How does a long standing business maintain its services in a slowing sector? Rod Laycock, who heads up the 30 year old Civic Video chain, has taken a step in a new direction to ensure franchisees get the support they deserve.

The business of home entertainment has changed dramatically. When Civic Video started its trajectory into retailing film, there were two formats available –VHS and Beta. The first major development was the dropping of the Beta option, followed by the introduction of DVDs in the early 2000s, then the high definition format Blueray.

“Technology has had a dramatic effect on the industry. The point of difference is equipment and releases, and staff who can give advice,” CEO Rod Laycock points out.

Now the franchise chain, driven by customer demand, has moved more into snacks and accessories to go with video equipment. “They have become one-stop-shops,” he says.

The advances of digital distribution are not the only challenges faced by a video store franchisee – there’s also the issue of pirating: 35 percent of film product is pirated, he says; if and how that is controlled by the internet service providers themselves is a bigger issue but it does affect rentals.

While the video retail business has been written off by many, Laycock believes the sector still has some life in it. And he cites the situation in the music industry: “Music is different, but we still buy CDs. There will always be a demand for physical product.  The video store is still the easiest way to access and play movies. There will always be a demand, though it is diminishing.”

Laycock [pictured here] says “The theme of our last conference in 2012 was ‘last man standing’. We recognise and can’t stop the demise but we can make sure the stores that are closing are not ours.

“If you’re the last left,” he suggests, “you get a new lease of life.”

What hasn’t diminished is the power of wet weather to drive consumers into the stores: a 50 percent increase in rentals is standard for rainy weekends, he says.

On the other hand, competition for the outlets comes from how people use their spare time – sunny days, internet use and, tv choices all have an impact.

“The family has splintered its viewing habits so our role is to remind people how good it is to sit together and watch a movie. Then the source becomes a choice – store, vending machine or digital?”

A typical, well-stocked video outlet will have between 12,000 and 15,000 titles on its shelves; vending machines have about 200, Laycock says.

But beyond choice and rental price, service is a key consideration. Some people just prefer to deal with staff who know the product and can offer advice and recommendations, rather than using the more impersonal vending option.

FRANCHISE CHOICE

Civic also runs the MovieHQ network of independent video store operators, an investment option that suits those people who don’t need full service support (think IT, branding, operations support and marketing) but can benefit from the united buying power of the group.

“Brand is important in this sector but not as important as location,” says Laycock. Being in the centre of the community is vital; a video store needs to be convenient and situated where customers can easily stop or park the car.

It is summed up in the acronym for delivering success at Civic – CAVE: convenient, available, value, experience.

DIVERSIFICATION FOR SUPPORT

But with a declining sector, how can Civic maintain its services to existing and any incoming franchisees?

Laycock says the decline will level out but he has addressed this issue by looking to another field entirely – the management and support services the group can provide to other franchisors in other sectors.

“We decided to keep the team intact and offer services to other franchisors. How do they grow their infrastructures? We can provide that for them at a fraction of the cost.

“Franchise support is sustained but serves our clients as well. At the moment we can absorb the demand but we will expand the team.”

Laycock expects to increase staff numbers by the year end.

Franchisees in the network will continue to run their businesses as long as they are profitable, he says.

A handful of franchisees run combined convenience stores and Civic Video outlets but for most the focus will remain on the niche market.

“We are already quite diverse. We do what we do well and will continue to do that.”