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Wal-Mart Eyes Installation Business
Integrators and hybrid retailers have gotten used to the new paradigm of no-profit flat-panels due to competition from online, big-box and warehouse stores.
And it's been OK because dealers know they can still earn a healthy profit on their installation services, despite the seemingly low-cost competition from Geek Squad and Firedog.
Now comes word about Wal-Mart’s plans. But is this an opportunity? Will they be subcontracting out the installation service? It's unknown at this point.
Quoted in the article, Wal-Mart senior vice president Gary Severson said, "We are looking at different options" regarding possible expansion into electronics-support services.
Meanwhile, Wal-Mart told journalists during a meeting at its headquarters that the company plans to improve its merchandising displays and make "stores cleaner and brighter and its customer service friendlier."
According to analysts cited in the article, the electronics installation plans by Wal-Mart "would amount to a frontal attack on Best Buy."
The article says Wal-Mart has bolstered its electronics sales recently by carrying more brands such as Samsung and Sony. It is also adding "social-gaming products" such as Guitar Hero.
I, for one, did not believe Wal-Mart would enter the installation business because I don't see how they can make money at it. A recent NPD study shows consumers aren't getting installs from retailers.
And Home Depot just pulled out of the security and smart home installation business.
But the shear volume Wal-Mart would produce could keep integrators busy as subs for a long time, especially with the upcoming DTV transition.
So I guess that series of commercials that Wal-Mart ran last year making fun of installation services was just a bad joke after all.
How do you think this move will affect the industry?
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6 Comments
Replying to the above comment regarding Wal Mart
clean up jobs.
I don’t see it happening. First of all, Wally World will have to sub out the installs and knowing them they are going to look for the cheapest price installer. I suspect that will be ex - Best Buy employees out to get into the business. Secondly,generally speaking, anyone buying Wally World products does not have disposable income for installations.
I say bring it on!!! They all fall under the category I like to call 1-800 idiot’s.The more these big low margin-high volume companies fail the better we true “educated” custom integrators stand out as a “value” rather than “cheap”.Wal-Mart customers expect products & services to be the lowest cost possible, therefore that is at best what they will get.If that satisfies a certain buying group, those customers do not qualify for our services that are not cheap but rather a professional value that a customer can hold accountable and call my personal cell “any” time they may have a problem and usually get it resolved in less than 2 minutes.That is custom, professional, reliable,value!!!!!!!!!!!
I agree guys! We are called out all of the time here in Atlanta to clean-up Best Buy jobs.
After seeing this article, I decided to send an application to be installation service provider for Wal-Mart. They wrote a letter back to me and stated,
“... and wanted to let you know that we have tried this type of service in the past and it was not successful so we have elected not to move in that direction.”
I guess their supplier development department did not read this article or they have decided not to move in that direction.
Brian, that’s classic. Thanks for the update.
Additionally, there are potential revenue opportunities for installers in the markets Wal-mart enters. There’s a couple of companies here in Edmonton and in Calgary that have made decent coin in the last couple of years cleaning up botched jobs left behind by the clowns at Best Buy and a couple of local dealers who bit off more than they could chew. I foresee great labour opportunities coming in and un-FUBAR’ing Wal-mart AV installs.