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Walmart Expands Test Of In-Store Majap Shops


Walmart is expanding its test of instore
GE appliance shops to upwards of 26 discount
supercenters by July.

The shops, dubbed The Appliance Market at
Walmart, were initially installed in three Texas
locations and are being rolled out to Walmart
stores throughout the Houston and Dallas/Fort
Worth markets.

The shops range from 700 square feet to 900
square feet in size, and carry between 50 and
80 good-better-best GE refrigerators, freezers,
dishwashers, ranges, over-the-range microwave
ovens and laundry pairs under the manufacturer’s
Hotpoint, GE and GE Profile brands, Walmart
told TWICE.

According to Ken Holland, GE
Appliance’s general manager
for sales at Walmart and Sam’s
Club, the discounter will carry
little backroom inventory, and all
fulfillment will be handled by GE
and its network of local delivery

The front-of-the-store shops
are owned by Walmart but are
staffed by Flexi Compras, a Southwestern CE, appliance,
furniture and auto chain that also provides
in-store services to Best Buy and Albertson’s. The
company will offer customers lease-to-own and
other flexible payment plans, and shoppers can also
choose from nearly 900 hundred additional SKUs
through a catalog. All deliveries
are free, although installation and
haul-away services are extra for
all but lease-to-own purchases.

The pilot represents the second
appliance foray for Walmart and GE, which first
trialed a front-of-the-store program in 2000.

“The previous test had some successful elements
and showed that we could make our products accessible
to a broad array of Walmart’s customer base,”
Holland said. “The timing was just wasn’t right.”

The current effort differs in its better sales expertise,
larger assortment and alternate financing options
for cash-poor customers with low or no credit, a
Walmart spokesman told TWICE. The chain has not
yet determined whether it will add other manufacturers’
brands to the assortment, he said.

Holland noted that GE and Walmart have maintained
a longstanding partnership that includes
room air, microwave ovens and lighting, and described
major appliances as a “natural opportunity”
to grow the relationship. Long-term strategic discussions
have been ongoing, he said, and specific
talks about the viability of combining Walmart’s
customer base with GE major appliances began
about nine months ago.

The current test will determine whether the program
will be regional or national in focus, and can be
applied to other formats. “They see it as a substantial
opportunity for them,” Holland said. “Proper distribution
provides the end-user with the opportunity to find
the right product with the right features.”

Meanwhile, independent dealers and buying group
executives have expressed grave concerns over the
appliance pilot, including BrandSource CEO Bob
Lawrence. “Walmart has decimated margin on the
CE side and recently reaffirmed its commitment to
everday-low-pricing [EDLP]. This is not good for independent
dealers or the appliance industry,” he said.

But David Trahan, retail president of Conn’s, the
Texas-based appliance, furniture and CE chain,
seemed less alarmed.

“It’s not the first test, and the product selection and
credit offering is not that competitive with our offerings,”
he told analysts during a first-quarter earnings
calls last month. “Certainly we are concerned about
any new competitor in the market, but the competition
they represent is certainly something we can
compete with.”