Viacom might be a latecomer to the world of retail entertainment, but it’s sprinting to catch up with the pack.
In late May, the media giant cut the ribbon on a flagship Chicago store that will sell custom merchandise for its brands, which range from Nickelodeon and MTV to Paramount Pictures, VH1, Star Trek and Nick at Nite. Two more flagship stores are planned for New York and San Francisco, where Viacom is currently searching for store locations.
In addition, five Nickelodeon boutique shops are scheduled to open in malls around the U.S. by year-end, with one deal confirmed for Mall of America, and others plotted for high tourist attraction locations, according to Janice Hamlin, vice president of marketing at Viacom Retail Group. If those stores are a hit, Hamlin explains, starting in ’98, Viacom will roll out 100 or more Nickelodeon stores over two years.
Each store will be designed ‘to have an engaging environment and to have an element of surprise and discovery,’ says Hamlin, explaining that the boutiques will maintain some of the interior design spirit from the Chicago store’s Nickelodeon section. For instance, in the Viacom Entertainment Store, a Hideout Hut allows kids to spy on their parents on another floor with a giant periscope. A button on a 16-foot Nickelodeon welcome totem pole activates giant gears on the ceiling of the two-story store, and Oblina, a character from AAAHH!!! Real Monsters, pops out of a toilet every few minutes to shrill greetings. Compared to the 30,000-square-foot flagship store, the mall locations will be scaled-down replicas, ranging in size from 6,000 to 10,000 square feet.
It remains to be seen how these stores will fare against Disney, which has 590 retail stores worldwide, and Warner Bros., which has 171 stores. Some market analysts believe that Disney will continue to dominate because it was the first to roll out theme stores, whose popularity, according to some statistics, could be on the wane. According to a recent media report, Disney’s same-store sales dropped two percent in 1996, a sign that the market for theme stores may be reaching saturation.
But Hamlin believes that Nickelodeon will have no problem carving out its niche. For one, about 75 percent of the merchandise is created exclusively for the Viacom stores. The properties themselves, which range from Real Monsters eyeball toys and dolls to Rugrats backpacks and magnets, are what counts, she says. ‘I don’t think it’s a matter of who gets there first. It’s more who d’es a better job,’ says Hamlin. ‘It’s who has a more popular character base to work with, and one that takes us into the future. We think the pie is big enough for everyone.’
Measuring Viacom against Disney, which has been in the market so much longer, is an unfair comparison, argues Viacom analyst Fred Moran, managing director at Furman Selz of New York. Disney stores are at a mature stage, Warner Bros. stores are established, and Viacom can expect to see profitable growth, says Moran. ‘There’s no real outlet for [Viacom's] merchandise, leveraging off the content they produce. And this gives them an outlet,’ says Moran. ‘It seems to be a logical extension.’