Walmart Goes For Style, Not Specs, In Headphones - Twice

Walmart Goes For Style, Not Specs, In Headphones

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NEW YORK - Walmart aims to cover almost all its bases in accessories - just not the high-end ones.

Although product selection varied by location, our walkthroughs showed an ample variety of CE accessories, but a much less varied SKU set. With the exception of flat-panel TV mounts, the selection of products above the $99.99 mark was few and far between.

Walmart's technique of handling accessories is perhaps best exemplified by its headphones selection. Our walkthroughs showed products from many of the big players in headphones - Philips, JVC, Sony and Koss - but noticeably absent were such higher-end names as Sennheiser, Shure and Monster (although you can find Sennheiser and Monster products at Walmart.com).

Colors played a prominent role in headphones and earphones, with a vibrant array of JVC Gumy ($9) and Marshmallow buds ($19) to pair with any possible color MP3 player. Although extremely low-end models, the multicolored ear buds were arranged prominently and proved to be a striking display with no shortage of availability.

David Rubin, headphone product manager of Maxell, told TWICE, "With the realignment of the CE department and a renewed focus on the category, Walmart has had a major positive impact on the headphone category. The growth and success can be attributed to a strategically selected assortment, which focuses on popular price point models in a wide range of colors and styles." 

Rubin added, "The realignment has allowed for increased shelf space dedicated to the growing headphone category. For continued growth, and in order to keep the category fresh and exciting, it would be beneficial to add headphones with new on-trend colors, different styles and unique functionality on a regular basis." 

While Walmart.com offered a pair of Sony over-ear headphones for $349, the most high-end SKU we saw in-store was a set of RCA wireless headphones for $49.88 (although they weren't in stock at the time).

Most of the manufacturers interviewed by TWICE agreed that Walmart's customer isn't interested in the above-$99 price point product.

"People who shop at Walmart are bargain hunters - they're not loyal, they're just looking for the lowest price," said a product manager at a leading headphones manufacturer. "We don't find our loyal users seeking our products. Our customers don't usually shop there for headphones. But there are manufacturers whose business model fits well - Skullcandy is a good one. They spend a lot of time worrying about design and color and packaging [because they don't affect the price as much].

Stephen Baker, industry analysis VP at The NPD Group, concurred:  "That's not their customer. On occasion they might be interested in testing those products. In general, they haven't gone over that $50 price range. TV remotes come to mind as well - they're very successful with the entry levels, but when they go above $50, that's not a very good place to be. Accessories in general - they tend to be pretty focused on the entry-level and not so much on the step-up."

When asked if Walmart planned to expand into higher-end headphones (above the $50 mark), Kevin O'Connor, Walmart CE VP, told TWICE, "We carry more expensive headphones, over $50, today. The customer determines what we should have in the stores. They want great products, but at a value. If they determine that a $99 item is a great value, they will purchase it."

Its avoidance of the higher-end headphones is generally seen as a wise strategy. High-end audio means a need for an assisted sell to explain the technology - something Walmart doesn't participate in.

"They wouldn't want to get into the higher-tiered pro audio market," said the headphones product manager. "That just completely violates Walmart's business model. $300 headphones - those are things that sit on the shelf for a while. The further upmarket you go, the more you need to leverage an assisted sell. You need to be able to provide a high product margin or you give the seller a spiff.

"If Walmart wanted to get into pro audio, they would need to educate their employees and offer some kind of incentive program, which I know they would never do because it completely goes against their business model," he added.     

NPD's Baker noted, "As they start to upgrade their MP3 player market or TVs or [other core categories], I think there's opportunities to maybe try again in some of those higher-priced points as they upgrade the entire department."

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