Chain Reaction Small Video Stores Find Ways to Compete with National Retailers

The Florida Times Union, August 2, 1999 | Go to article overview

Chain Reaction Small Video Stores Find Ways to Compete with National Retailers


Five years ago, Vermont video store owner David Zullo was ready to hit the eject button and bail out of the business because of chain retailers and other competition for viewers' attention.

But a funny thing happened on the way to the liquidation sale. Video rentals went up at his store, despite a sea of blue-and-yellow Blockbuster signs dotting the horizon.

With some aggressive marketing, a bit of diversification on movie titles and renewed investment in time and money, 1998 was the best year Zullo has had in the 15 years he's operated his Showcase Video stores around Shelburne, Vt.

Battling the big boys is not a fight everyone wins. As many as 2,500 U.S. video stores went out of business in 1998, according to the Video Software Dealers Association, roughly 10 percent of the total rental stores.

With the growth of national chains, which added about 1,000 stores last year, that trend is likely to continue and even accelerate, some industry analysts say.

King Video on Old Kings Road is one of only a handful of locally owned video stores left in Jacksonville.

"A lot of them have been going down lately," said Cliff Collins, the store's owner. "The only way I do it is service. I reserve people movies two weeks in advance."

Nationwide chains are "hard to beat," he said.

But after 12 years in the business, Collins is not sure how much longer he can compete.

"Unless you are extremely clever and resourceful and really understand retailing, it's going to be hard to be part of this industry's future," said Bruce Apar, editor-in-chief of Video Business, a trade publication. "The industry's matured to the point where it's not very forgiving anymore of people who opened stores because they like movies."

The shakeout resembles what happened to independent book and record stores that were run out of business by national retailers. Handfuls of locally owned shops survived and even thrived as smaller niche stores, and industry experts see the same happening for video retailers.

World of Videos on Atlantic Boulevard has created its niche by offering a selection of Filipino movies, said its owner, Angie Wahidi. The store also tries to draw more customers by selling phone cards.

"We're trying [to compete] by diversifying," Wahidi said.

Because the store is a family business, she said, the overhead is low and that allows World of Videos to keep prices down.

But, she added, it is hard to compete with the national chains.

"A lot of the mom and pops are closing down," she said.

Phones at two Jacksonville video rental outlets listed in the most recent BellSouth Yellow Pages were disconnected, and the operator had no new listings for the stores.

Officials at Mega Video, a homegrown video store chain, did not return phone calls for this story.

Mark Vrieling, who owns three Rain City Video outlets around Seattle and is chairman of the video dealers association, said his store looks "more like a coffee shop than it does a Blockbuster."

"We bring in a different crowd," he said. "We've still got the new release junkies, but we're catering to the real film buffs."

Based on customers' rental patterns, one of Vrieling's stores is heavy on foreign films while another has a bigger family-oriented section. The idea is to play to the interests of the neighborhood, something a generic chain store cannot do, he said.

Smaller retailers count on anti-corporate customers, film buffs such as Jackie Sanchez of Montclair, N.J., who prefers the personal touch. She rents movies from her neighborhood store, Video Showcase.

"I feel strongly I have to be loyal to my local video store," she said. "You go in and they know your name, and if they didn't have what you wanted, they'd try and get it for you. …

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