Madden 2013 Walmart Style

This coming Monday night, Walmart gaming departments will be running a Madden '13 tournament in their 2500+ locations across the country that are open 24 hours.

Tournaments are slated to begin on Monday evening, August 27th at 9 p.m. From what employees are saying customers will be playing each other with the ultimate winner receiving a copy of Madden NFL 13 for their efforts.

Some Walmart locations are doing things a little differently. In the picture on the right, this location is having a Triva contest with 13 questions. From those contestant who get all questions answered correctly  a drawing will be held with four prizes being awarded

1. Grand Prize Winner receives a copy of Madden NFL 13
2. First price is  a Wilson NFL Football
3. Second Prize is a backyard grill with Gridiron Tool set
4. Third prize is a Tailgating bean bag toss

Walmart claims to be a leader in new releases in entertainment, it will be interesting to see what the customer response is for this title.

TV's Made in America?

Minneapolis based Element Electronics this past January announced that they would begin assembling larger screen TVs in a plant outside of Detroit with production slated to begin in March.

The first of these "American" made TVs started showing up in Target stores in early July from what I recall. However, this past week Walmart stores began featuring this product out in the aisles of select stores in Michigan.

Check out the flags around the sign holder and the red, white and blue Flag scheme on the TV box with the tagline, "America Matters." While this packaging may seem ironic for a retailer that brings in so many of its products from Asia, it does address a part of Walmart's pledge to use local sourcing when it is possible.

While some customers may find this appealing that a TV is being made in the US again (the last US built TVs were back in the late 80s early 90s), Walmart employees do not express high praise for these products.

Target Say's Me Too to Larger TV's

While Walmart has made the most noise since this last spring with its assortment changes in TVs, number two mass merchant Target is doing some of its own as well.

At the right is a picture of a 70" Sharp LED (backlight) TV at a Target store in Lansing, Michigan. 70" TV's are common at the likes of specialty electronics retailers like Best Buy, Fry's, hhgregg and BrandsMartUSA. While one can even find these at the clubs, it was only this past April that Walmart added 70" TVs as an all store item.

Why is this such a big deal for Target? Look at the in store selection of TVs there and you will see that their typical assortment is 50- 75% of a typical Walmart. While the space this will take up is a big investment, having the Beast from Bentonville (AR) be ahead of them may simply be too much to bear.

Walmart Adds More Entertainment

Wow, it's been far too long since the last post and there is a lot going on, shame on me.

Over the last year, Walmart has been increasing comp sales, driving more traffic and seeing a rather interesting run up in their stock price. One of the main drives of this success according to Walmart's top brass is the addition of nearly 10,000 products back into the store assortment.

While most of the past year this expansion has been observed mostly in food, the entertainment department is now getting its fair share of new and added products showing up.

In the example at right, one can see the updated networking area for this retailer. What's been reduced? The number of wired Ethernet cables which used to be totally Belkin"ized". In their place are private label ONN wired networking products (the power of higher margins from the company's' global sourcing initiative) and more wireless routers.

Over last year, the assortment of wireless product has nearly doubled with more SKU's from Belkin, Netgear and Cisco. Additions for this year include wireless range extenders from Netgear and Cisco.

Want to see another quick example, pop over to the section that has computer mice as that assortment has more than doubled with the addition of Dark Field laser (Logitech, $49) and mice that can be used as scanners ($99).

hhgregg Gets Apple

The Sign Says it All

Up until very recently, hhgregg has not been a source for Apple products. This has been something the company has been coveting as it gives them two immediate benefits. First, existing customers will now be able to get access to this desirable brand that previously required them to shop elsewhere. Second, it gives hhgregg access to new customers who would not have considered shopping the company without this product

iPad Now Available

As part of this limited rollout, hhgregg will have 25 stores that will be displaying iPods, iPad’s and iPhones. iPhones are not particularly new to the mix as they have been available to customers through the Verizon Wireless Kiosks inside hhgregg stores through the company’s partnership with TCC.

If the number 25 sounds familiar, it is the same number that Apple is allowing for Target and Walmart to have expanded Apple departments in their stores. Makes one think that Apple is looking to make the distribution of its mainstream product product wider and more available to a wider range of customers.

As one can see, the display fixtures used for this rollout are basic and simpler than one would typically find at other retailers such as Walmart or Target.

Accessories

Besides end cap displays, hhgregg has 16 feet dedicated for Apple branded accessories to support these products

What’s the benefit to hhgregg? Management has stated that the company is pivoting away from using TV as a traffic driver while looking to tablets as the key to bringing more customers into the store more often as tablet and computer customers tend to buy more frequently.

What’s the future of this program? According to management, if they can make this new relationship with Apple work and are able to expand it chain wide, the company could then be considered for other Apple products when they are announced. Say for instance, Apple TV.

Walmart's Spider-Man Unmasked Tour

Some come dressed as Spider-Man

With the latest reboot of the Spiderman franchise coming on July 3^rd, Walmart is once again setting itself up as the destination location for anything under the sun related to Spidey. While that may be a bit of an overstatement, this competitor will have almost 1000 items related to the release of this movie for sale in their stores (a typical Walmart location carries anywhere from 120,000 – 140,000 items). What’s the big difference between the effort for this release and the Avengers, back in May? Walmart is aiming this promotion at its core customer, mothers and her family.

To support this promotion in advance of this release Walmart is hosting at stores across the country, the Amazing Spider-Man Secrets Unmasked tour sponsored by Sony. As the tour moves from location to location, families can get their picture taken in a Spider-Man mask and get a free 5 x 7 at the Walmart photo center of the store they are visiting.

Family Spidey Photo Op

 Kids of all ages can play the Sony PS3 game in advance of its launch on June 26^th at the interactive Sony game kiosk under the canopy. In addition, everyone receives a Bonkazonk from Hasbro as well as Rice Krispie treats and Cheez-It snacks. Of course what would a children’s oriented event be without temporary tattoo’s which were available for kids of all ages (none for me, thank you).

The surprise part (for me) of the promotion was how there were brochures touting the advantages of Straight Talk, Walmart’s exclusive  pay as you go cell phone service that called out how customers can save up to ½ off their cell phone bills each month

What I found amazing (pun attended) was how well customers responded to this promotion. In one of the photos I took, one of the children attending was dressed up as Spider-Man.

Exclusive Movie Scene Showing

To get customers back into the store (besides the free photo), Walmart via Sony offered a never before scene from the upcoming movie that was played in their electronics department on June 15^th and 16^th at 4 times as well a comic book reproduction for $2.96 including a DVD sneak peek.

Stay tuned for more details as the full merchandising promotion kicks in and the rest of those 1000 items come in...

hhgregg Updates HT Installation

hhgregg’s strength has always been in appliances and in the installation services that are often needed for those products. Home Theater installation is another matter entirely from this observers view. While this company has offered installation services in TV’s for the last few years finding anyone in store who would recommend or sell these types of services was something a customer would hear only on very rare occasions. This lack of execution started to change in the fall of 2011.

In the fall of 2011, hhgregg sales associates began recommending a form of in home consultation, where a representative would come to your home for $99 and perform in home assessment of the customer needs. If the customer made a purchase from this in home consultation, the fee would be returned to the customer. The only supporting documentation for the various installation services that were offered at the time could be found only in a brochure in limited locations.

Fast forward to the last few weeks and one would notice that installation services are now top of mind to this company. In store, more associates are talking about the various packages that customers can now purchase to give a complete home theater solution along with supporting Point of Purchase signage. The first service that associates talk about are the various options for mounting a new flat panel from Basic to Deluxe packages for TV’s of all size ranges.

For customers looking for the best picture possible, hhgregg offers Spyder TV calibration which also includes a review of the customers sound system and remote control review. Why just a review? If the customer is investing in a calibration of their new TV, getting a new sound system and a programmable universal remote would be only a recommendation away while the technician is in the customer’s home. Additional services like IPTV or 3D TV setup can be purchased for an additional $49 for customers who purchased one of the other services.

One of the causes for the needed change is due to declining Average Selling Prices as well as Gross Margins in the Home Theater category. Also, hhgregg as part of their FY’12 strategy focused more on smaller screen TV’s to drive customers into the stores in order to gain market share. While the desired market share gains occurred according to hhgregg management, those gains came at a cost of gross margin reduction and ultimately profits. As the company shifts its FY’13 strategy to an emphasis on selling larger screen TV’s (think 60” and above), sales of installation services are one of the complimentary services that this company will use to drive additional revenue and profits.