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.

iPhone Comes to hhgregg

iPhone Comes to hhgregg

Check out this new product roll out by regional retailer hhgregg. Over the last couple of years this company has made steady progress in developing this category that previously was not a focus.

While another retailer carrying the iPhone is not in itself breaking news, it is significant for hhgregg.

Why significant? It's all about driving traffic. According to hhgregg management comments, customers who buy wireless and other home office products do so more frequently than other product categories like Appliances (hhgregg's strength) and Home Theater. Given that appliance customers buy every 8 years, having products like the iPhone will get that customer back into the store more often.

As to new customers, addition of the iPhone can attract new customers who may not have considered hhgregg in the past.


As to results, hhgregg reported a 91% comp increase in the Home Office category  for the latest quarter results ending December 31st.

New iPad Online at Walmart.com

This past Friday, Apple launched their latest version of the iPad. The number of competitors offering this unit continues to grow as do the crowds who snatch up the latest must have tablets from Cupertino.

Walmart.com offered iPads on Launch Day

What was different for this launch were the number of outlets who offered the unit for sale online. Customers going to Bestbuy.com or Target.com were directed to go to the retail stores to make their purchase. From what I could see, outside of Apple and eBay the only other place one could buy a new iPad online on launch day was at Walmart.com.

Early on Friday morning at 7:30 a.m. eastern time, Walmart.com was offering three models of the new iPad

1. 16 GB White Wi-Fi 
2. 32 GB Black Wi-Fi
3. 16 GB Black Wi-Fi + 4G

Customers who ordered these units were not offered the typical array of accessories that one would expect as part of an online sale. What was offered is a 2 year Drop, Spill and Broken Screen Protection Plan for iPads for $79. Customers who choose not to add this coverage do have the ability to add this item up to 30 days after purchase. The service plan is provided by Asurion Service Plans out of Chicago.

As to delivery, units ordered on Friday the 16th may be available for pick up at the Walmart location the customer has chosen as part of the order process as early as Friday, March 23rd which is typical for orders using Site to Store.

Look for more updates as to how Walmart fulfills this order....

Sam's Self Checkout Review

Here one can see one of the new self checkout kiosks at Sam's Club in Washington, Pa. (One of 80 locations currently using this system)

Up to now, self checkout in a club setting has been found only at Costco.

At Costco when you  use their system, the process begins with an optical scan of the bar code on the back of your card. This can be problematic if your card has any wear on it.

Next, after scanning an item, Costco requires the member to place the item on a moving belt that weighs the item to ensure what the customer scans is what is actually being put on the belt. The problem with this system is that it is error prone when matching the weight to the bar code so one end up having to wait for a Costco team member to come over to your flashing light above the check stand to override the item.

In the end, it is easier to have a Costco employee ring up the sale at a full serve register.

The Sams's self checkout is a simpler, less problematic process.

First, the member slides their membership card through the same reader that does credit cards. This is a more reliable system than Costco's optical system.

Second, the member takes the wireless handheld scanner as seen in the picture and scans the items in their cart.  This is significantly faster than Costco as their is no requirement of placing the item on a moving belt.

Paying for the purchase is the same at both clubs. Like Costco, members who use self checkout receive a blue colored receipt. Wonder if this signals extra scrutiny at the door from the receipt checker?

Feedback from Sam's employees indicates this area is busiest on weekends with customers able to zip though checkout using this new system. Employees also volunteered that comments from customers were very positive..

What's the future of this system? According to Charles Holley of Walmart, (via Bank of America Merrill Lynch Consumer & Retail Conference) this system will be added to another 220 Sam's locations by the end of the year.

In Walmart US retail stores, self check out is going to be expanded in more stores by the end of the first quarter.

According to Charles  Holley, every second of average transaction time that Walmart saves translates to $12 million that can be passed back to customers in the form of savings (lower prices). While there is no number for the savings for Sam's it certainly is a time saver for customers.

What do you think?

Staples Mobile Phone Marketing

Looks like Staples is getting deeper into the Mobile Phones arena. Received an email this morning calling out a savings of $50 on any mobile phone priced $49.99 or greater. The offer is good for 4 days only through 2/18 at Staples locations that sell mobile phones.

Interesting to see the claims this retailer is making about their phone selection. The advertising claim is that they sell the top 3 carriers, Verizion, AT&T and T-Mobile. I struggle with this one as I thought during all the noise on the possible AT&T merger with T-Mobile that T-Mobile was number four, behind Sprint. Guess that is just an advertising claim perhaps?

Looking at the comparison of services included in the chart it appears that Staples offers something called a Free Bill analysis. Will have to dig into that to see what that looks like. Interesting to see the call out that they have Mobile Experts in the stores. The locations I have been in have had these dedicated employees in the area but have not noticed a high level of engagement like those that would be seen in a Verizon or AT&T store.

With 1575 US locations, assume that half of them sell these phones and that would make 787 locations where this coupon could be redeemed.

Target Super Bowl Endcap

Not known for having a huge emphasis on Super Bowl advertising, Target had this main aisle end cap set for the week before the big game.

Worth noting about this 51" Samsung are the various products being merchandised with it. Forget about those Doritos just for a minute and take a gander at the other products. There are 6 ft HDMI cables from Vizio ($27) and GE ($31) as well as cable ties to get those unsightly wires out of the way. For the final add on, check out the 3 year service plan for this TV for $45.

What's missing? Given this was taken in the middle of the afternoon, employees to talk to customers were scarce as were other customers besides myself.

Walmart 3D Update

So, couldn't resist going into some of the local Walmart stores to see how that ad would be merchandised. While I saw only one of the 3D sets advertised on the floor, (The 65" Vizio), it did look like Walmart was featuring the 60" Panasonic Plasma for $898 in multiple locations.

Other thoughts centered around one store where it looked like they took out every big TV they had in the builing, put it in one area of the store kinda like what you might see at one of the clubs.





Walmart 3D Advertising

Walmart 1-29-12 Insert

Interesting ad this morning from Walmart featuring 3D TV's from $398. With a week to go to the SuperBowl this ad gives them an opportunity to show newer technology at a Walmart Price.

What else attracts the eye? Look at how they are merchandising a solution for the customer in the ad. While each of the TV's come with 2 pairs of glasses, customers can buy another pair for $32 after Rollback of course. Need to improve the sound, add a Soundbar for $98.

Soundbar's and extra glasses do nothing for you unless you have some content. Here a customers sees 3D DVD's @ $29 and a 3D Blu-ray DVD for $98. Of course you will need a 6' HDMI cable for $27 to hook that Blu-ray up to the TV to watch those 3D movies on.

Reading the description further on the TV says they are Smart TV's, now there is a wireless router for that at $58. Total all these up and it adds $316 to the 3D TV's and $156 for the non 3D TV's pictured if a customer does not need a Blu-ray player and HDMI cable.

Makes sense to me given that one never sees a lot of employees in this department who would have all the knowledge that is laid out for the customer on this page. What do you think?

Staples: Tune Up Tuesdays

While out at Staples this morning, couldn't help but notice this table set up at the front of one of their stores.

While the title is catchy, it's the day of the week I find interesting. Tuesday is generally not a busy day in retail, so if a store can get customers to come in with the promise of getting their computer to work faster for $10, seems like a win.

According to the sign, Staples offers to

• Boost Speed and Performance
• Check for Spyware and Viruses
• Optimize your hard drive
• Uninstall unwanted programs and trialware

The wording on the sign creates value for the customer as it requires an appointment, looks like that would mean less waiting around to get tuned up. Of course by coming in and getting those personal recommendations would mean opportunities for sales that probably wouldn't happen otherwise.

Wonder if this is actually working and if it is something widespread? Any thoughts on what those sales might actually be, I heard the term basket used by other companies, wonder how big that would be for this?