Walmart to battle BestBuy.

[Smokey]

Walmart, which had hinted at ramping up its electronics selection and battling Best Buy in the wake of Circuit City and Tweeter’s respective collapses, will equip its stores with “larger,” “more interactive” and “roomier” electronics displays beginning on Monday, according to The Wall Street Journal.

“Circuit City’s business is up for grabs right now and we expect to get our share,” Gary Severson, Walmart’s senior vice president of home entertainment, told WSJ.

Indeed, shortly after Circuit City’s demise, a consumer survey by the NPD Group indicated that 55 percent of former Circuit City customers said they’d take their business to Best Buy, and 11percent to Walmart.

But it didn’t work out that way, though. According to analysis by Morgan Stanley, the first-quarter market-share estimates show Walmart and Amazon essentially splitting much of Circuit City’s TV business.

And it seems that Walmart is looking for an even bigger piece of that pie. Among the changes are an expanded selection of “higher-end televisions” from Sony and Samsung, an expanded Blu-ray player and movie selection and Palm Pre smart phone. There are even online reports of Walmart offering two Blu-ray players for under $200 as soon as May, one of which is reportedly from Philips.


http://www.electronichouse.com/article/walmart_gears_up_literally_to_battle_best_buy/?utm_source=eh&utm_medium=rp

[bobsticks]

I bought my Sony Bravia at a Wal-Mart and had no problemo savin' a couple hundy...

...that said, if they truly want to pick up significant market share they're going to have to do a better job at getting deeper into the computer accessory and video game categories.

[luvtolisten]

I'm glad to hear it, the more competition the better!

[Smokey]

I agree luvtolisten. The more competition the better considering that in most cities in US, they both are right close to each other.


...that said, if they truly want to pick up significant market share they're going to have to do a better job at getting deeper into the computer accessory and video game categories.

You sure said a mouth full there Bob.

My local Walmart only devote half aile to computer department and their lower end components always seem to be out of stock :(

[Mr Peabody]

Wal-Mart has always carried the very entry level, they have that reputation to deal with and forget about ever finding anyone who might know something, you are on your own. I think that's the way things are going though and with that what's to bring some one in the door when I can have it delivered to mine. On the other hand WM does have foot traffic, hey Bubba, grab me one them LCD's wildst I pick up a case of moter oil.

[02audionoob]

I'd pay more to buy somewhere else besides Walmart for anything. I haven't found that I need to pay more, but I would.

[Worf101]

I avoid it like the plague if I can. I don't like box stores. I go to the local True Value and Price Chopper supermarts. I'm sure they're NOT missing my money. Long as I can get electronics delivered to my door I'll skip going to Wally World. If I need a computer component ASAP, then and only then do I got to BestBuy.

Da Worfster

[Auricauricle]

Say whatever you want to about Walmart, they are a savvy group that appeals equally to the "everyman" (as described by Mr. P), whose needs for motor oil and a chunk of electronic hardware can be met under the same roof. As a small-town boy, I can appreciate the need for such amenities, which would otherwise have to be met by a long drive to a mall, umpteen miles away. As much I despise the oppressiveness of the place and its ilk, I have to take stock of the fact that my taste in equipment will not be met by Walleye or Worstbuy; but if I need that case of Quakerstate, they're the best game in town....Maybe the only game at that!

[luvtolisten]

Say whatever you want to about Walmart, they are a savvy group that appeals equally to the "everyman" (as described by Mr. P), whose needs for motor oil and a chunk of electronic hardware can be met under the same roof. As a small-town boy, I can appreciate the need for such amenities, which would otherwise have to be met by a long drive to a mall, umpteen miles away. As much I despise the oppressiveness of the place and its ilk, I have to take stock of the fact that my taste in equipment will not be met by Walleye or Worstbuy; but if I need that case of Quakerstate, they're the best game in town....Maybe the only game at that!

Amen to that! I'm a small towner too. Love 'em or hate 'em it's good to have as many stores carrying that stuff as possible. Before WallyMart and Beast Buy, and the Internet, my only choice was Rat Shack. Talk about being violated, I still can't shower enough from the transactions that took place back in those days.

[kexodusc]

Meh, why the hell not? I don't find Wal-Mart to be any better or worse than the monkeys at Best Buy in terms of service and knowledge. The question to me is whether the audio companies that historically love micro-managing their distribution networks in order to control (inflate) pricing are willing to get into bed with Wal-Mart? Wal-Mart is a fickle whore, one who leaves you with nasty lesions and itches in places you don't want to itch...

I can see Wal-Mart carrying unique model #'s which are glorified rebadges that lack a redundant input or some after-thought advanced feature and competing quite well. I'd consider them for my secondary system needs where value/price is more important to me than achieving the nth degree of performance. I bought a Sony VCR and Panasonic DVD player for my bedroom from Wal-Mart almost 10- years ago because I saved a hundred bucks or so. I'd do it again.

One thing I'll say for Wal-Mart. That Sony VCR crapped out about a year and a half later. I took it back with no receipt, long past any warranty coverage, and walked out with a replacement, no questions asked. I don't know of many small mom 'n' pop shops that will do that anymore...too often they pass you off to the manufacturer these days, so I don't have much sympathy for them disappearing.

[Woochifer]

Bad news for Smokey -- more competition for those $5 bin DVDs! :cool:

Actually, there is one factoid missing from your posted information. In January and February, Best Buy did not substantially increase their their wholesale TV orders, and they wound up short-supplied for much of that time. Basically, they underestimated the number of consumers in the market for a TV, while Amazon and Walmart ramped up their inventories. Once Best Buy more accurately calibrates how much inventory they need to maintain in a post-Circuit City market, then we'll have a better idea of how successful Walmart is at moving in on that market.

Big box stores like Walmart and Target are never going to have the selection that a more dedicated electronics store will have. While they might move more volume by expanding their electronics sections, Best Buy will still outdraw them on a revenue per transaction and per square foot basis because they carry more higher end/margin items and they're not selling small ticket items like laundry soap under the same roof.

[Woochifer]

I'm glad to hear it, the more competition the better!

Except that Walmart has been caught engaging in anti-competitive behavior when they enter new markets -- predatory pricing designed to drive local competition out of business, and then raising prices once those competitors are gone.


Meh, why the hell not? I don't find Wal-Mart to be any better or worse than the monkeys at Best Buy in terms of service and knowledge. The question to me is whether the audio companies that historically love micro-managing their distribution networks in order to control (inflate) pricing are willing to get into bed with Wal-Mart? Wal-Mart is a fickle whore, one who leaves you with nasty lesions and itches in places you don't want to itch...

I dunno. I've found the service at Best Buy generally better than at Walmart.

Getting in bed with Walmart is indeed a double-edged sword for manufacturers. Walmart's notorious for squeezing their suppliers to keep lowering costs, no matter the means to achieving that end. And those suppliers often did so by cutting corners on product quality, moving the manufacturing overseas, looking the other way on the working conditions at those plants, etc. Recall that in the early days of the DVD format, Walmart applied pressure on the studios to cut costs by getting rid of the widescreen format and bonus features. In that case, the studios did not cave to Walmart's demands (partly because Best Buy was among the retailers demanding more widescreen titles and more special editions).

I doubt that too many audio companies need or want Walmart -- it's a different niche, and the audio component market is so comparatively small that it might not even be worthwhile for Walmart to dedicate shelf space for audio components. Walmart's electronics sections make up a small fraction of their floor space, so they're a lot more limited in what they can carry. Best Buy's larger floor area for electronics allows them to carry a broader selection. If anything, the deal with the devil that audio companies need to ponder is with Best Buy.

The HDTV and iPod markets are much bigger. That's why Walmart is making such a concerted effort to expand their product selections in those areas.

[Auricauricle]

Folks like Walmart will appeal to shoppers who want to enter into a given market without worrying about being informed and having little interest in educating themselves about the products offered. To most shoppers of that ilk, simply being aware that something is out there is enough. That's where Best Buy fills in the gap: for shoppers who are a bit more savy and willing to do some homework, Best Buy offers the rewards for doing so. It's a different niche, then: for the immediate pay-off and convenience, Walmart is the answer; for the consumers who dig a little deeper, Best Buy is the viable, intermediate solution. But there's a price to be paid, for unfortunately, the intermediate range of choices seems to be the common market's notion of "high-end", as eventually, the good stuff gets put further and further into the margin and folks become increasingly oblivious. I realise that there are some stores out there that try to remedy this (Magnolia, fer instance) by making some of these items visible, but still, the higher end stuff that we talk about in the forums here are becoming increasingly scarce....So, what now, Brown Cow?

[Mr Peabody]

On the other hand, if you were a manufacturer wanting to move some product, how much could you move if each WM store took two pieces each? I don't think it would be hard for them to end up with a name brand receiver line if they wanted one. BB has locations in mainly larger metro areas where WM is in every cow town in the U.S. I wonder where small town America shops for their electronics? It's probably WM already or more savvy may use the internet or drive the 100+ miles to a BB, but this could be a still untapped market that really only WM can reach. It will be toe to toe in the metro areas but outside that WM could maybe do something. Now that I think of it I wonder why WM hasn't tried this before. Maybe they feel Uncle Joe don't care if his farm report is in HD. I worked in an electronics store in a college town of a population of about 24k not counting students and we moved some car audio. Home moved alright but the kids in small town jumped on the "crank it up" circuit just like the slickers.

[natronforever]

I have no love of Walmart, but I do appreciate being able to shop in relative peace there. Every time I go to a Best Buy, I get some store worker approaching me every 5 minutes with their little "we're not paid on commission" speech. Great. Thanks. I get it. Now let me browse in peace.

[02audionoob]

Except that Walmart has been caught engaging in anti-competitive behavior when they enter new markets -- predatory pricing designed to drive local competition out of business, and then raising prices once those competitors are gone.

Exactly. And frankly...IMHO...I've seen what I consider to be anti-competitive behavior by Walmart on all fronts.

[pixelthis]

Exactly. And frankly...IMHO...I've seen what I consider to be anti-competitive behavior by Walmart on all fronts.

AND just about everybody else...its dog eat dog out there.
Last time I was in the place they had finally gotten rid of shelves and hung their TV sets on the wall, finally.
AND the DVD recorder that I bought dual layer discs for is still out of stock
after months of waiting.
Some places are good for some things, walmart is good for TV sets, some computer junk and some cables, thats about it.
When I go in there and see a Denon receiver I will get interested.:1:

[kexodusc]

I dunno. I've found the service at Best Buy generally better than at Walmart.

Yeah, ok, perhaps a tad bit of exaggerating on my part. I've been to Best Buys all over the continent and I'm amazed at how many stores struggle to keep knowledgeable employees, how many of these kids just try to push their favorite brands as being the best, and how much bad info these guys will offer instead of answering "I don't know but let me find out for you".

I'm down on BB, but yeah, I would probably not expect a middle-aged house mom working part-time just to get out, or retired cop at Wal-mart to know much more about the details of HDMI 1.3 than the monkeys at Best Buy.

[Rich-n-Texas]

Hey kex-o-mart! How's it going? You weren't around FOR A MONTH!!!

[kexodusc]

Hey Rich, had some personal stuff to take care of that just kind of took over things for awhile but getting back to normal around these parts. A month huh? Time flies.

[Smokey]

Bad news for Smokey -- more competition for those $5 bin DVDs! :cool:

Not anymore. I used to find some real treasures when DVD bin was in a pile format by digging deep into the pile. But sine they place all DVDs on a shelf format, most good DVDs get cherry picked real quickly.

Now I hang around BigLots' $3 DVD bin :D


I've been to Best Buys all over the continent and I'm amazed at how many stores struggle to keep knowledgeable employees, how many of these kids just try to push their favorite brands as being the best, and how much bad info these guys will offer instead of answering "I don't know but let me find out for you".

I think it is also fair to say that salespersons at BB have to follow store policy. Whether it be to sell a particular brand of TV/audio component, accessories or extended warranty, they have to follow it even if they know better.

[Smokey]

Hey kex-o-mart! How's it going? You weren't around FOR A MONTH!!!

I see Nurse Hatchet have a strict visitation rule in your ward :ciappa:

[Mr Peabody]

If manufacturers still do this, back in the day even if you weren't on commission you could still pick up extra money and gifts from manufacturers called spiffs. Infinity had a good program for a while when I was in the biz. I still have a racing jacket I got from spending spiff points. I also got myself a set of bookshelf speakers and a sub all from spending spiff points. So if some one was looking at Polk or Infinity and one is giving spiff, while the other is not, a person could be encouraged to steer some one in a certain direction. Of course, myself being of high moral fiber and the ut most integrity I would never....... Well, actually, Infinity was our best speaker line at the time and we carried 3 of their series so it wasn't hard to remain honest.

[Auricauricle]

In my experience, places like BB and Cricket City have always been a haven for flunky afficianado-wanna-bes, particularly late-blooming adolescents and premature adults who were more into the hustle than getting serious about the product line (excuse me if this is hard to stomach; just the way I see it). For that, boutiques were in business. In any case, for their purposes and the clientele involved, BB and CC did rather well, perhaps encouraging a few to dig a little deeper when "the itch" came back. Can't fault them for that, really, can you?

[Groundbeef]

And from my experience, the boutiques and speciality audio stores I have visited seemed to be staffed by eltist jerks who couldn't understand how anyone could listen to any system less than the price of a new car (minimum).

If you were not prepared to drop a down payment that could buy a comfortable home in some areas, they wouldn't give you the time of day.

I can appreciate good audio, but I dont' have that kind of money. BB, CC is a nice middle ground in that respect.

[Auricauricle]

And that is what I mean. Aside from my rude comments, which were hopefully taken with a grain of salt, BB and CC just seemed more interested in the Bottom Line. If you encountered somebody who knew anything, you were lucky.

Yes, unfortunately, there are boutique stores that are staffed by such morons; but I avoid them or return the silent rebukes in kind. There are others, however, that are staff by well-informed, genial people.

My comment was and is a generalization, yes; but one (like yours) based on experience and perception.

[Woochifer]

Yeah, ok, perhaps a tad bit of exaggerating on my part. I've been to Best Buys all over the continent and I'm amazed at how many stores struggle to keep knowledgeable employees, how many of these kids just try to push their favorite brands as being the best, and how much bad info these guys will offer instead of answering "I don't know but let me find out for you".

A lot of it does depend on the regional managers. The stores with weak managers will often see very rapid staff turnover. Also, the stores with Magnolia ministores have a bit more latitude in handpicking the staff. My understanding though is that the Magnolia sections don't operate as autonomously as they did before, so that might be going by the wayside.


Exactly. And frankly...IMHO...I've seen what I consider to be anti-competitive behavior by Walmart on all fronts.

I've had dealings with Walmart at the corporate level, and a lot of the bad publicity is well deserved. In more recent years, they've become more conscious of how people and communities perceive them, but they still got a long way to go.


On the other hand, if you were a manufacturer wanting to move some product, how much could you move if each WM store took two pieces each?

Walmart operates more than 4,000 stores in the U.S., so you can do the math.

The issue for a supplier would be how much margin can they maintain, given Walmart's history of squeezing their suppliers and dropping those suppliers that cannot keep lowering their costs. For an audio component manufacturer, they might do better sticking with smaller specialty stores because those stores will support and promote the brands they carry. The manufacturer would also likely maintain a higher margin on those sales, so they don't need to make up for it in volume.

For Walmart, two items of anything is probably not worth the shelf space. Their stores are designed for high turnover and high volume.


I don't think it would be hard for them to end up with a name brand receiver line if they wanted one.

Audio components are a tiny market compared to other segments in consumer electronics. That's why I doubt that it would interest Walmart.

Think about it this way -- Apple's iPod sales alone are more than 4x the size of the ENTIRE home audio component market. In this context, Walmart would make far more money with their iPod section than if they had a full selection of home audio components.


BB has locations in mainly larger metro areas where WM is in every cow town in the U.S. I wonder where small town America shops for their electronics?

Most small towns I've worked in had Radio Shack stores well before Walmart entered the picture. You also have local appliance stores, furniture stores, and TV repair shops that also carried electronics gear. Nowadays though, Best Buy is starting to move into more rural areas. They no longer limit their market to the large metro areas.


It's probably WM already or more savvy may use the internet or drive the 100+ miles to a BB, but this could be a still untapped market that really only WM can reach. It will be toe to toe in the metro areas but outside that WM could maybe do something. Now that I think of it I wonder why WM hasn't tried this before. Maybe they feel Uncle Joe don't care if his farm report is in HD. I worked in an electronics store in a college town of a population of about 24k not counting students and we moved some car audio. Home moved alright but the kids in small town jumped on the "crank it up" circuit just like the slickers.

Walmart will do what's best for Walmart. Muscling in on the electronics market is something they've been doing for years. Circuit City's demise leaves a gap that a lot of players will try to plug. But, Walmart will only carry items that can generate huge volume and turnover quickly. People living in rural areas will just do what they've been doing. It's not uncommon for people living in rural areas to drive 100 miles to do their shopping for a lot of things. Walmart might divert a few customers, but you'll still have a sizable number of shoppers that will travel to a specialty store.

Walmart's advantage is that their customers visit the stores regularly for their food and other household items. Best Buy also built up their market share by emphasizing products that their customers shopped for regularly -- i.e., DVDs, CDs, video games, etc. People do not buy a TV every week, but Walmart and Best Buy have a built-in audience.

[02audionoob]

Here in Dallas there's a boutique audio store staffed by fellows who in my experience have been easy-going, knowledgeable and respectful. I haven't bought anything from them yet and whaddyaknow...their attitude remains just as good in each of my visits.

[luvtolisten]

Sadly, all the boutique stores in my town have closed. It all started with the entrance of the big box stores. We had the chains Silo, Yes, Sounds Great, Lechmere, and a few others I can't recall. At first it was great, all the competition and the sales battle in the weekend papers. But the boutique stores couldn't compete. Along with that, the new stores concentrated on trying to wipe each other out. The boutique stores were the first to go. To cut costs as Circuit City did, they fired their experience and knowledgeable people, only to replace them with new people with little experience or knowledge of the product, because they could pay them less. The turnover rate for employees in these stores is tremendous. It's why there are no knowledgeable people there. They just don't pay then enough. It's one of the things we have to give up for lower prices. Whether we want to admit it or not, price means more to people than service. I'm afraid it's just a sign of the times.

[Smokey]

And from my experience, the boutiques and speciality audio stores I have visited seemed to be staffed by eltist jerks who couldn't understand how anyone could listen to any system less than the price of a new car (minimum).

Some of these speciality audio stores seem to be have wierd store policy also.

I called an audio dealer that carry Paradigm (the only one in town), and try to get some price quotes on Atoms line. He told me they are not allowed to give speaker prices over the phone. WTF?? So he wants me to drive 25 miles just to find out the price! :rolleyes:

Told him to forget it.

[Mr Peabody]

They probably think if you were actually interested it would be worth yor time to come in and hear them then discuss price. Why did you call for price any way? Were you really going to buy them? If so, I'd think an audition would be in order. If not, why should the guy waste his time giving you a price?

[luvtolisten]

I think asking for the price is a fair question. What about the consumer's time? What if you know what you want already? Why the mystery? Price is a BIG factor. It's partly why a lot of people buy on line. Besides, you could always go to the store, do an audition, gather information,and then go buy elsewhere. Wouldn't that be a bigger waste of the salesman's time? I don't blame Smokey, "Gimme the Damn Price!" I aint got time for those games.
That's the way audio salesman in my area anyway, did business back in the 70's. I don't think it worked out too well for them, since they are all gone now. I realize everyone needs to make a living, and they want you to come in. But I like it better knowing upfront what the price is. Then I can determine what services/benefits they offer justifies the difference in price vs. buying on line.

[Woochifer]

Some of these speciality audio stores seem to be have wierd store policy also.

I called an audio dealer that carry Paradigm (the only one in town), and try to get some price quotes on Atoms line. He told me they are not allowed to give speaker prices over the phone. WTF?? So he wants me to drive 25 miles just to find out the price! :rolleyes:

Told him to forget it.

Your reputation proceeds you! :cool:

Paradigm is particularly protective of its U.S. dealer network (their standards about who carries their speakers are a lot looser in Canada, where you can find Paradigms in big box stores). That's why you don't see any of their speakers offered up online, why they don't post a complete dealer list on their website (you have to enter a ZIP code and they'll only give you the closest dealer) and why you don't see price lists on their website. I think this is a Paradigm policy. You probably could have gotten a price quote if you'd inquired about a different brand.

If you want to know the price of the Atoms, it's a lot easier to check online since people regularly post the list prices on discussion forums. As MP indicated, are you actually interested in those speakers? If so, you're best served by auditioning them first anyway and that's how Paradigm does business. They don't cater to the bargain hunters who shop based on how big a discount they can find, or who demo their components at a retail store knowing that they will buy online anyway.

Paradigm's not the best brand to go with if you're just fishing for a bargain. They tightly control the distribution, and they have strict marketing and support guidelines for their dealers. Seems to work for them.

[luvtolisten]

Your reputation proceeds you! :cool:

Paradigm is particularly protective of its U.S. dealer network (their standards about who carries their speakers are a lot looser in Canada, where you can find Paradigms in big box stores). That's why you don't see any of their speakers offered up online, why they don't post a complete dealer list on their website (you have to enter a ZIP code and they'll only give you the closest dealer) and why you don't see price lists on their website. I think this is a Paradigm policy. You probably could have gotten a price quote if you'd inquired about a different brand.

If you want to know the price of the Atoms, it's a lot easier to check online since people regularly post the list prices on discussion forums. As MP indicated, are you actually interested in those speakers? If so, you're best served by auditioning them first anyway and that's how Paradigm does business. They don't cater to the bargain hunters who shop based on how big a discount they can find, or who demo their components at a retail store knowing that they will buy online anyway.

Paradigm's not the best brand to go with if you're just fishing for a bargain. They tightly control the distribution, and they have strict marketing and support guidelines for their dealers. Seems to work for them.

I don't doubt what you say, Paradigm is a funny company to figure. Some prices are listed here, and some you have to call. I was able to buy the Paradigm Titans for $349 (Jan 09) here, while the nearest store wanted $579. And both are authorized dealers. Their stock here comes and goes, as well as their sales. Anyway, here's the link:
http://www.6ave.com/shop/SearchResults.aspx?cti=&pti=&mnm=paradigm&sku=&pgn=1&kwd=&srt=&apr=&zpr=

[Woochifer]

I don't doubt what you say, Paradigm is a funny company to figure. Some prices are listed here, and some you have to call. I was able to buy the Paradigm Titans for $349 (Jan 09) here, while the nearest store wanted $579. And both are authorized dealers. Their stock here comes and goes, as well as their sales. Anyway, here's the link:
http://www.6ave.com/shop/SearchResults.aspx?cti=&pti=&mnm=paradigm&sku=&pgn=1&kwd=&srt=&apr=&zpr=

The Cinema series is generally available for mail order, while it looks like the other models on that site are discontinued versions. I have no idea what that store would be smoking if they want $579 given that the list price on that model is $500.

Paradigm (as well as most other specialty/high-end brands) protects its U.S. dealers by not selling through mass merchants and mail order houses. A lot of this was caused by JBL's decision in the early-80s to begin selling their speakers through big box stores and mail order retailers. JBL's dealers responded by dumping the brand in droves, and that coincided with the rise of the Canadian speaker manufacturers (among others) who quickly filled the shelf space vacated by JBL. Paradigm knows that if they move into the big box and mail order markets, the same thing might happen to them.

JBL still makes high end speakers, but those are primarily sold overseas because the company no longer has a huge network of independent audio dealers.