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PICS Previews is a hit in mass merchandisers' entertainment departments, and now it's headed for supermarket aisles.

The interactive in-store advertising system is currently in the music, video and electronics departments of more than 1,800 mass merchandisers. Next on the agenda are supermarkets, and after that, travel and automotive channels, among others.

"We are going to take our proven formula and expand it into a number of other industries," said Michael Stern, exec VP at San Francisco-based PICS Previews. "Supermarkets are one environment in which we plan to expand in 1996, and we are also looking at applications in other industries."

The PICS Previews system has been gradually expanding in entertainment departments of retailers like Wal-Mart Stores and Kmart Corp. since 1992. It consists of a 6-foot-high interactive kiosk with a 25-inch color TV monitor and giant backlit touchpad. The kiosk is designed as an end-cap that fits at the end of an aisle in a mass merchandiser's store.

The kiosk features music, movie videos and videogames as well as customized sponsorship messages from advertisers. On the touchpad, consumers see icons of music CDs, movies or games from which they may sample full-motion video and sound clips. Each kiosk is also sponsored by up to four major advertisers touting everything from cookies to credit cards.

Attracting big-name advertisers

So far, the in-store medium has attracted major advertisers including Nabisco Foods Group for its Chips Ahoy! brand, Sony Corp., Visa USA and Nestle USA. The average cost for kiosk sponsorship is $30 to $50 per store, for an eight-week cycle for the sponsor's 30-second spot.

The system has been proved to generate sales increases in the range of 19% to 47% at the stores that feature the kiosks, according to New York-based Audits & Surveys, an independent marketing researcher specializing in in-store research.

"Our objective is to deliver a message to consumers at the point of purchase that generates increased sales," Mr. Stern said.

Also, according to PICS Previews, the average machine is used more than 500 times a day.

To make the move into supermarkets next year, PICS Previews is working on modifying the current system.

Adding coupons to system

"Couponing is a much more important element in supermarkets than it is in mass merchandisers," Mr. Stern said. "Therefore, we are building that aspect into the new program."

Currently, the company is testing the supermarket system in Safeway stores.

PICS Previews feels that expansion beyond the entertainment departments of mass merchandising retailers to others like automotive and home and garden would benefit the company.

"Mass merchants are an ideal medium for us and continue to gobble up an increasing share of the retail pie," Mr. Stern said. "They have a wonderful environment for us because our system has the ability to pull consumers in to increase sales of entertainment and other products.'

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