ENGLEWOOD CLIFFS, N.J.
— Deviating from a distribution
course that had sought
out only dealers
with directed
sales floors with
the ability to sell
premium products and new
technologies, LG Electronics
opened up segments of its
television lines last month to
discount giant Walmart and
sister company Sam’s Club.
The move follows a prior
involvement over the last
year with the Costco warehouse
club chain.
The expansion into the
leading mass-merchant chain
was viewed by some independent
and specialty dealers in
confidential discussions as
yet another defection of a
sheltered television line to
a high-volume competitor whose pricing policies have made it difficult for smaller dealers, many of whom do
a substantial portion of the industry’s educational
heavy lifting, to compete.
In an exclusive interview with TWICE,
John Herrington, LG Electronics’ U.S.
sales president, explained the decision
as a necessary step in following the purchasing
practices of consumers.
“We have been evaluating on an ongoing
basis our distribution and as
we’ve made signifi cant investments in
the brand and have looked at the competitive
landscape. We wanted to make
sure that our brand is available where
consumers are shopping,” Herrington
explained. “So, in the fall of last year we
began discussions with Walmart in an
effort to make our brand more available
to consumers out there and we have
rolled out with them.”
Herrington said Walmart is carrying
an assortment of televisions limited to
six LG LCD TV models, a Blu-ray Disc
player and a Blu-ray home-theater system
“at present.”
The televisions range in screen size
from 27 to 65 inches, most using CCFL
backlighting, but Herrington said “a
smaller assortment of stores will have
LED-backlit products in 47- and 55-inch
screen sizes as well.”
LG worked with Walmart in determining
the best locations “to work with the
newer LED technology,” he said.
Most of Walmart’s LG models are from
the core product line, and are not special
derivative SKUs — a practice some manufacturers,
including rival Samsung,
have taken in expanding distribution to
mass-merchant and warehouse-club
partners to discourage model-for-model
price comparisons.
“We believe we have many solutions
for all of our customers, and we are introducing
this year a comprehensive line
with many more models than ever before,
right now, and a lot of great new designs
and new technology,” Herrington said.
“We think the line is suffi ciently broad for
all of our customers to be profitable and
to do a bunch of business with.”
Asked if LG would make its new topof-
the-line Full LED Slim ultra-thin fullarray
backlit LED LCDs available exclusively
to directed sales floor accounts,
Herrington said: “I’d rather not talk
about what our placement plans are for
our future technologies, but suffice it
to say that specialty retailers are more
likely to be successful with a product
like that.”
Regarding 3D TV sets, which have
been in short supply from all participating
manufacturers this year, Herrington
said: “We are currently not in the market
with our 3D product, but our intention
is to have that available to all of our
retailers.”
As for any changes that may be afoot
in its co-op advertising programs for
Walmart and other dealers, Herrington
said, “Suffice it to say that we are working
with each of our retailers to drive
the business. We think we have a very
unique opportunity in the marketplace
right now with the investments we’ve
made in the product line and the excitement
around the brand, so we’re continuing
to invest with our retailers as we
have in the past to drive the business
and grow our share.”
“We are in the middle of launching a
new television [advertising] creative for
3D and other technologies, including our
Full LED Slim product, and that will be
launching soon in support of the rollout
of our televisions in the coming months.
We currently do not have a plan to tag our
national advertising with any retailers.”
In the past, the Korean parent of LG
Electronics has stated its goal to be a
global top-five market share brand in all
the categories in which it competes (LG
is No. 2 worldwide in TV market share,
according to DisplaySearch.) As for
any goals expected from the move into
Walmart, Herrington said, “It’s to grow
share significantly, and we think we’re
well positioned to do that this year.”
Herrington said that while Walmart
and Sam’s Club are new to LG’s distribution
network, the company has no immediate
plans to add additional chains.
“We are always looking at options.
Right now we are pleased with our distribution,
but that’s not to say that we
are not continually going to look at retail
options that put our brand before more
consumers that make sense for us, but
nothing is imminent as we speak.”
LG TV USED TO
PREMIERE MOVIE
AT FILM FESTIVAL
NEW YORK — For the first time
in the festival’s history, the Tribeca
Film Festival premiered a feature
fi lm, “Keep Surfing,” on a
TV — LG Electronics’ new Infinia
LED high-definition televisions.
Pictured above are Jamie-Lynn
Sigler, who hosted the screening
with Tim Alessi, product development
director of LG Electronics,
and a celebrity guest, New
York Jets quarterback Mark Sanchez.
For more on the premiere and the LG TV, visit
.
