The Retail Effect: Keepsake items enhance the concession offering
The latest trend in foodservice operations is to include a vessel of some type that ties the movie patron to the film franchise. Retail items such as popcorn tins and flashy collectible cups have flooded the concession stands, all with the goal of increasing sales incidence. This trend is changing the way we as operators present our goods and services, while building loyalty to the cinema business.
The Retail Effect, as I call it, is that move from selling a single bag of popcorn to selling a high-end, multicolored, high-resolution popcorn tub made from a reliable metal as the primary source of revenue. The graphics on plastic soda cups are eye-catching and notable features that create a spontaneous purchase. The sipping device known as a straw has become a premium collectible warranting a price of dollars for an item that was once free of charge. And the kids’ combo has now become a means to sell toys as opposed to a snack box with a popcorn, soda and small candy.
Patrons enter the theatre with certain expectations of the experience. The theatre operator has a responsibility to exceed those expectations, and in foodservice we are adding retail items to achieve that goal. Customary concession items have often been literal with a concrete purpose: Hold the drink or popcorn until it can be consumed. These items have been functional, utilitarian and overt.
Now, the practice is to design a delightful, engaging, pleasurable experience, with the vessels as a means to connect the patron to the film product itself. 2015, a big year for franchise films, saw an explosion of new vessels that became a real revenue driver. Even though collectible cups have been sold in years past, Avengers: Age of Ultron saw the addition of popcorn tins used as means to entice more sales of popcorn. Jurrasic World brought us collectible cups, dinosaur toppers, and even candy. Minions caricatures of the loveable lead characters became more important than the actual snack itself. The Hunger Games—Mockingjay, Part 2, with its popcorn tins in multiple graphic styles, induced the patron to buy two instead of one, and key rings and water bottles accentuated the entire “retail” promotion for concessions. And then Star Wars: The Force Awakens blew up the world with collectibles: Four various styles of popcorn metal tins, plastic 200-ounce buckets, collectible cups, toppers and other sundry items led to huge increases in sales on the concession revenue scale.
The truth is we may not be selling snacks as much as we are selling vessels and premiums that just happen to come with popcorn or soda inside. This action creates concession bliss. The movie patron now believes they are a part of the film itself. They are “buying into” the experience, not only for the time at the theatre but for savoring it later at home. The average customer senses that they “own stock” in the film brand. Patrons now have the film images in their hands, characters in their possession, and mementos of that theatre experience that are concrete, no longer just imaginary. By selling/offering these higher-profile vessels, we are improving the value proposition extended to the guest. Our offerings no longer seem manufactured but unique, not so much mass-produced as individually portioned.
These keepsake items are growing sales at the concession stand exponentially. Example: If a theatre circuit sold 100,000 kids’ combos in the past, and now adds the topper at $2 per unit, sales would grow by $200,000. If the same circuit sold 100,000 souvenir cups (44-oz. beverages) and decided to add a $1 upcharge for the vessel, another $100,000 in new sales would result. And if a theatre circuit sold 25,000 popcorn tins at a charge of $5 per unit, that would add another $125,000 in revenue. This modest example posits a viable growth of $425,000 in annual sales. (Please note: The sample described above can be adjusted up or down depending on a circuit’s pricing philosophy and only represents an example of what could occur.)
The essence of this message is that retail items are improving the image of the snacks offered at the food outlets. But it is important to understand that the profitability model also changes. Retail packaging costs more, quite a bit more. However, the actual dollar profit results in more dollars actually deposited in the bank. Food and beverage managers should not be averse to selling these premium items because the percentage profit does not meet the standards of soda and popcorn percentages. The increase in sales dollars leads to higher revenues per patron, which offsets the cost of labor and overhead expenses as percentages. The overall intent should always be: Put as much cash in the bank as possible–we deposit dollars, not percentages.
This trend of retail augmentation can help theatre owners subtly and still increase the pleasure of the theatre experience if presented in a professional manner. It is a means to increase customer loyalty as well as increase dollar revenues. Seems like a win-win for all concerned.