At The Movies With Buffet

Updated: Oct 29 2002, 05:30am hrs
The other day, when I was at the movies with Warren Buffet... Whoa, back up. I can see you smirking in disbelief, but I kid you not. I did go to the movies with the legendary chairman of Berkshire Hathaway some weeks ago. Okay, so there were another 300 people there. Nevertheless, it was a special event because it marked a new chapter in the saga of retailing. Importantly, it was a tutorial in thinking outside the box. The to-do was about Jordans Furniture, based in Natick, Massachusetts, which in August 2002 became the worlds first store to have its own 250-seat 3-D IMAX movie theatre.

Usually, IMAX theatres are found in museums and aquariums where documentaries made on proprietary IMAX technology provide viewers large-than-life experiences. Why would a regional furniture brand there are only five Jordans outlets and all are in Massachusetts spend $4-$8 million to set up a theatre at its flagship store Thats because kids and their parents love it. By using entertainment as a pull, Jordans can attract more visitors to stores even people who have no plans to buy furniture.

Jordans shoppertainment game plan was born when the Tatelman brothers, Barry and Eliot, took over the family business in 1973. Says Barry Eliot: We realised that furniture shopping was a big bore. If we wanted to sell something, we had to get bodies into the store. With entertainment, we are able to do just that. The Tatelmans gave each Jordans store its own fun schtick. One gave away free cookies and balloons; another ran a Mardi Gras show all day. The takeaway: Traffic, traffic, traffic.

The trick lies in finding ways to make the retail store a destination for even people not interested in your products. With the IMAX theatre, the Tatelmans are now showing that you can twist your retail paradigm even more: They now want to make furniture an impulse purchase. In order to get to the lobby of the IMAX theatre, visitors have to walk through rooms of tastefully displayed furniture. Each piece prominently displays a price so that you cant help but take in the information. The exits are designed so that the audience has to leave through 15,000 square feet of new showroom space space stocked with contemporary furniture, furniture for home offices, and furniture for home entertainment centres.

To lure impulse shoppers to the store and make sure that the IMAX theatre is full, Jordans has other ploys. Its tying up with local schools to bring in bus-loads of students (who will then drag in parents). Non-profit organisations will be able to host functions at the theatre. An entire row of seats has been ripped out to make way for 25 wheelchairs and there are special programmes for retired folk (think: Aging baby boomers wanting to re-do homes). Richard Forbes, the manager of the Natick store, expects 600,000 to 700,000 more people in the first year thanks to the IMAX. With the IMAX, we will get even people who earlier would not come to us. The takeaway: Sales, sales, sales.

Every customer-acquisition strategy has to have a clear return-on-investment gameplan, based on converting potential buyers into serious shoppers. The Tatelmans certainly know what they are doing. Jordans is one of the top three furniture stores in the US in terms of sales per square feet and sales have been growing at an average of 10 per cent a year turnover in 2001 was close to $280 million. Which is why, in October 1999, when the rest of the world was buying internet stocks, Warren Buffets Berkshire Hathaway acquired Jordans.

On the opening night for the IMAX, Buffet and the Tatelmans mingled in the theatre lobby. When I asked Buffet what he thought about the IMAX strategy, he said he was thrilled. His eyes twinkled as he pointed to the crowd near the Coca-Cola dispenser Coke is another big Buffet investment and said: Im even helping sell more Coke. The takeaway Leverage, leverage, leverage. Says Buffet stealing popcorn from Barry: Make sure everything feeds on everything else..