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Walmart Expanding Online Component-Audio Selection

6/07/2010 09:14:00 AM Eastern
BENTONVILLE, ARK. - Walmart.com expanded its online selection to include component audio about a year ago, suppliers told , and more component brands are on the way.

Many of the component-audio products hail from audio specialty suppliers, and as of early June, their products included component in-room speakers up to $1,999 each, turntables, a stereo receiver, an HD Radio tuner, an in-wall speaker and multiple outdoor speakers. AVRs were priced up to $278.

Brands represented on the site included BIC, Cerwin-Vega, HiFi Works, Klipsch, Numark, OSD Audio, Pinnacle,  Sangean,  Sony and Teac. Wireless speakers were available from Acoustic Research, Mutant Audio, OSD Audio and Cables Unlimited.

All of the products werTWICEe available for shipment direct to a consumer's home, or they could be shipped free to a nearby Walmart store for pickup seven to 10 days after ordering. None of the products was available on store shelves.

In coming weeks, the component selection will expand further with the addition of components and other home audio products from audio-specialty supplier Onkyo, whose lineup will include five A/V receivers, two home-theater receiver/speaker packages, two home-theater speaker packages, and a 2.1-speaker virtual surround system with A/V receiver embedded in the subwoofer. A mini system and iPod dock accessory are also planned. All Onkyo A/V receivers and home-theater systems sold through Walmart.com will be priced below $499, and none was to be shipped to Walmart stores for customer pickup.

Other audio specialty brands could be on the way. Onkyo national sales manager Joe Petrillo commented in an email to sales reps and key accounts, "Our competitors are and have been in negotiation with Walmart.com as well."

Another audio specialty supplier summed up the appeal this way: "It might not pop into people's minds to go to Walmart for speakers, but if they are on Walmart.com buying a TV and run across component audio, they're making those purchases." Consumers, he added, "have gotten very comfortable buying audio online," particularly if they have "trust in the site as a brand that will be around."

Onkyo foresaw multiple benefits to bringing 12 products, some of them derivatives, to Walmart.com.  In his email, Onkyo's Petrillo contended the new distribution channel will expose the brand to more consumers and drive many of them to other authorized online and brick-and-mortar dealers to buy step-up Onkyo products.

Also in his email, Petrillo contended the relationship would not dilute the value of the Onkyo brand, nor would it create channel conflicts.

"Based on the current average assortment of our key account partners, I don't feel that the models selected will create a conflict," he said. "Instead, I believe it provides you with a very solid step strategy."

The new distribution channel won't dilute the value of the Onkyo brand, he added, because "a ‘brand' loses its prestige in the marketplace when the products being produced are compromised from a build quality standpoint, no longer offer any demonstrable benefits vs. the competition, and lastly carry no ‘real' perceived value to the consumer. None of these circumstances are present here."

Not all component-audio products sold on the site, however, are actually sold by Walmart, several suppliers said. In some cases, the product is supplied by a third-party online retailer, they said.

Whether component audio will eventually come to Walmart's brick-and-mortar shelves, however, is another story. "We will watch what's selling at the clubs [Sam's Club] and atWalmart.com, and we'll let the customer decide whether we will bring component audio into the stores," CE VP Kevin O'Connor told TWICE.

In its early June online selection, Walmart offered three Sony and Teac A/V receivers up to $278, a Sony stereo receiver, Sangean's component HD Radio tuner at $198 and a Numark CD player at $199 The site's selection of 49 component speakers included in-room floor standing and shelf speakers from Sony, Klipsch, Cerwin-Vega, Pinnacle and BIC up to $1,999 each (not per pair) for Cerwin-Vega towers with built-in powered subwoofers. Klipsch offered a $149-each tower speaker on rollback, though it is normally sold for $274, the Web site said.

The speaker selection also includes wireless speakers from Acoustic Research, Mutant, and OSD Audio; outdoor speakers from OSD, Cables Unlimited and HiFi Works; and a BIC in-wall speaker.

The site also offered multiple turntables, but all were either designed for DJ use or for converting vinyl records to MP3 files or to recordable audio CDs.
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