Blockbuster CEO: Learn From C-stores

Former 7-Eleven head James Keyes – now CEO at Blockbuster – gave his dish on the efficiency and ingenuity of convenience stores in an interview with New York Times’ writer Saul Hansell, in a blog titled “Blockbuster’s Big Gulp of Technology.”

Keyes told Hansell that most people don’t understand just how much technology is needed for those Slurpee machines and jars of beef jerky at 7-Eleven stores, and they’re missing the technological revolution taking place at Blockbuster, too.

Hansell was following up on a previous blog he’s written about Blockbuster selling equipment to download movies and play them on television. Keyes told him that convenience in the entertainment industry – just as in the convenience industry – is not becoming extinct. He said retailers can adapt by using technology rather than become victim to it.

Keyes also told Hansell that, in the early 1990s, people predicted the demise of convenience stores because of the rise of 24-hour supermarkets and the decline of tobacco sales, a mainstay of profits. New systems helped change the chain’s product mix and ultimately drove a revival.

Blockbuster, Keyes said, is in a similar position for entertainment rather than snacks, and the solution lies in imitating 7-Eleven.

“Building on ideas pioneered by Wal-Mart, 7-Eleven built a system that analyzed sales of every item it stocked to optimize the merchandise mix in each store,” Hansell wrote. “Keyes is building a similar system to make sure each Blockbuster store stocks movies of interest to its location.”

“Technology is not about automation, technology is about empowering people,” Keyes told Hansell.

“Just as 7-Eleven used automation to offer products like money orders and gift cards, Blockbuster wants to add a variety of digital entertainment services that build on its local network,” Hansell wrote.

The entire blog is available at http://bits.blogs.nytimes.com/2008/12/08/blockbusters-big-gulp-of-technology/

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