Supermarkets and convenience stores across Sydney and Melbourne are benefiting from the growing DVD rental market by partnering with Instant DVD Australia.

Instant DVD Australia owns and operates the country’s largest automated DVD rental vending machine network. Each machine stocks up to 300 new releases, which are updated weekly. Since 2004, similar machines have been adopted by major supermarket chains in the US – including Wal-Mart, Bi-Lo, Safeway and Krogers, as well as 7-Eleven and McDonald’s – to great success.

The service is promising to be equally as successful in Australia. Since October last year, nearly 5000 customers in Sydney have used Instant DVD machines at retailers such as IGA and 7-Eleven, which have been piloting the machines.

Michael Jackas, owner of IGA in Rosebery, installed an Instant DVD machine in October 2006. “We’ve noticed that customers love it. At first, we wanted to provide them with an extra service, but we’ve seen it can also bring increased repeat business. By installing the machine, we’ve been able to enter the market with no capital outlay or extra staffing costs.”

Retailers benefit from a share in DVD rental revenue, increased sales of complementary products, repeat customer visits and increased loyalty.

Results from a survey of more than 300 Instant DVD users in Sydney show a positive customer response and increased in-store traffic:
• 49 per cent said they would purchase extra snacks and drinks at the store when buying a DVD
• 66 per cent said they would also top up on groceries when buying or returning DVDs
• 78 per cent said they were more likely to visit stores with DVD machines than those without
• 41 per cent said they made extra visits to the store because of the machines
• 78 per cent rated the machines as ‘very positive’.

Ian O’Rourke, marketing director at Instant DVD attributes the popularity of the service to its convenient locations, low cost ($2.99 per day), fast service and simplicity. Competition has had little impact. “Our machine in IGA Newtown is our most successful in Sydney, yet there are three DVD rental stores nearby,” he says.

“For a supermarket, DVD rentals are a ‘destination’ category: you can now do your shopping and pick up the night’s entertainment at the one destination.”

Instant DVD is expanding throughout Sydney, and into Melbourne and Brisbane, with 500 additional machines.