Run For Cover: Wal-Mart To Invade Electronics Market

from the 800-lb.-gorilla dept

Mon, May 14th 2007 9:48am — Joseph Weisenthal

Wal-Mart, the world's largest retailer, is starting to sag under its own weight, as it faces one of the most significant sales slowdowns in its history. The company has taken a number of steps to head off this inevitability, like selling more upscale products, but for the most part, nothing has really done the trick. Now the company plans to aggressively expand its sale of consumer electronics, including digital cameras and HDTVs. Some are wondering what the effect of this will be on competing electronics retailers, like Best Buy and Circuit City, with the latter already slumping on weak HDTV sales. The bigger impact, however, may be on the electronics companies themselves, since Wal-Mart is known to place extraordinary pricing demands on the companies that sell to it. As it is, there are already major concerns about a coming slowdown in consumer spending, so between that and Wal-Mart's monopsonistic practices, a number of electronics makers could be feeling some pain. Also, as part of the new push, Wal-Mart plans to start selling Skype-branded internet calling gear. It will be interesting to see if the company can sell low-cost VoIP products to a customer base that's always looking for a bargain.

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Stephen, 14 May 2007 @ 9:57am

Re: "Wal-Mart is known to place extraordinary pricing demands on the companies that sell to it."

Here's the article that says all you need to know about how Wal-Mart uses a brand's reputation for quality to sell cheap, poorly made crap to the ultimate disadvantage of brand, the consumer and the environment (seeing that everything they sell is cheap enough to be disposable, and likely will become so): "The Man Who Said No to Wal-Mart."

http://www.fastcompany.com/magazine/102/open_snapper.html
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zaneZEROZERO, 14 May 2007 @ 10:01am

General
I never shop at wal-mart for electronics or things like that. Wal-mart has too general everything and just doesn't have the stuff hardcore people like. Hardcore photographers want to buy from people who care about photography as much as them, not some recently graduated guy who spends his time fishing.

Wal-mart sells mainstream things to mainstream people. General, bland stuff. I haven't bought something from them in a long, long time.

If you want good deals from good people, you go to a store where people care about what they're selling.
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- Anonymous, 14 May 2007 @ 10:07am
  
  Re: General
  >not some recently graduated guy who spends his time fishing.
  
  Around here, I've got a pretty good feeling that most of the local Wal-Mart floor employees haven't graduated from anything...
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  - Anonymous Coward, 14 May 2007 @ 10:28am
    
    Re: Re: General
    good one
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  - Anonymous Coward, 14 May 2007 @ 10:35am
    
    Re: Re: General
    The Wmt employees work hard....their employess have good manners. Do you?
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    - Wizard Prang, 15 May 2007 @ 7:41am
      
      Really?
      You have obviously been luckier than I.
      
      Those I have seen - when I can find one - rate from average to poor. Working at that place for those wages, I'm not surprised.
      
      I only shop at WM when I have to, and never more than once a week. For an enjoyable shopping experience I go elsewhere.
      
      http://wizardprang.wordpress.com/2004/10/24/youre-losing-me-wal-mart/
      http://wizardpr ang.wordpress.com/2005/08/26/is-wal-mart-good-for-america/
      http://wizardprang.wordpress.com/2006/08 /24/escape-from-wal-mart/
      http://wizardprang.wordpress.com/2006/10/24/10-reasons-target-is-better-t han-wal-mart/
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- WMT good for consumers, 14 May 2007 @ 10:26am
  
  Re: General
  I agree. At it's core, WMT is a supply chain company, and pretty much invented the industry. Their pride is in knowing what consumers want, when and where. They have the 2nd largest computing system behind the federal gov't...
  
  In areas where WMT has a good presence, all consumers benefit because it drives down prices at all businesses because they commoditize a good number of products.
  
  Where you shop is totally up to you.
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IronChef, 14 May 2007 @ 10:11am

Lee Scott did a 180 on me
Interesting strategy. I truly thought that WMT was going to get into the more lucrative Home Improvement sector.

BBY and CC have, well, a decent supply chain management strategy, whereas your LOW and HD really struggle in this area. My SWOT analysis wouldn't have reccomended tech, but considering that many stores have undergone a reset in the past year, and Lee Scott must have some exclusive deals with Chineese manufacturers.
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W4RM4N, 14 May 2007 @ 10:30am

WalMart
Stephen pulled the best reference which states it all. I read this article a while back, and it shows how WalMart directs how things will sell. They force a vendor to create a lower-end product that still resembles the original product, so it can be sold at a lower price. This puts the vendor's reputation at risk. It would take too much effort on WalMart's side to persuade me to purchase electronics there. Remember, the product you see at WalMart is not the same product you see at other stores.

I rarely get a deal from stores where people care about what they are selling (zaneZEROZERO), but you do get treated a lot better. Our mom and pop music store might not beat Musicians Friend, but they will sit down and talk to you about your needs, and will back the products they sell. Costs extra, but worth it.
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- Vincent Clement, 14 May 2007 @ 1:43pm
  
  Re: WalMart
  Exactly how does Wal-mart 'force' anyone to do anything? Many retailers ask manufacturers to produce all sorts of goods for them. So a vendor said no to Wal-mart - and survived. Oh, my god, who knew that was possible? Wal-mart is not the be-all and end-all of retailing. Yes, Wal-mart is the biggest player, but around 65 cents of every dollar spent in the general merchandise market is spent somewhere other than Wal-mart.
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Andy, 14 May 2007 @ 10:35am

Isn't the margin on consumer electronics already paper-thin?
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Anonymous Coward, 14 May 2007 @ 10:49am

general
I never ever had a problem with a Walmart employee. They do their jobs well.
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- TheDock22, 14 May 2007 @ 11:09am
  
  Re: general
  Wow, that is rare. I just recently went to Walmart for paint and the guy stuck his finger in the paint for a sample. Sad thing is, THERE WERE Q-TIPS RIGHT NEXT TO HIS REGISTER!! What the heck did he think they were for? He must have eaten too many paint chips as a kid. Wal-mart is a cult.
  
  Go ahead and buy electronics from Wal-Mart, but do not go crying to them if it breaks. I have heard Wal-Mart will be offering the manufacturer's warranty, but will only replace defective electronics returned within 4 days. Even Best Buy allows 14-days to return computers. Beside, I like my electronics to last more than a couple months. I only buy top quality.
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  - Ty, 14 May 2007 @ 11:39am
    
    Re: Re: general
    Maybe he wants to be like the home improvement guy on TV. One of his habits, is using his fingers to smear a bit of paint on the wall.
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  - IronChef, 14 May 2007 @ 1:15pm
    
    Re: Re: general
    I just recently went to Walmart for paint and the guy stuck his finger in the paint for a sample. Sad thing is, THERE WERE Q-TIPS RIGHT NEXT TO HIS REGISTER!! What the heck did he think they were for? He must have eaten too many paint chips as a kid. Wal-mart is a cult.
    
    Fact: Walmart sells more paint than all other home improvement stores combined.
    
    It's easy to point fingers when you have 10,000+ employees. Some may be sub-prime, or put into roles that they are not best fit for. But for all intents and purposes, when you stopped at WalMart for paint, it showed that the system worked.
    
    WalMart is a Supply Chain company masquerading as a retailer.
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    - TheDock22, 14 May 2007 @ 2:26pm
      
      Re: Re: Re: general
      Somewhat. I got the first batch of paint, two gallons I mixed at the same time, but the guy messed up and mixed me two separate shades. So I went back, had to get the paint exchanged (after spending 10 hours painting no less).
      
      I was so mad, I got my money and bought the paint at Home Depot instead.
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Mikey B, 14 May 2007 @ 10:52am

HDTV's
I went on a shopping spree this last weekend at trying to find a basic 32" HDTV for my bedroom. I happened to be in Wal-Mart so I browsed their TV selection. I found an open-box LCD for $450. However, it wasn't hooked to a source or even plugged in. I found an associate and asked if I could check it out before I bought it and if it had any accessories available with it (remote, a/v cables, etc). He told me that he couldn't hook it up because he's not the one that set's up their TVs. Then he said he had been on vacation for the last week so he didn't know anything about accessories. I told him it wasn't that hard just a power connection and a component cable from another display would work. He said that I wasn't allowed to "mess up" their displays. Even after assuring him it was this easy he said that I would have to come back the next day and talk to the manager. I asked if he could at least look for the accesories and he again said that he was on vacation and had no idea where they would be. Then he threw up his hands and walked away. I mean it's Wal-Mart so I sort of expected this level of customer service...
Just for kicks I happened to go to another Wal-Mart nearby (as there are 3 within 10 miles of my home) I went in to this store and noticed that all their HDTVs looked horrible. Upon further inspection I found they were all still hooked up with standard analog coax cables. I found an associate and asked him if I could see some of the HIGH DEFINITION TVs hooked up to a HIGH DEFINITION source. He told me that it WAS a HD source and I pointed and explained to him that it was not a true HD source as it was an analog cable and not a digital connection. He then told me that it wasn't possible and I would just have to make my decision based on what I saw.
I share these stories simply to ask the question, when will Wal-Mart figure out that they have to get somewhat knowledgable employees? I know the cost vs. experience equation, but come on. Unfortunately, what I've seen happen when I used to work for Best Buy was customers would come in and get all the information from us then go and buy at some discounter like Wal-Mart or Sam's Club. Is price REALLY the only motivational factor any more? Are the average customers out there that have no clue about technology ok with spending 600 - 3000 dollars and not truely understanding what they are or are not getting? But just because it's at Wal-Mart they figure it's a good deal and just go with it??
If they truely expect to sell higher level products and really compete don't they HAVE to do something about their staffing at some point???
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- Streaker, 14 May 2007 @ 1:02pm
  
  Re: HDTV's
  I consider Walmart to be somewhat of a "self service" shopping experience. I know what I'm looking for before I go there.
  
  And, to be honest, I've found Best Buy employees to be as knowledgeable as Walmart employees when it comes to the products they're selling.
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- Wizard Prang, 15 May 2007 @ 7:43am
  
  Re: HDTVs
  when will Wal-Mart figure out that they have to get somewhat knowledgeable employees?
  
  Old Jewish Proverb: You pay peanuts, you get monkeys.
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- FH, 17 May 2007 @ 6:56am
  
  Re: HDTV's
  #1 Is price the bottom line?
  YES
  #2 Do they have to get educated professional staff?
  NO See #1
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Anonymous Coward, 14 May 2007 @ 10:58am

I've never met a walmart employee that knew about the product they were selling. So now i'm gonna buy a $10,000 plasma from a HS dropout or minimum wage "i don't care about my job" teenager?
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- Wal-Mart Career Individual, 10 Jun 2008 @ 5:04am
  
  Re:
  Not all Wal-Mart employees are "i don't care about my job teenagers". In fact, I am a 15 year veteran still working for Wal-Mart, currently in the Electronics Department. Though I admit the store is run poorly, I have not given up hope that upper management will start showing some concern about ensuring that all employees get properly trained- not just the dedicated few.
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matt (profile), 14 May 2007 @ 11:01am

monopsonistic ?
monopsonistic? what is this?

sorry I looked everywhere but I can't find psonist or sonist anywhere...

just looking for someone to help my brain out from what it';s apparently missing? I thought monopolistic was implied but perhaps not?
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- Anonymous Coward, 14 May 2007 @ 11:19am
  
  Re: monopsonistic ?
  http://en.wikipedia.org/wiki/Monopsony
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- devboy00, 15 May 2007 @ 6:54am
  
  Re: monopsonistic ?
  I consider myself fairly fluent, but that one got me too. Here:
  
  http://en.wikipedia.org/wiki/Monopsony
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  - devboy00, 15 May 2007 @ 6:55am
    
    Re: Re: monopsonistic ?
    Gah! too late.
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anonymous coward, 14 May 2007 @ 11:11am

there are alot of suburb and country-dwelling idiots in this country that have no concept of taste or quality. they shop at wal-mart. they'll buy anything at wal-mart from huggies to 50" plasmas as long as their blue collar paychecks can keep making the minimum credit card payments.

you'll never go broke selling worthless junk to morons...
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- SF Guy, 14 May 2007 @ 12:04pm
  
  Re:
  You are an asshole of great magnitude.
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Norman, 14 May 2007 @ 11:14am

Not Just A Walmart Issue...
Thank god I never go into one of these huge stores blind. The gripes I see here about the uninformed employees of Walmart apply to ANY huge store. For example Fry's is just as bad, if not worse, than Walmart in their sales associate quality. Fry's is the Toy 'R' Us for adults for those unaquainted with them. You have to do your own research before heading into these stores. On more than one occasion I found myslef educating fellow shoppers in these stores on what they are looking for. The deer in the headlights look was unmistakable.
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Anonymous Coward, 14 May 2007 @ 11:14am

>>

Hilarious!!! Good one.

While I have no love for Walmart, I'm glad to hear this because I have even less love for Best Buy. I would love to see them go under so good luck Walmart.
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s0nspark, 14 May 2007 @ 11:15am

Personally I wouldn't ANY big ticket item based on the salesreps input - be it at WalMart or specialist boutique! I consider it my responsibility to educate myself before purchasing and, when it's time to buy, I'll go where the price (and store reputation for service) is best.
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Anonymous Coward, 14 May 2007 @ 11:19am

People that are into high-tech stuff don't need some employee to tell them about it. They do their own research. What about all those people that buy electronics online? Did they talk to some employee about it before buying? Probably not... If Wal-Mart can deliver good prices on electronics that are widely available (not Wal-Mart only models), its a good thing. Best Buy is a ripoff and needs to be put in its place.
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smartshopper, 14 May 2007 @ 11:25am

I usually check out all the consumer electronics I want at a local store (Best Buy, Target, Fry's, Walmart, Walmart) and if I like it I'll order it online (newegg.com, amazon)

It's a lot cheaper and saves me sales tax...
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- Anonymous Coward, 14 May 2007 @ 2:12pm
  
  Re: Smartshopper
  You are a dickhead.
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Mike, 14 May 2007 @ 12:19pm

How is WMT improving their electronics department
It sounds to me like Walmart is trying to improve their electronics department. They are far from perfect, but one thing is certain, they are continually improving. A little over a week ago I was able to buy a fairly nice Sony digital camera at 6:00 AM on a Saturday morning. I was impressed with their selection, I was impressed with the ability to locate a store with the camera I wanted en route to my destination via the web. This is anecdotal, and while I've had my share of frustration with Walmart, I've noticed that their stores have gotten better over the years. I neither get nor expect the same level of knowledge or service that I would expect from a specialty shop, regardless, I had a pleasant experience with a friendly, helpful walmart employee. And all of this at a time of day when no other outlet could accommodate.

IMHO, the only thing they need to do to match Best Buy is improve their TV displays, optimize the connections and increase selection, which seems to be something they're doing in their newer stores. Just seems to me like some people have a problem with walmart improving, and that I don't get.
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TheDock22, 14 May 2007 @ 2:20pm

Just as another point...
I decided today at lunch to play a little game. I went to Best Buy and asked 2 different associates at different times whether or not I could hook up my Playstation 2 to my wireless network, wirelessly. They both pointed me in the direction of the Linksys game adapter which does just that.

I ran over to Walmart and asked all three of their associates in the electronics department and they all said it was impossible to do that, I would have to use a wire. The one guy even said that same thing...standing in front of the Linksys Game Adapter...which says in BIG letters on the front how you can connect your Playstation 2 wirelessly to your wireless network.

I've lost all hope for Walmart and electronics...but I was able to pick up some cheap sunglasses.
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- IronChef, 14 May 2007 @ 3:56pm
  
  Re: Just as another point...
  Interesting... but it supports my theroy that Walmart focuses on operational goals, rather than product education, which in some sense, can lend itself to unsatisfactory customer experiences. (Poor qualification of a product to a customer, unclear statement of company policy.)
  
  Slightly off topic- WalMart employees are barred from recieving any type of gifts/spiffs from vendors. BestBuy and Circuit have always allowed this. But at WalMart, vendor-garb like t-shirts, prizes, lunches, mousepads, etc are a big no-no. Vendors could be fined or removed if Bentonville catches word. From a vendor side, these things make an employee more excited about reccomending a product, and generally promote brand awareness.
  
  But because WalMart is so involved in product rationalization in Bentonville, I suppose they request certain things are put on the box, etc. The entire store is very geared towards self-service, which again, is how the company maintains low OPEX.
  
  Personally, I only purchase durable goods at WalMart, but it'll be interesting how this Technology strategy pans out. Hopefully the new electronics dept will have more focus on hiring technology SMEs or something.
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  - IronChef, 14 May 2007 @ 4:05pm
    
    Re: Re: Just as another point...
    Whoops -- That's the name of the Haircut place I am opening up and I don't buy durable goods, but rather, softgoods at WalMart.
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- Streaker, 14 May 2007 @ 6:39pm
  
  Re: Just as another point...
  Five minutes of research online would have given you better information. Then, you could have gone straight to Walmart and possibly saved yourself the time and a few bucks.
  
  In fact, you probably could have gone straight to Best Buy and bought a wireless hook-up that was less expensive than the one the Best Buy pointers told you to buy.
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  - TheDock22, 14 May 2007 @ 6:54pm
    
    Re: Re: Just as another point...
    Oh I have a wireless adapter for my Playstation 2, I didn't need help from anybody. I was just curious after reading this article.
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    - IronChef, 15 May 2007 @ 10:12am
      
      Re: Re: Re: Just as another point...
      I occasionally secret shop (read: play "dumb customer" game) too. It's amazing what you can learn operational-wise by how a sales rep approaches you, addresses your needs, and if they do things like offer value-added services.
      
      I was at Target recently and asked about the extended warranty offered on an iPod. The information was on the counter next to the register, yet they were clueless and had to radio the boss about every question I had. They were simple questions like- can If it goes out, can I exchange it at the store. After 5 minutes of this song-and-dance, I just opened up the package and read the fine-print.
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Anonymous Coward, 14 May 2007 @ 4:11pm

must reading
I thought I knew a lot about Walmart and retailing in general until I read "The Walmart Effect".

Just fascinating how that comapany changed EVERYTHING - and not just in the USA.

It's a "must read" for citizens of every country.
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Spursfan, 14 May 2007 @ 4:35pm

once upon a time
My Dad had a Dukane grill when I was a kid, he's been using it for over 20 years and it still cooks great.

One day I was in WalMart and found a two burner Dukane grill on clearance for $125 - Dukane usually sells at specialty stores for about $600. I bought their last 3 grills, gave two to friends, and kept one for myself. Granted, these grills were called "Americana by Dukane" and they obviously were made of materials of slightly less quality than mainstream Dukane grills, but they were still Dukane.

7 years later, I'm still quite happy with my cheapo strange walmart off brand Dukane grill. I guess Walmart was experimenting with them, and decided that demand was not great enough.

And that is all I have to say about that! (LOL, I know, what a random story.)
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Gerry, 15 May 2007 @ 8:56am

Re: WalMart
Depending on a retailer to "educate" you on a tech purchase is a mistake, no matter where you go. If you haven't figured out how something works - or why you need it in the first place - don't expect any retailer to be able to help you.
Most anti-WalMart propaganda comes from unions that are pissed that they can't organize WM employees.
If you have lots of money and absolutely must pay top dollar for everything, and your desire to support over-priced retailers or the union crowd is more important than your need to save a few dollars here and there... well, how nice for you. You must be very proud. Please _don't_ go to WalMart, so you're not in my way when I'm there.
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FH, 17 May 2007 @ 6:49am

Monopsonistic
While there is a huge buyer in Wal-Mart, they are not the exclusive unless a complany choose to sell to them exclusively.
While Best Buy, Circuit City, Radio Shack, Costco, and BJ's do not have the volume of Wal-MArt individually, collectively they do.

Frank
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Concerned US citizen, 7 Jun 2007 @ 8:01am

Wal-mart
I use to shop at Wal-mart on a weekly basis. Now, maybe once every 6 months. Look what Wal-mart has done - closed all of the mom and pop stores - and now drove most of the factories overseas - the majority of product from Wal-mart is from China. Thank you Wal-mart for taking away the American jobs. Before long your Wal-mart will lose even more money do to the lack of jobs in the U.S. - if we are not making money, we can not spend it.
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Bob Johnson, 21 Jun 2008 @ 4:38pm

Enough bashing
Yawning after reading lines and lines of the obvious. WalMart has an employee/management problem, always has - always will.

The question is, is a Panasonic LCD television a Panasonic television. Meaning - is it the same one Best Buy sells or is it stripped down, gutted, el - cheapo. That's all I want to know. It would not be wise to save 300.00 dollars at Wal Mart and end up with a puff of smoke in your viewing room a year later. At the same time, it would not be wise to spend 300 dollars more for the very same product elsewhere.

I recently investigated a Panasonic 50 inch Plasma from which I obtained the Model Number from an employee. Upon returning home, I went to the Panasonic internet page and typed in the provided model number. No match? I was likely given the wrong Model Number, likely. Then I purchased a Dell E228WFP Monitor. Upon getting it home, I went to the Dell internet page to register it. After two weeks of emails going back and forth between Dell and myself, a number that Dell needed was found on the shipping label of the box. As a rule you find these numbers inside the box on a printed label. Dell reps seemed to think that WalMart would provide this information. Upon asking people at the WalMart store for the information, you guessed - deer in the headlights. I have another Dell Monitor which I purchased directly from Dell. All the required paper work was inside the box, not buried on a shipping label outside the box.
The kicker for me was that the Dell rep told me the warranty on the monitor started when WalMart purchased the Dell, not when I purchased the Dell. Poor me, as it turned out, the Dell I purchased at walMart was on sale at the Dell internet store for less than what I paid at WalMart, shipping included. I'm too lazy to return it.

Anyway, buyer beware. Big screen TV is NOT cheap by anybody's standard, at least not by mine. The prices and the name brands now appearing at WalMart are inticing. BUT are they the same TV??? I just don't know. I do know the gut wrenching feeling is that if I shell out two grand at WalMart, I am clearly on my own thereafter. Not a good feeling.
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Ron, 18 Sep 2010 @ 1:45pm

Wal Marts LIES FRAUD and poor customer service
I purchased a $600.00 lap top from a Michigan WAL MART STORE ABOUT 16 MONTHS AGO. I was told the extended warranty offered at $100.00 would cover just about anything including internal battery. Now i need a battery replaced and wal mart refuses to even acknowledge my BBB complaint, my 17 telephone calls to corporate and simple choose to ignore me. If you were to call or visit a wal marts and ask about the extended warranty today, you will most likely hear the same lies which i was told “Batteries are covered and this is a great deal"
Batteries are not covered and almost all competitors extended warranties cover batteries except wal marts.
RIP OFF FRAUD AND LIES
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