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