CINEMAS & WAL-MART BATTLE COMMON FOE


Circuits need to downsize
I don't want to become too snarky, but feel compelled to  reiterate the point regarding the nature of the Internet and its eminent disruption to the cinema. I have also stated the the large cinema chains will be impacted and that their defensive strategy must include downsizing - both in terms of sites and theatre sizing.

Fortunately for the large cinema circuits, the Internet is also the nemesis of large retailers, to wit, the Regals, Cinemarks, and AMCs  should look to the big retailers for survival cues - and the retailers current battle against what marketing gurus term the "Amazon disease". 

WalMart, Costco, and Target's revenues make up roughly one-fifth of U.S. retail sales, but they are acutely aware that competition is intensifying.  On one flank are the dollar stores, on the other, e-commerce  - where on-site price comparisons from Amazon are killing big-box electronic outlets like Best Buy while negatively impacting the large retailers. To put size into perspective, WalMart operates 3,759 U.S. stores, Target 1,750, and Costco 425. Although operating much smaller stores, nonetheless Family Dollar operates 6,800 locations and Dollar General 9,500.

"Amazon is WalMart's biggest threat, hands-down", Natalie Berg, retail consultant at Planet Retail tells me. "If you look at retail stocks, companies that are viewed as at risk to "Amazon disease" have had their multiplier cut in half".
WalMart fights "Amazon disease" with smaller sites
To combat this, the large retailers have embraced selling more products under their own in-house brand, which stymies consumer efforts to make  web-based price comparisons. Also, private label products carry a higher margin and breed consumer loyalty.  Additionally, WalMart (leading the way) has turned to smaller format stores.  In July, it launched WalMart Express (smaller stores that are easier to site and offer a product mix that is 70% groceries).  Even smaller are the new on-Campus stores which launched last year.  Bill Simon, WalMart CEO commented that, "WalMart plans to open hundreds of the smaller format stores over the next three years".
Amazon price sets by Region
Price matching guarantees are another tactic in the retailers arsenal in fighting the Internet.  "It's all about obscuring price transparency and product exclusivity.  The more you go down that path, the more immune you are to Amazon", says Berg.  Amazon's strategy (and they are not alone) is to change buying habits, not only for hard goods but for entertainment, and movies are on their menu. 

Social networks and wireless services are becoming a big part of marketing and all cinema exhibitors should take note of this.  The Internet tech Kings' intentions  are to poach moviegoers.  The battle will be fought on razor-thin margins so flexibility and timing are key.

The large cinema chains should study how the big retailers are addressing the Internet threat and begin forming a defensive strategy of their own - and downsizing must be a big part of that strategy.

Best and Happy Movie Going!
Jim Lavorato
Cinema Consultant & Advisor
Suka artikel ini ?

About Ayu Shinta

Admin Blog

Join This Site Show Konversi KodeHide Konversi Kode Show EmoticonHide Emoticon

Silakan berkomentar dengan sopan