on an assumption that discs will be around for a while. That's not just us thinking this; it's the industry that believes consumers will still prefer all forms of access."
Stores are just one piece, but they're worth the attention, Mr. Keyes said.
Last week, Blockbuster disclosed that it wants to acquire Circuit City.
Wall Street panned the idea. Blockbuster is still trying to fashion a deal, but Mr. Keyes said, it will be challenging to pull off.
The Dallas prototype experiment is separate from efforts to merge with Circuit City, he said.
Mr. Keyes isn't saying how long the prototype stores will be studied, but he said that the company will roll out ideas as they catch on.
While some of the prototypes have been retrofitted since February, Blockbuster said it hasn't done any local marketing or installed signs outside stores.
Blockbuster hired specialists from Irving-based Mosaic Sales Solutions to staff its prototype technology store at Lemmon and McKinney avenues.
On Monday, the store sold its first big-screen HDTV, a 40-inch Sony Bravia for $1,597.99.
"It was so exciting," store manager Lauren Garrett said.
BLOCKBUSTER TEST STORES
Here's where you can see Blockbuster's prototype stores:
The basic better Blockbuster
These stores still have the new release wall, but new paint, signs and lower shelves make the store feel more open.
-- 7050 N. Shiloh Road, Garland
-- 1031 Northwest Highway, Garland
-- 635 Preston Royal Center, Dallas
-- 5302 Greenville Ave., Dallas
These stores have the basic better Blockbuster features plus:
Video game play: 6804 Main St., The Colony
Kids' play area: 7200 Independence Parkway, Plano
Tech for sale: 3501 McKinney Ave., Uptown Dallas
Combo minis of all three: 5960 W. Parker Road, Plano
Tech Lounge: 14891 Preston Road, Dallas
Beverage bar, longer hours
These stores sell hot and cold beverages and snacks, and open at 6 a.m.
Self-service: 5649 Lebanon Road, Frisco
Full-service counter and seating: 6437 Hillcrest Ave., Dallas
Self-service with seating: 3201 Eldorado Parkway, McKinney
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