Stores rework high-def merchandising

Second-generation HD DVD player later this year rumor, says Toshiba

By Jennifer Netherby and Susanne Ault -- Video Business, 7/28/2006

JULY 28 | Now that HD DVD and Blu-ray Disc have been in stores together for a month, retailers from Wal-Mart on down are rejiggering their high-definition video merchandising to better reach tech-conscious consumers.

At the same time, some electronics retailers say Toshiba is planning to introduce a second-generation HD DVD player as early as October, which could give new fuel to HD DVD sales.

Toshiba VP of marketing Jodi Sally called reports of a second-generation player later this year rumor.

“We have not yet announced any new models, and we are continuing to ship significant quantities of both of our HD DVD models to retailers monthly,” she said via e-mail. “To date, we are very pleased with the progress and sales results.”

HD DVD and Blu-ray merchandising remains in flux at retail, as stores move around product and make high-def TV sales a bigger priority.

Wal-Mart has stopped selling HD DVD and Blu-ray movies at some of its stores but added high-def discs to other locations.

Wal-Mart spokeswoman Jolanda Stewart acknowledged that the chain was moving high-def product around based on how it sells in particular areas. “It’s called store of the community concept,” she said. “It’s meeting the needs of the customer.”

Tweeter Electronics has moved its HD DVD and Blu-ray displays to the center of its store, where more people will see it, said Frank Roshinski, Tweeter VP and general merchandising manager for video.

“We’re going through a big store reset right now,” Roshinski said. “We’re moving all of HD DVD and Blu-ray into the center section of the flat-panel TV wall, because that seems to be the first stop for shoppers.”

Roshinski said both formats are continuing to sell, though supplies have been particularly tight with HD DVD. The chain also has used HD DVD and Blu-ray as an occasional selling point for HDTVs as there have been limited HDTV offerings so far.

At Best Buy, executives realize that many people still aren’t aware that in order to see high-def images from their local channels, they need to own a TV capable of displaying high-def broadcasts.

“So then selling them on the need to [upgrade] their DVD format is asking a lot of people,” said Best Buy spokesman Brian Lucas. “Things are really limited to the audio- and videophiles at this point.”

The NPD Group estimates that HDTV set penetration is at about 18% of U.S. households. NPD president of music and movies Russ Crupnick noted that retailers believe the latter part of this year is a critical time for HDTV.

“It’s moving from early adopter to mass” acceptance, he explained. “And it’s coming up to the holidays, and you can get a great 50-inch high-def set for $1,200 and $1,300. It’s still about the TVs. Maybe a year from now, as the player prices drop, [consumers] will start to want the best possible fuel for their high-def sets.”

Also affecting HD DVD or Blu-ray purchasing is that some retailers, such as Best Buy, are working hard to sell the products objectively. At the risk of turning customers off with a tricky choice, Best Buy employees are instructed to lay out the differences between the two formats.