1 Day or 2 Day for a small store?

[lanna5]

I am contemplating going with a split on New Releases but not sure if I should with such a small store. My population is only 1000 so at most I get 4 or 5 copies of a movie (big hits only) and a couple of the lesser ones and then only one copy of B titles. And my rentals are for only 1 night on NR for $3, and late fees is $2 a day.

I'm thinking of changing this to Hot New Releases within the first few weeks stay the same except have $3 rental $3 late fee, keep for 1 night. But then have anything older than 3 weeks or so, be Recent Hits or something similar and they can keep those for 2 nights and have the $2/day late fee.

Does anyone do anything similar in a smaller store? I only have about 1 copy each of VHS/DVD of most older new releases . . . . I'm having to compete with Movie Gallery that is 20 miles away in the next larger city that has the Walmart, etc. where everyone does their shopping, and they are all 7 day rentals for $3.49 each! I see people from our town there all the time renting, because I check them out once a week or so to see what's on thier shelves and buy some PV titles for my store.

Alanna

[jayluft]

Alanna,
I've had some great success as of late by doing the following:
1) All of our "Hot New Releases" (last 90 day releases) are $3.99 for 2 days.
2) On Wednesday, Thursday and Friday's, all of the current weeks releases (and any other I feel will rent - i.e. lately I never could keep "Ray" on the shelf) I put a small notice on the cover saying that if you return it, the next day (Thursday, Friday and Saturday) I'll give you a $1.00 off coupon.

It's worked great.  We've been doing it now for 6 weeks and I now have people looking to do this weekly.  The best part, is that I get to turnaround the movies within 24 hours and only about 1/3 of the coupons have come back in.

[amanda]

We do a $4.82 for our One Day New Release Titles, and $4.82 for Two Day New Release Rentals. Late charges for the one day are $4.42 and the two day lates are $2.50

We take them down to a 2 day new release after a few months, or when we notice they arent renting. Basically.. whenever we want to. It works great, even tho its the same price, people think they are getting a great deal (which they are )

[rufusjack]

It does not matter the size of your store.  If you had a bigger store you would bring in more copies.  

Video customers dislike 2 things about the video rental experience:  1) paying late fees and 2) returning the movies.  By having your movies only available for 1 day you are maximizing both of those negatives.

Every single time I expanded the length of rentals in my store(s), my revenue went up dramatically.  I now rent titles for 2 days that are less than 2 weeks old and 7 days after that.  My late fees are prorated.

[mex_move]

Rufus is right. We have about 200 mexican DVD's and as soon as we moved them from 2 days to 4 days, they started renting alot more since customers would take 4 at a time (one per night) and now come back in time to rent for the following weekend. Our New Releases can be rented for 1 night on Tue and Wed for only $2.00, so we have those real movie nuts and regulars come and get them then and then don't compete with the weekend crowd, who pay the $4.00 for 2 day price. I am also working on going to $1 credit for early return (next day by noon or 3 pm, not sure yet).

[Hardcopy]

While I don't totally disagree with you I do a little.

If I extended my rental days then all I would do is be without copies during the extra days. Ok, you say, buy more copies. No problem. Then I end up with 10 times the copies with 10 times less the rental fees and suddenly they can't pay for themselves.

Now if my competition did more than 1 day rentals then it would work because there would be enough traffic to drive that pricing schema. In my area everyone wants their movies back by 6pm and we aren't until 10pm. That gives us a perceived and real value to the customers.  

That being said, what we do is simply give them the choice. $2.50 for 1 day and each additional day is $1.25 extra. Late fees are $2.50 a day, but if they rerent it or call us we can add additional days for $1.25 each day.

Works out pretty well because the nearest chain stores are about 20-30 minutes away from us and are much more expensive and not THAT much larger.

Another thing you can do is pull a blockbuster and not make your movies due back till you open. Then just say 2 nights instead of 1 day.

[Anonymous]

lanna5 - You have really answered your own question. You already know that some of your customers are going to the competition because of greater depth, greater breadth and more rental days.

Most stores can easily offer extended rental periods on movies that have been out 2-4 weeks so that is the easiest thing for you to do at no cost or consequence to your store.

Sign up with Rentrak and get all the depth and breadth you need is another option. This may cost some some money if you do not have a Rentrak approved POS system. You can sign up for only the studio output programs that have zero up-front fees so that you will have no risk on the movies you get from them. You will make a profit with the first rental this way and satisfy your heavier renters with a much better selection than you offer now.

[lanna5]

I've also thought about giving them a choice to pay an extra 50 cents for a new release if they want it for an extra day . . bringing the price up to $3.50 for 2 days (which is the same as MG) or they can rent it for $3 for 1 day . . . instead of changing all new releases to 2 days??

You guys have helped with your comments . . . now it's just figuring out which way is going to work best for my store.

Alanna

[sungifts]

On Wednesday, Thursday and Friday's, all of the current weeks releases (and any other I feel will rent - i.e. lately I never could keep "Ray" on the shelf) I put a small notice on the cover saying that if you return it, the next day (Thursday, Friday and Saturday) I'll give you a $1.00 off coupon.

It's worked great.  We've been doing it now for 6 weeks and I now have people looking to do this weekly.  The best part, is that I get to turnaround the movies within 24 hours and only about 1/3 of the coupons have come back in.

jayluft:  Where do you get the $1 off coupons?  I have been looking for some for the same reason.  I could actually configure my POS to give them a credit for early returns, but I like the coupon idea for the exact reason you stated - only about 1/3 will come in.

I have been looking for some that look like dollar bills, but haven't found any as of yet.

[jayluft]

Misty,
I make / print everything myself.
Below is a picture of our cases. The picture has three parts to it:
1) Our standard case with Hot New Release slip sheet. (2 day rental)
2) Case with "Early Return" in it.  We just tuck these in between the outer plastic and cover when we check them out.  These only go on items that I want back the next day so that I can turn them around again.  (Usually only new titles that came out that week - they would also have a Hot New Release label on them)
3) The individual pieces.

[rufusjack]

Richard,

If I had competitors doing 1 day rentals, I would certainly then do 2 day rentals.  Again, every single time over the course of the 13 years in this buinsess, that I have lengthened the number of days a movie is out, my revenue has more than compensated for the additional cost in movies that I needed.  IMO, one day rentals are a thing of the past.  It made sense 10 years ago when you had to pay $65-70 per copy, but not anymore.

Plus,  I have never heard of someone who has gone out of business becuase they gave someone 2 days to rent movies.  I know plenty of 1 day rental stores that are out of business.

It is simple, happier customers spend more money with you.  You then make more money!

[Hardcopy]

I may rent them longer because in theory I agree with you. TO do it with no reason behind it is wasteful of a good marketting strategy.

I opened in my current locaiton a little over a year ago. Since then 4 of the 5 video stores in a 10 mile radius have closed or sold because of me. Everyone is still THRILLED with an extra 4 hours. And I do offer extra days. $3.75 for 2 days. Cheaper than some other STILL. But most choose 1 day.

[rufusjack]

I apologize Richard.

Putting 4 out of 5 video stores out of business in a year or so is awesome.

I have put none out of business in 13 years.

I have been put in my place.

[Hardcopy]

Not trying to put you in your place. Just want everyone to realize that markets are different. Blockbuster around here is a non issue. It is small, and poorly run. It is also too far for my customers.

If they were my competition then what you said would not only have merit it would be the only way to go. Here is a rundown of my "main" competition:
 1. has pink plywood shelves
 2. has their catalog titles in the basement
 3. keeps their kids movies in a box (they fold down the boxes and toss them in)
 4. is generally rude
 5. movies are due back at 6pm
 6. copy depth is a term that they have never heard of

Frankly if they hadn't been forced to sell or close then I would be a little insulted. Once they sold to new owners all their loyal friends left them to come to us and even though NOTHING changed but ownership of the store our business increased 30% instantly.

Markets are a highly individual thing. We can speak generalities here, but it all boils down to knowing your own market.  For me and my customers I can't afford to raise how many days I rent a movie without closing my doors. If I would raise them to 2 day rentals I would need to double my copies, which I would be willing to do, but I have a finite number of customers. I don't have many customers who walk away and don't get their movies.

[rufusjack]

Richard,

You just made my point.  be the best possible store that you can be.  It should not matter whether you compete with a BB or piece of crap video.

You think that you will need more copies but you will not need as many as you think you should need.  I have done this as well as many others.  Learn from us.  I wish I had made the move long ago (from 1 day to 2 days).  I thought the same thing you do know before I made the change.

How do you know you will have to close your doors if rented movies for 2 days vs 1?  Have you ever tried it?  Again, I know of no store that had to close down because they went to 2 day rentals from 1.

How do you know your market size?  Have you ever calculated it?  I posted that excericse on another topic.  That excercise is what the chains do and how they know what the size a market is.

Again, just trying to help.  I have benefited from store owners who have been in business for alot longer than I have been in this business tahnsk to the VSDA.   I am just trying to pass that along.