I just ran across a news alert about a new concept McDonald’s and Redbox are testing in Colorado. If any of you are in the Longmont area, tell us about these new boxes… If you can, take a photo and I will post it here.
Full story is from the Associated Press…
(AP) LONGMONT, Colo. The city has become the national testing ground for something that, if successful, will be adopted elsewhere by the world’s largest fast-food chain.
A company called Redbox is using two of the four McDonald’s owned in Longmont by Bob Charles to test drive-through DVD rental boxes — the first such boxes in the country.
McDonald’s started placing Redbox DVD rental kiosks at its restaurants in 2004, and the program has been extremely successful, according to Matt Sheehan, director of business development for Redbox. He projects the DVD market for self-service kiosk rentals will reach $3 billion a year by 2009, and said that well more than 1 million DVDs are rented each month through Redboxes at McDonald’s in the United States.
“We have about 700-plus McDonald’s locations,” Sheehan said, adding that one of the reasons Longmont was chosen as a test site was because of the relationship Redbox has with Charles.
“I enjoy trying things,” Charles said, noting the addition of side-by-side drive-through lanes on his South Main Street stores. “Side-by-side drive-through — that’s something that’s national throughout the system now.
“My father invented the Happy Meal,” he continued, referring to Bob Charles Sr., who originally owned the Longmont stores. “Our stores in Longmont kind of have the reputation of trying things.”
The drive-through DVD rental machines work the same as the kiosks. A customer pulls up, chooses from that week’s top 30 rental movies, and swipes his or her credit card or inputs a coupon code. Out comes the movie, for $1 a day plus tax, and it can be returned to any Redbox anywhere.
If 21 days pass and the customer hasn’t returned the DVD, he or she must buy it for $25.
Charles said he thinks the drive-through boxes will appeal especially to mothers with children in the car.
“This is like a one-stop shop for them,” he said. “They don’t even have to get out of the car.”
Sheehan said the trial will last for “a handful of months … and then we’ll make a decision on whether it’s worked, and then change it or tweak it.”
Sheehan said Redbox is watching three main issues with the drive-through boxes: whether they draw significant rentals, compared with the kiosks; whether they operate efficiently within the parameters for a drive-through at McDonald’s, which is concerned about getting customers through the lane efficiently and quickly; and what customers have to say about the boxes.
But the bottom line is the bottom line: “It’s really based on profitability,” Sheehan said.
Redbox, which is headquartered near McDonald’s corporate headquarters in Oak Brook, Ill., was a wholly owned subsidiary of McDonald’s until November, when 47 percent of the company was purchased for $20 million by Washington-based Coinstar, a vending company that, among other things, sets up machines in grocery stores in which people can redeem their change for bills.
“(Grocery stores are) the other half of our growth strategy,” Sheehan said.
Currently, there are Redbox DVD rental machines in only three King Soopers stores in Colorado, but he said customers can expect that to change now that Coinstar is in the picture.
“With the development of the Coinstar relationship, we have a national presence now,” Sheehan said.
If, in a few months, drive-through Redboxes start sprouting up at McDonald’s all over the place, it will be safe to assume the test of the machines in Longmont passed with flying colors.
(Â© 2006 The Associated Press. All Rights Reserved. This material may not be published, broadcast, rewritten, or redistributed.)