retail news in context, analysis with attitude

by Kevin Coupe

It has been well chronicled here on MNB how Blockbuster, once a ubiquitous presence in communities throughout America as the primary source for renting videos, fell into irrelevance, decline and finally obsolescence by not recognizing and capitalizing on technological and cultural changes that were taking place. It was a classic case of a business model being disrupted from the outside, by companies ranging from Netflix to Redbox, and being unable to recover.

But a story on the National Public Radio (NPR) program Marketplace makes clear that this may in some ways have more to do with Blockbuster than the video rental store concept.

Family Video, the story says, remains the biggest player standing: "Based in the Chicago suburb of Glenview and operating across the Midwest and parts of the South, the chain has 779 stores — a number that continued to grow in 2013, even as Blockbuster closed up its last company-owned shops."

The story makes clear that Family Video has been judicious about choosing locations, is known for customer service, and prices movies carefully - charging $1 for two movies in the case of older films. And, while business continues to be good, management understands that technologies such as streaming cannot help but have an impact … so they "recently became the largest franchisee of a pizza chain called Marco's. The company already has more than 50 stores, with plans for almost 200 more in the next two and a half years." Family Video is putting the new pizza parlors next to its video stores … figuring that pizza-and-a-movie is something that Netflix can't offer.

Call it a differential advantage. And an Eye-Opening example of how to remain competitive even in a tough environment.  
KC's View: