BENTONVILLE, ARK. — Walmart’s rise as the dominant
player among national retailers in cellphone
unit share started in 2001, when the
high-traffic, high-volume retailer began
to jettison the cellular kiosks that
carriers operated at the front of its
stores.
The company began to replace the kiosks
with its own cellular departments,
previously called Connection Centers
but now called Walmart Wireless.
In the departments, consumers can seek assistance
from a dedicated Walmart associate who activates
phones onsite. Alternately, consumers can use a pointof-
sale touchscreen to select the right phone, carrier
and service plan for them.
The rollout “began to reach critical mass in stores
around 2003 and 2004,” a spokesperson said.
The carrier-operated kiosks, said
Greg Hall, Walmart media and services
VP, were “essentially a leased operation,
but we saw it [cellular] as a viable
business and a growth business,
and we brought it back into the electronics
department, using Walmart
systems and investing a good deal in
[associate] training.” Creating the Connection Centers,
he said “allows us to have iPhone, Droid and
HTV Evo 4G.”
In mid-2009, the national retailer took another step to
raise its cellular profile, increasing its assortment by 30 percent, expanding
the display areas, and redesigning the department,
mostly by lowering the counters to improve interaction
between customer and associates. The cellular
department changes, part of a company-wide remodeling
program called Project Impact, had been
implemented in about 600 stores at the end of 2009.
Project Impact and the cellular department redesign
will be rolled out to the rest of the chain’s stores over
the next three years.
Coinciding with the remodeling, Walmart is stepping
up its cellular commitment in other
ways, such as teaming up late last
year with prepaid MVNO TracFone
Wireless to launch the StraightTalk
brand of prepaid phones and monthly
service, available exclusively through
Walmart.
The chain is also launching a second
Walmart-exclusive prepaid brand, Common
Cents Mobile, which provides pay-as-you-go prepaid
service in collaboration with Sprint. The service
became available through more than 700 Walmart
stores beginning May 15 and is available through
Walmart.com.
And Walmart is expanding its mobile broadband
selection with a dedicated area for pay-as-you-go
prepaid mobile broadband. Products and services
from Verizon, Cricket and Virgin, as well as an
exclusive product from AT&T, rolled out in stores
in May.
The retailer also expanded its smartphone assortment
by almost 60 percent compared with a year ago,
having launched the iPhone in late 2008. In June, the
company plans to be among the first retailers to offer
the country’s fi rst 3G/4G phone, Sprint’s HTCmade
Android-based Evo smartphone.
The changes — combined with a U.S. store count
of almost 3,600 — helped propel Walmart into capturing
the top market share in sales in
the indirect channel, market research
company ComScore statistics show.
From March 2009 through March 2010,
the latest statistics show, Walmart led
the indirect retail channel in the number
of people, on average, who activated
phones during the preceding three-month period.
For the three-month period ending March 2010,
1.3 million people purchased one or more wireless
devices from the retailer, ComScore said in citing its
consumer surveys. Best Buy, Amazon, RadioShack
and Target followed in that order.
Also abetting Walmart’s rise to cellular prominence
is the cellular industry’s shift to mass-market
status, analysts told TWICE. “CE and cellular have
moved from luxury goods to necessity products,”
said Stephen Baker, NPD’s industry analysis VP.
As a result, consumers expect to find cellphones
in mass-market outlets such as Walmart, he and other
analysts said.
Retailers such as Walmart realize that cellphones
have such a broad penetration in the consumer market
that they “drive more traffic into stores,” Baker
added. Today’s consumers are also more willing to
buy phones from outlets other than carrier-owned stores, he added. That in turn presents
Walmart with “an opportunity
to present itself as a disinterested
third party” that gives consumers
more choices of service providers,
he said.
“It’s all about choice,”
Walmart’s Hall agreed.
“We of fer multiple options
and showcase all the
major carriers, compared
to the carrier stores that
offer only one choice.”
Many Walmart stores,
however, offer postpaid service from
only three of four national carriers
at a time, just like Best Buy and other
national chains, although “some
[Walmart] stores will sell all four major
carriers if all are offered there,” a
spokeswoman said.
The industry consensus, explained
one major retailer, “is that four carriers
— with respective plans, handsets
and other details — would offer
too many options for the customer to
sort out in the retail environment and
too many options for the retail associate
to explain in a timely and efficient
manner.”
For a specific retail location,
therefore, retailers select “which
three postpaid carr
iers represent an
ideal combination
for the specific retail
location,” the retail
executive continued.
At one location,
for example, a retailer
might include AT&T “at the high
end for both rate plans and creditworthiness,
with Sprint and T-Mobile
with successively easier credit
requirements and more competitive
rate plans.”
Walmart doesn’t offer phones from
regional postpaid carriers.
