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Distributors Voice Mixed Views On Walmart's Plans, Practices

6/07/2010 09:08:00 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 (see story on p. 30) 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 offer 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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