CNet Buzz Outloud jumped on the negative bandwagon about the Blockbuster/Circuit City merger in yesterday’s podcast. Rather than a private conversation with my iPod, I figured I’d blog about why I think the merger actually makes sense – at least from a marketing perspective.
It boils down to this:
Blockbuster = store traffic
Circuit City = impulse purchases (when enough foot traffic)
A perfect analogy here is movie theaters and malls. Movie theaters pay much lower rent per square foot than retailers in a mall because they add value to all the other tenants. The retailers that receive the bulk of this value are those that sell impulse purchase items.
Personally I rarely go into an electronics store without making an impulse purchase. Also, every time I go to Blockbuster, I get bored standing around as my kids take a long time picking out a movie. If I could browse a section of electronics (think Sharper Image type stuff) while my kids are browsing movies, I’d likely make some impulse purchases. Of course this requires putting smaller cheaper electronics near the movie rental section to draw you in… Occasionally I’d even wonder over to the bigger ticket items.