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Walmart Attempts To Broaden Computer Selection

6/07/2010 09:07:00 AM Eastern

COMMACK, N.Y. - Walmart's computer section may never be confused
with what Best Buy delivers, but the mass merchant's attempt to broaden its
selection and overall appearance is on the upswing.

The Project Impact stores are geared toward improved
demonstration and merchandising areas, but few of the chain's 3,500 U.S.
locations have so far been so upgraded.

The typical Walmart is dedicating, on the average, about 25 feet
of shelf space in the CE section to computers, peripherals and accessories. The
stores are carrying the major notebook brands: Dell, Toshiba, Hewlett-Packard
and Sony. On the desktop side, the selection ranges from Dell to eMachines,
with the majority of the items in the low- to midprice ranges.

The laptops are kept sealed under glass for viewing, while the
desktops

remained boxed in many locations. This is changing under the new
format, with each store increasing its SKU count and making the units more
accessible to the customers.

"Project Impact is helping Walmart portray itself as more
robustly involved in the PC business," said Stephen Baker, industry analysis VP
for The NPD Group.

In general, "moms" are Walmart's primary cutstomer, said Kevin
O'Connor, Walmart's consumer electronics VP. While they are drawn to the store
because of the general product assortment offered, Walmart makes an effort to
present PC products to them in a manner befitting a mom, he said.

O'Connor said the stores carry laptops with prices ranging from
entry level to the $800 to $900 price range.

The desktops available tend to be more moderately priced,
although at least one PC vendor believed Walmart could go with more upscale
desktops.

Lance McCullough, Dell's product group consumer product planner,
was impressed with how the chain is constantly attempting to improve its PC
assortment, and he thought there could be a market for models like Dells latest
AMD six-core powered XPS desktops in the store.

Walmart does not carry Apple computers, although it has a full
slate of iPhone and iPods.

"We have no Macs. That's Apple's decision. We have a good
relationship with Apple, and carry iPhone and iPod, but Apple is not interested
in selling Macs to us," said O'Connor.

Walmart is very interested to see how other portable computer
devices, like netbooks and e-book readers, sell in its stores.

"We will play in all technologies and let the customer vote. I
have no idea how that will play out, but it will be interesting to watch,"
O'Connor said.

However, just adding more merchandise and not making other
changes in how it sells does not mean it can seriously compete with Best Buy
and Fry's, said Baker.

He pointed out that the CE chains heavily advertise their
computer products, something Walmart has so far refrained from. Additionally,
Baker believes the typical Walmart shopper probably needs some level of
floor-level assistance, which they will not receive in a typical Walmart
environment.

This could prove particularly troublesome for those shopping for
the home networking and storage products Walmart carries.

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