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Sam's Club Promises Flexibility In Wireless Products

7/05/2011 12:01:00 AM Eastern
BENTONVILLE, ARK. — Sam’s Club will be able to offer a more flexible assortment of cellphones, tablets and other mobile products to meet local market needs now that it is bringing its cellular merchandising operations in-house in all stores, a Sam’s Club executive told TWICE.

For some time, the warehouse club operated cellular kiosks in about 100 of its 599 U.S. stores, and it began in April to take over the operation of RadioShack- operated kiosks in its remaining 494 stores with kiosks. That transition will be complete this week, said Huey Long, technical services senior VP.

With the change, Sam’s Club is joining a growing club of major retailers that have become increasingly aggressive in a market dominated by carrier-direct sales to consumers. As a result, the indirect channel’s share of the cellular market has grown -- however slightly -- in recent years, marketers and analysts say. About a fourth of U.S. handset sell-through in 2010 went through non-carrier-owned brick-and-mortar stores, according to Strategy Analytics, which estimates that share will grow to a third in 2015.

To succeed in a carrier-dominated market, major retailers are leveraging foot traffic that exceeds carrier-store traffic, promoting their ability to offer unbiased advice because they offer the services of multiple carriers, and banking on rising technologydriven handset replacement rates to generate sales growth.

To this mix, Sam’s Club is adding its newfound ability to build its cellular share by assorting its kiosks to meet local market demand.

Also as part of its cellular strategy, the company is staffing the kiosks with sales associates specially trained in selling wireless, Long said. Around 1,500 associates have just completed their training to staff the new in-house kiosks and help provide “knowledgeable solutions” to consumers, Long said. Wireless, he noted, “requires the most conversation” with consumers compared to other products sold in the clubs. “Members want engagement” in wireless, he said. “They want to understand the differences in smartphone platforms.”

Although the “primary focus” of the wireless specialists “is on wireless and mobility,” they will also help shoppers of other products as part of their mission to be “helpful and friendly,” he noted.

Consumers shopping for other types of electronics also need knowledgeable assistance, he noted, and for that reason, Sam’s placed specially trained technology experts in all of its stores more than a year ago.

In another change, Sam’s is rolling out the displays that it used in its original 100 owned-and-operated kiosks to all of its stores. The displays are lower so associates can engage club members, Long explained. Associates are trained to do demos and activate the phones. Sam’s Club facilitates mobile demos by offering in-building Wi-Fi service, he added.

The kiosks range in size from 80 to 100 square feet depending on location.

To generate awareness of its cellular capabilities, Sam’s Club is banking on the high volumes of daily traffic from consumers who enter the store to shop for their everyday needs. “Our everyday-needs members generate traffic that’s greater than most advertising can produce,” Long noted.

Like before, all stores offer the services of all four major national carriers, but that could always change if members want additional options, Long said. The stores continue to offer a mix of postpaid and prepaid phones. As for any plans to become an MVNO that re-sells service under its own brand name, Long said, “We always listen to members.”

For that reason, Sam’s brought wireless in-house even though the business is more challenging than ever, given the proliferation of service plans, phones and smartphone platforms, but Long said, “We viewed it as a solution that members needed.”

To date, he added, “we’re pleased with the way it’s working out.”
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