07 Aug NPD: Putting the Focus Back on Retail Go-to-Market Strategy
Who would have guessed that physical entertainment would make such a comeback? At the end of 2016, retail sales of physical books increased by 3 percent, while records on vinyl continued to prosper with double-digit growth and over 13 million units sold in 2016. The same can be said for movies on disc, with the launch of Blu-ray/4K formats injecting new life into the movie retail category. This is particularly true for family and animated movies; franchise movies like Marvel, DC, and Star Wars; and various other box office blockbusters that continue to drive retail sales.
That said, today’s consumer is different from the heyday of DVD in the early 2000s – and even five years ago – as they have so many more choices to meet their entertainment needs. Discs remain an important market basket category as baskets with a physical disc in them ring up 45 percent higher than those without a disc. As a movie’s box-office take is a critical factor in determining home entertainment sales, marketing and messaging still play an important role in helping the consumer find a particular title.
Nearly two-thirds of people say they go out to a retailer specifically to buy a newly released movie on disc; this number increases for top-grossing films where things like collectability, interest in a particular franchise and having seen a movie in a theater are paramount purchase drivers.
Lower grossing titles are more often purchased on impulse; in impulse buys, seeing a trailer and being a fan of an actor in the film tend to be more important purchase motivators. Thus, advertising and marketing spend is even more critical for lower grossing films to drive awareness at retail.
As consumer shopping behavior leans more toward experiential shopping, opportunity is created for the category to shift its focus from purchase to spend. Distributors should look for cross-promotional partners to drive an in-home movie experience consistent with the overall franchise/fan experience — including consumer products, promotions with snack food partners or in-home meal companies (delivery or meal kit) and additional placement near new tech (4K TVs), etc.
Graham Gee is President, Video Entertainment for The NPD Group.
For more information, please visit www.npd.com.