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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.”