As a way to drive more multi-channel sales, Blockbuster Inc. is piloting a rent-online/return-to-store program.
Today Blockbuster’s online subscribers must use prepaid envelopes to return movies to the chain retailer. But Blockbuster, No. 70 in the Internet Retailer Top 500 Guide to Retail Web Sites, is piloting a program in Colorado Springs, CO, whereby online subscribers have the option of returning their latest online rental to a near-by store.
Once they are in the store Blockbuster is then offering each customer a free movie rental. “Under the test, subscribers can return a movie they rented through the online system to a Blockbuster store in its sealed return envelope,” says a Blockbuster spokesman. “The customer might then receive a free in-store rental, subject to normal in-store rental rules.”
A return-to-store program is Blockbuster’s latest effort to drive store traffic – and sales. In March, Blockbuster doubled the number of free movie rentals redeemable at bricks-and-mortar stores that Blockbuster Online subscribers receive.
Subscribers received one free in-store movie rental every week instead of the two per month previously offered. The two-per-month free rentals could be redeemed at the same time; the one-per-week free rentals could only be redeemed one at a time. Subscribers had the option to stay with the two free rentals program or migrate to the four. The free in-store rentals did not affect the number of online rentals a customer could have out at the same time.
The new incentives are designed to help Blockbuster improve its sagging overall sales. Total Q2 revenue dropped 5% to $1.32 billion from $1.39 billion a year earlier, primarily due to reduced revenue from the closure of stores and lower margin retail sales. But revenue from online movie rentals totaled $57.6 million for the quarter ended June 30, up 64% from $35.2 million a year earlier.
Blockbuster likes the results of its rent-online/return-to-store pilot test, but is still deciding on any further expansion. “The online rental test continues and we like what we're seeing,” the spokesman says. “However, we have not made any announcement about a national roll-out.”
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