Walmart Expanding Test Of In-Store Wireless Shops

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Walmart is planning to expand its test of in-store mobile specialty shops to a total of 350 supercenters this year.

The in-house pilot was launched in 200 stores last fall and will be extended to an additional 150 locations this year.

Located at the front of the discounter’s big-box flagships, the Walmart Wireless stores are about 2,000 square feet in size and offer a select assortment of smartphones, cellphones and pre-, post-paid and hybrid service plans, including Walmart’s exclusive Common Cents and Family Mobile pay-as-you-go products. Tablet computers are not yet part of the mix.

Gary Severson, home entertainment senior VP for Walmart U.S., said the specialty stores provide customers with greater plan and product assistance, more privacy, and a better overall shopping experience. He said initial results have been “very positive.”

Severson noted that unlike other freestanding mobile spin-offs in the marketplace, the Walmart Wireless shops are located within the parent chain, alongside eyeglass, banking and other front-of-the-store services, due to the high volume of traffic that its supercenters draw, Severson said.

“The reason that some companies have created standalone stores is a lack of traffic,” he noted. “We have a lot of good traffic. So this is our version of a standalone store – within our own stores.”

The shops join a crowded marketplace of freestanding wireless specialty stores that includes thousands of carrier and agent outlets and the burgeoning Best Buy Mobile chain. The latter will double its store count to over 300 locations this year in addition to in-store departments within all its big-box flagships, and could have an estimated 600 to 800 freestanding stores in place by 2016, the retailer said.

Nevertheless, Walmart sees its standalone stores as a further opportunity beyond its entertainment departments and e-commerce site to tap into explosive demand for smartphones, accessories and data plans, which are among the fastest-growing segments in CE. Indeed, The NPD Group said smartphones represented 50 percent of new handset volume in the fourth quarter of 2010, from 31 percent the year prior, while mobile phone accessory revenue grew 18 percent last year to $1.2 billion.

Even still the category remains underpenetrated, said NPD industry analysis VP Stephen Baker, and despite brick-and-mortar competition, the standalone retail model “supports lots and lots of locations.”

The specialty format also addresses what Baker sees as Walmart’s greatest CE challenge: growth in mobile. “The category requires more sales assistance and another level of merchandising,” he said. “Prepaid phones are a graband- go business, but subscriptions require employee labor.”

Walmart has utilized its front-of-the store retail space for tests of numerous leased and in-house concepts, including computer repair shops, pre-owned video game exchanges, and more recently, a revived appliance pilot with GE


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