A Television In Every Home And A Redbox In Every Albertsons

November 21st, 2006 Davis Posted in TV, DVDs, Kiosks, Disclosure - I own stock in co. mentioned, Netflix |

Redbox continues to make in-roads into the emerging DVD kiosk market after Video Business reports that the company has signed an agreement to put a Redbox DVD rental kiosk into every Albertson’s store by the end of the first quarter of 2007. Albertson’s currently has a 100 Redbox machines installed in their Texas based stores and this expansion is an obvious sign that they’ve seen a positive impact from adding the kiosks to those stores.

Albertson’s has been my favorite grocery chain ever since I moved to Alameda two years ago and had an opportunity to experience their self checkout solution. While many customers still prefer having someone ring up their purchases and bag their groceries for them, I loved being able to ring up my own groceries and then quickly leave the store without having to make idle chit chat with store employees.

Because of their automated checkout system, I would specifically shop at Albertson stores when I lived in Alameda, even though there were more price sensitive grocery stores that I could have used. Albertson’s enhancement of their Redbox agreement, takes this automation philosophy one step further and makes it even more convienent for customers to get their errands done, by letting them rent movies quickly and effectively when they are doing their grocery shopping.

In addition to the expansion of Redbox’s Albertson agreement, the company also announced that they will be supporting four more independent grocery stores chains with their DVD solution. According to the Video Business article

“by January, all 130 Northeast U.S. Hannaford outlets will have Redbox kiosks. The 20 to 25 Strack N Van Til chain, located in Indiana and Illinois, will get machines by the end of this year. Already housing Redbox machines are Maryland’s single-store retailer Chevy Chase and the 18-store Indiana-based Martin’s.”

Between the expansion of Redbox’s current DVD contracts, the testing by Walmart in their Atlanta based stores and the recently announced trial relationship with Walgreens, Redbox is on pace to make 2006 a record year for the company.

Over the last 12 months they have seen the number of kiosks offered double and have their sights set on eventually reaching 20,000 locations nationwide. While at this stage, their kiosk solutions are only designed to fill spontaneous short head demand, I can’t help but wonder if at some point we’ll see the company launch their own DVD by mail program and offer a solution that not only fills instant gratification needs, but can also fill niche longtail demand for more obscure titles. Only time will tell if Redbox goes in this direction, but it would be a natural compliment to their business model and as the company develops a national footprint it could provide real competition to Netflix’s dominance of the DVD by mail market.