Reinventing Retail Strategies

With the challenges that retailers have faced in the past several months, leave it to the world's largest retailer, one that could probably weather more than a few downturns, to change its approach to selling and merchandising CE.

A day after the deadline for this issue, Wal-Mart was scheduled to provide details on its change in CE strategy. As we reported on p. 1 of our May 21 issue, Wal-Mart is upgrading its product offerings, introducing customer service, redesigning displays and signage, and providing product training for its employees.

In our initial report, Vizio, Polaroid and Samsung TVs, Sony and Philips HTiBs, and digital cameras from Canon and Nikon were said to be part of the new mix.

From what we heard just before last week's meeting, sales trainers are all over the Wal-Mart locations that are testing the new strategy and the new departments may feature a wall of brand-name, flat-screen TVs. (Check www.TWICE.com for further details.)

We've since learned that Wal-Mart has also signed with Dell to carry its PCs starting on June 10 in over 3,000 Wal-Mart and Sam's Club locations, bringing another top CE name brand into Wal-Mart's fold. (See p. 1.) Maybe that knocks off that rumored Dell/RadioShack marriage talk.

When the initial story broke a few weeks ago, we spoke to buying group executives Jim Ristow of BrandSource's HES division and Robert Weisner of the Nationwide Buying Group told us they didn't think that Wal-Mart's moves would pose too much of a threat to their members. Ristow added, "We're not so naive as to believe it won't [affect us], but the impact will be much less than for box stores."

Wal-Mart isn't the only retailer playing with its CE formula. It seems as if CompUSA has gone "Back To The Future" for its new strategy. (See p. 4.) The company said it will now focus on mostly small and medium businesses.

Isn't that where CompUSA and the rest of the old "home office" and computer chains came in around 20 years ago? Does that mean that "convergence" at CompUSA is dead?

Well, not quite. The industry has already converged for good. And while CompUSA will emphasize business customers, there will still be traditional CE products in the mix tailored to "technology enthusiasts," as the chain calls them.

Consumer electronics are more complicated than ever before in both product capabilities and the ability of retailers and manufacturers to make a buck. Wal-Mart seems to be moving away from its roots and providing more service, brand names and informed sales help to do it.

CompUSA is in many ways going back to business customers to reinvent itself. It will be interesting to see what changes other retailers may announce in the coming weeks and months to remain vital players in this ever-evolving industry.