Redbox is a fully automated video rental store contained in 12-square feet of retail space with over 36,000 locations nationwide. The Strategy & Analytics team at Redbox uses data to optimize Redbox's physical footprint and location strategy. This presentation explores how internal big data modeling and third-party datasets have transformed Redbox's approach to location strategy. It traces Redbox's evolution from its early days placing kiosks in McDonald's restaurants to its current scale and optimization of kiosk placement using metrics like individual kiosk performance and relationships between kiosks.

1. SXSW 2014
Making Sense of Big Data at North America’s
Largest Retail Network
Matt James
Sr. Director, Strategy & Analytics at Redbox
Andrew Thompson
Analyst, Strategy & Analytics at Redbox

2. our company
our team
our presentation
Redbox is a fully automated video rental store contained in 12-square feet
of retail space. Renting more than 3 billion discs to date, Redbox is
America's destination for movies and video games. There are more than
36,000 Redbox locations nationwide that feature upwards of 200 titles and
630 discs. More than 68% of the U.S. population live within a five-minute
drive of a Redbox kiosk. Redbox is where America rents movies and
games.
The Strategy & Analytics team at Redbox exists to answer the most
important strategic questions about our business. Data-driven decision-
making is built into Redbox’s DNA. Led by Matt James, the S&A team
analyzes all inventory, transaction, location, and operations data for the
US and Canada and turns that into meaningful insights.
Like any retailer, Redbox is constantly optimizing its physical footprint to
ensure placement in the best locations possible, providing the most
convenient customer experience. This presentation will explore how
internal big data modeling, combined with rich third-party datasets have
transformed the way Redbox approaches its location strategy. The
presentation will include many examples of how the Strategy & Analytics
team at Redbox uses Tableau to reach new insights and empower
collaboration and decision-making across a broad audience throughout the
company.
overview

3. Introduction
Redbox by the Numbers
Redbox is a data geek’s dream – we have stats and metrics that
quantify every aspect of our operation. The audience may be familiar with
their local Redbox kiosk, but understanding just how ubiquitous Redbox
has become requires some context-setting. Sure, there are the highlights:
3B+ rentals to date, 20M+ unique credit cards renting at our kiosks per
month, but there’s more intriguing stuff than what makes it into quarterly
reports. In 2012, the average Redbox kiosk brought in just under
$4,000/sq. foot – outranked only by Apple’s retail locations1. That’s pretty
amazing considering Redbox rents movies and video games for $1.20-
$2.00/night and the Apple store sells iPads, iPhones and Macs for $300-
$3,000.
agenda pt i
Location Story
Early Days
Most people are shocked to learn Redbox turns 11 years old in 2013.
Today, our 43,000+ kiosks are in all 50 states, Puerto Rico, and recently
landed in Canada – but the first ¾ of our life as a company was a test-
and-learn process, exploring and perfecting our model for the massive
growth in locations from 2009 to present. Redbox emerged from
McDonald’s Ventures in the early 2000s as a way to drive traffic to
McDonald’s restaurants. Outerwall (formerly known as Coinstar Inc.) took
an equity stake in Redbox and it became a private company. The
relationship with Outerwall enabled Redbox’s expansion outside the QSR
channel.
1 Apple 2012 Retail Sales per Sq Ft $6,050 – RetailSails 2012 Chain Store Productivity Guide
Redbox 2012 Retail Sales per Sq Ft $3,965 – Outerwall Q4 2012 Segment Supplement.

5. Location Story
Getting to Scale
In 2009, Outerwall purchased the remainder of Redbox. The acquisition
further accelerated Redbox’s presence in the
grocery, drug, convenience, and mass channels. In 2012, the company
made its final push to full-scale, acquiring the Blockbuster Express kiosk
business operated by NCR and expanding into the dollar channel.
Today, consumers know and love the Redbox brand – they also
understand that our kiosks can be found at all their favorite retail
locations. More than 50% of the discs rented at Redbox are returned to a
different location than where they were rented.
agenda pt ii
Location Story
Optimization
All retailers are concerned with maximizing the productivity of their
physical assets – for Redbox, those are kiosks and discs and their
respective productivities are completely interdependent. A kiosk without
discs can’t make any rentals and discs can’t magically rent themselves. In
2012, the S&A team undertook a project to finally understand how these
two factors related to one another leading to a breakthrough metric for
location productivity. The new metric led to a fresh client engagement
approach and became a case study for intuitively communicating data
across the Redbox organization.

6. Location Story
To Infinity and Beyond…
With a firm grasp on how each kiosk performs individually, the S&A team
set out to understand how each kiosk related to one another and the
extent to which accretion and cannibalization play a role in the
productivity of each location. The trade area of each Redbox location has
evolved along with an understanding of the business – beginning with as-
the-crow-flies distance, moving to drive time trade areas, and finally to
mini-networks of related kiosks defined by transactional data. We look to
our customers’ behavior to tell us how we can be even more convenient.
Being in the right locations should enable Redbox to continue to offer
affordable entertainment to millions of more customers for years to come.
agenda pt iii
Redbox network July 2013, significant kiosk relationships in Austin, TX market