VIDEO STRUGGLES TO FIND A PLACE IN GROCERY

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Now that two high-profile ventures have failed, what's in store for in-store media?

Last year's collapse of highly publicized video and TV-based media has left some in-store players worried about the future of such products.

Like any new product or service, video-based in-store media must "prove cost-effective," says Dick Blatt, executive director of Point-of-Purchase Advertising Institute. "The cost-effectiveness of these particular services had an uphill battle to begin with, but that is not to say that video-based products don't have a future."

In February 1993, Turner Private Networks' Checkout Channel checked out of the in-store marketing arena. The Checkout Channel operated in about 840 supermarkets in 17 markets across the U.S.

Last December, VideOcart Inc.'s VideOcart, a shopping-cart mounted video display unit, filed for protection under federal bankruptcy laws. VideOcart operated in about 220 stores.

"The Checkout Channel sold advertising space, but it was not a cost efficient way for Turner to invest their capital," says Marc Kalan, director of marketing and sales services for New York-based Valassis In-Store Marketing. He's also the co-chairman of POPAI's Association of In-store Marketing.

Virginia Cargill, senior VP-marketing operations for ActMedia and co-chairman of the association, says Checkout Channel was an interesting idea but ran counter to a trend by supermarkets to move customers more quickly through lines.

"Checkout lines became more efficient and there was no real consumer interest in watching TV," she says.

Both Mr. Kalan and Ms. Cargill agree VideOcart cost too much to operate. Its average cost was about $100,000 to $150,000 to install per store.

"The people who support our products are getting more sophisticated in analyzing and measuring the impact of our media," says Mr. Kalan. "Everyone in American business is talking about cost efficiency. It's not always the most exciting, sexy electronic idea that's the best."

Some sources believe the death of these two products indicates the demise of video and TV-based in-store media in general, but others are more optimistic.

NBC On-Site, currently testing in about 60 stores, might be the next video-based in-store venture to watch. Unlike the Turner channel, it's not found at the checkout but throughout the store. And, more importantly, it doesn't have sound, which shoppers consider intrusive. NBC On-Site has the potential to be successful, says Alan Gottesman, an analyst for PaineWebber.

"Eventually a video-based in-store media product will work, but it must be low cost" to be successful, he says.

Mr. Gottesman notes that it's too early to deem NBC On-Site a success because it's still in test and not yet in use nationwide.

Kiosks are another video-based medium that have had a short lifespan in supermarkets.

"Consumers aren't ready to spend much time fiddling around with this medium," says Bill Longley, president of Health Monitor, White Plains, N.Y.

Mr. Gottesman agrees. He says he "has not seen a single supermarket kiosk that has ever worked. The device did not seem to attract consumers in store."

Although electronic couponing is hot now, Mr. Gottesman still doesn't believe coupon kiosks will be a success.

Mr. Gottesman thinks kiosks aren't for supermarkets, but for places like music stores, "where people are more highly involved."

But as Mr. Blatt puts it, timing is everything. Other applications for video-based in-store media will emerge.

"With the pioneers, some make it and some do not," he says. "That does not mean there is not a future for others."

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