Walmart Gets The Picture On Photo Frames

By Greg Tarr -- TWICE, 6/7/2010

NEW YORK - No longer the novelty products they were a few years ago, digital picture frames have developed into a product that is perfect for the Walmart shopper.

Many products offer price points that start at less than $100. They make great gift items for a wide range of ages and technology interests, and they can be merchandised without comprising a great deal of shelf space.

"Digital frames is a big mass-market category today, so it does fit in well with what they do," said Stephen Baker, industry analysis VP at The NPD Group. "It's a more interesting category for Walmart than it might be for a traditional consumer electronics retailer, where the business is very seasonal, fashion oriented and not so much of an interest for a tech-savvy customer." 

Although the field of digital frame suppliers is huge, in recent in-store merchandising assortments, Walmart has kept the brand selection to a minimum - Kodak and Philips.

As this went to press, many of Walmart's older and smaller stores placed photo frames in the imaging section, near the in-store printing station.

The retailer has a dramatically different merchandising approach for its brick-and-mortar and online environments.

In some Walmart locations, approximately six SKUs are showcased on peg board merchandising displays near the end of an aisle rack. Most included basic feature sets at lower price points looking to draw impulse buys.

For example, the digital frame section at a smaller Walmart location in Danbury, Conn., included screen sizes ranging from 7 inches to 10 inches, with all but one advertised for less than $100.

These start with a $79 Kodak 7-inch 16:9 basic black frame with 512MB of onboard memory, positioned above a $57 Philips 7-inch wood-tone 16:9 model with 128MB of memory.

From there, the line steps up to a $99 Kodak 8-inch 16:9 model with 128MB of memory and on-frame touch-activated controls.

This is positioned above a second $57 Philips 7-inch 16:9 model in black with 128MB of memory.

Next to that is a $69 Philips 8-inch 4:3 model with 128MB of memory and 800 by 600 resolution.

The line concludes with a $129 "Rollback special" Kodak 10-inch 16:9 black frame with touch border control, 800 by 400 resolution, and built-in Wi-Fi connectivity to easily access files from a connected PC or Wi-Fi camera phone.

Baker of NPD said that for the category Walmart uses a basic model selection that they edit down based on the volume and sales potential of individual stores.   

The mass merchant's online brand and model assortment is a completely different story.

Walmart carries approximately 45 SKUs online from vendors including Alurtek, Coby, Envizen Digital, Epson, Frame Wizard, Kodak, Motorola, Pandigital, Philips, Smartparts, Sony, Sungale, Viewsonic and Westinghouse Digital.

In some cases, SKUs are carried over from previous model lines, explaining how several brands remain on the list despite having left the market or dropped the category over the last 12 months.

"It doesn't cost them anything to carry the brands online because it's just another model that they have to sell," said Ron Glaz, IDC Research imaging program director. "They don't carry it in inventory - it comes from the vendor or another channel that's a warehouse that's actually holding it."

Online screen size assortments range from 3.5 to 15 inches (diagonally), with pricing starting at $34 for a closeout 8-inch Westinghouse frame to $334 for an Epson PictureMate Show combination digital frame and photo printer.

The majority of the SKUs featured 7- or 8-inch frames with basic feature sets.

The retailer is also using its Web site to experiment with higher-tech frames. For example, the mass merchant carries online Envizen Digital widescreen 7- and 10-inch digital TV and photo frame combinations for $92.88 and $129, respectively.

It also carries a 7-inch Wi-Fi-enabled frame from Kodak for $114.

Still, the more elaborate SKUs have not yet penetrated the in-store mix.

"It's not uncommon for retailers to use their dot-com platforms to present a wider product offering with more diverse products, but it's hard for anyone in e-commerce to come on like gangbusters and compare to any real brick-and-mortar-type volume," said Jason Topel, Pandigital assistant VP.

He added that to a degree, Walmart will take successful vendors on its Walmart.com operation into the brick-and-mortar environment when changes are being made to the departments.

Representatives from Kodak and Philips declined to be interviewed on the in-store program. But industry sources said Walmart is rethinking the two-branded merchandising strategy for the category now.

A Walmart executive told TWICE that the store doesn't engage in any bundled product promotions on frames and cameras, or other related items. 

"That's not a promotional platform we are pursuing in stores at this time," the executive said. "We currently have no plans for 3D cameras or 3D digital frames."