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Distributors Voice Mixed Views On Walmart’s Plans, Practices

6/07/2010 12:01:00 AM Eastern

NEW YORK — Walmart’s decision
to upgrade and put more emphasis
on CE generated a variety of differing
comments from distributors.

While discussing the marketplace in
TWICE’s midyear distributor report executives questioned
said Walmart would have no effect
on their business, while others said
it would help promote CE as a category.

Here are what some of these executives
has to say in the past couple of
weeks:

Mark A. Gustavson, executive director/
marketing and communications,
WYNIT:
The “Clash of the Titans” between
Walmart and Best Buy will continue
to pressure manufacturers to take
cost out of their distribution models.
Distributors serving big-box must provide
clear value to both manufacturers
and major retailers if they wish to stay
in the game. Competing retailers that
offer technical expertise, service and
personal attention will develop and
maintain a solid base of loyal customers.
Successful distributors must continuously
work to identify the unique
needs of each of their retail customers,
and provide specific solutions.


Doug Robison, president, DSI Systems:
We despise Walmart and how
they go about their business. It is our
job as a distributor to assist the independent
retailers as they compete with
Walmart. It is important to steer our
dealers to the product lines that won’t
be featured in Walmart. We also will
continue to train our dealers in step
selling and ways to avoid the handful
of SKU’s Walmart will burn. The independent
retailer has an advantage as the
business gets more complex.

With IPTV convergence, as well as
3D, the independent has the advantage
over the national accounts. Consumers
will need explanation and demonstration
on the floor, as well as installation
and service. The consumers will
seek out the local expert as our business
gets more complex, and they know that
won’t get any sort of expertise on the
floor of a Walmart.

Dennis Holzer, executive director,
PowerHouse Alliance:
We don’t
believe Walmart’s renewed emphasis
will change our business or strategy.
Our customers, predominantly installers,
provide solutions to customers.
Our customer’s customer, while value conscious, does not want to buy and
pickup a TV, or select individual components
and all the accessories to bring
it home and install in on their own.

They want it all offered, delivered, installed
and ready to go when they get
home. They are willing to pay a slight
premium to have this all done for them.

Fred Towns, sales and marketing senior
VP, New Age Electronics:
Walmart
has brought more awareness to the market
by carrying a tier-one product line.
This allows competing retailers to off er
a more holistic solution to best service
the consumer.

Jeff Davis, sales senior VP at D&H
Distributing:
It’s always good when a
large retailer such as Walmart emphasizes
a category. It raises awareness of
those technologies for everyone. Our dealers and resellers are accustomed to
competing with all forms of big box retailers.
That’s where value-added services
come into play.

Warren Chaiken, president/COO, Almo:
Walmart’s CE resurgence is challenging.
However, the smaller retailers competed
on service, not just price. Local and regional
CE retailers need to focus on consumers
interested in quality, service and
relationships, differentiating themselves
with feature-laden products and very
well-trained, helpful sales personnel.


David Kaplan, executive director,
Digital Delivery Group:
Walmart is a
fierce competitor with a loyal customer
base. It remains to be seen how their
emphasis on CE (and install services)
affects our channel. On the whole,
while they represent a significant and
growing share of CE revenue, I think
they sell to a different customer than
the clients of our independent custom
integrator dealer base.

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