Wal-Mart is going wide on digital TV.
As reported first on TWICE.com, the world's largest retailer is preparing to roll out an assortment of high-definition and HD-ready sets to 1,500 stores, following tests of HD plasma and rear-projection monitors in at least two Wal-Mart units in Arkansas and Florida.
The selection will likely include four rear-projection monitors from Philips and Thomson. Two HD plasma display panels (PDP) from Sanyo were included in a test marketing exercise at a store in West Palm Beach, Fla., and a store near a Sanyo plant in Forest City, Ark.
Wal-Mart would neither confirm nor deny the rollout, but a source familiar with the plan told TWICE that preparations for the installations are currently underway. The units will be sold in more than half of the chain's 2,700 discount stores and supercenters.
The HD array is already in place at Wal-Mart's Rogers, Ark., supercenter, whose reconfigured CE department may serve as a template for the launch. According to
retail analyst Aram Rubinson of Banc of America Securities, who recently visited the store, the assortment includes Sanyo's 32-inch and 42-inch PDPs, which are ticketed at $3,968 and $5,968, respectively.
Among the rear projection units, the store is carrying a 52-inch RCA model for $1,688 and three Philips SKUs: a 43-inch for $1,584, a 46-inch for $1,654, and a 50-inch for $1,772.
The store is also stocking an analog rear projection model and two direct-view digital TVs: a 32-inch Philips and a 36-inch RCA that are both retailing for $1,292.
Bob Nocera, Philips digital television marketing VP, acknowledged that Wal-Mart is carrying two of his company's 4:3 rear projection HDTV monitors in the 43- and 50-inch screen sizes, and is "experimenting" with other Philips models including some direct-view CRT DTV monitors in select locations.
Nocera said he was unaware of any service or delivery programs that Wal-Mart was offering to support the line at this time, adding that at least initially DTV sets were sold on "a cash and carry" basis.
"They seem to be taking HDTV seriously and are rolling out a high-definition signal to display models in a lot of their stores," he continued. "If you look at where the market is going, particularly in projection TV, analog has a limited lifetime. In a couple of years, basically all projection TV is going to be at least digital ready.
Nocera said Wal-Mart's pricing structure has been "competitive with everyone else," and not unusually low.
Wal-Mart is testing some widescreen displays (including the Sanyo PDPs) in select stores, Nocera added, but the Philips program thus far has been limited to models with conventional 4:3 screen sizes.
"Right now, as there is still a little gap in 4:3 and widescreen pricing — especially in picture tube products — the 4:3 models have a little more of a mass appeal," he said. "But especially in projection TV, I can see that changing in the next couple of years."
Rubinson said the CE department in the Rogers, Ark. store is about 40 percent larger than that of a typical Wal-Mart supercenter, lending it a "more open and accessible" look.
Wal-Mart's move into high-end TV follows Sears' rollout of plasma and LCD panels to more than 650 stores last month. While Wal-Mart's initial test store retails are in line with average street prices, industry observers are concerned that its entry into the high-margin category could ultimately prove disruptive.
Bill Trawick, president and executive director of the NATM Buying Corp., said the complexities of selling HDTV, are more readily managed by CE dealers than discount chains.
"It's not a cash and carry item," Trawick noted. "It's not like buying a 13-inch TV. I think Wal-Mart will have some issues selling that product."