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BAMBERG, S.C. -- Convenience stores face increased competition not just from other c-store operators, but also drug, dollar and grocery stores. This battle for consumers has pushed c-store chains to mix up their offerings and for E-Z Shop, the retail arm of Brabham Oil Co., that has meant adding movie rental kiosks.
"We liked what Redbox and Blockbuster had to say, but we would only have received a modest percentage of the movie rental revenue and they wanted to place their kiosks outside our stores," said Joe James, director of operations for E-Z Shop, a 28-unit convenience store/gas station operator in South Carolina.
Instead, the chain opted to buy a kiosk outright from DVDNow Kiosks. This move has allowed E-Z Shop to keep all of the movie rental and other revenue in-house. Movies are prices at $1.25 for the first night and $1.99 for each additional night. The total employee time required to maintain movie inventory, monitor rentals and revenue, and oversee Internet operations using custom-designed software provided by DVDNow is less than three hours a week.
"In a year and nearly three months, the machine paid for itself, and that's when we ordered four more," James said, adding that if the calculation had included revenue from incremental sales, new and repeat customer visits, and marketing tie-ins, E-Z Shop recovered its investment even sooner.
E-Z Shop installed that first DVDNow kiosk in its Bamberg, S.C. c-store, placing the machine in the window and pairing it with popcorn, candy and chips, James explained, noting that the company has "seen a spike in inside sales over last year in our store with the kiosk."
E-Z Shop uses signs outside on the forecourt to advertise new releases and it places movie pictures in the stores' windows. "Young people will stop their car, get out and stare at the poster in the window for a few seconds, and more often than not, they'll come inside and rent a movie," James said.
Inside the store, customers can see the movies displayed in their original packaging through the front glass panel of the kiosk, while a 32-inch flat-panel screen plays movie trailers. The display can also be used for advertising. Panels on the side of the machine advertise movie specials like 99-cent movies on Tuesdays and other store promotions.
"The kiosks make people slow down and even if they hadn't come in to rent a movie, they often leave with one. When they come back to return the movie, they don't just drop it off and walk out of the store. We're getting incremental sales, especially when they have children with them," James said.
E-Z Shop also offers a membership movie club, provided through DVDNow. Members get access to special promos and reward points toward free movie rentals for each movie they rent.
"The beauty of our self-serve kiosks is that customers can rent and return movies without requiring any assistance from store personnel," said Scott McInnes, founder and CEO of DVDNow Kiosks. "And our DVD kiosks are designed to maximize cross-promotions and additional revenue streams above and beyond movie rentals -- opportunities for potential earnings that Redbox leaves on the table."
Privately held DVDNow Kiosks recently expanded into Mexico, Costa Rica, the Dominican Republic, as well as supplying Best Buy Canada with DVD kiosks that are being placed in 7-Eleven's Canadian stores. It sells kiosks as a turnkey operation to any size c-store chain and single-store owners.