Wal-Mart Plans to Reduce Space for Electronics in Stores - AVS Forum
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post #1 of 85 Old 04-15-2011, 04:54 PM - Thread Starter
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Wal-Mart Plans to Reduce Space for Electronics in Stores
Still More Evidence that the World is Changing


Wal-Mart Stores Inc. (WMT), the world's biggest retailer, plans to cut back on space for electronics as sales in that category have declined, contributing to the company's two-year U.S. sales slump. The company, which is based in Bentonville, Arkansas, will reduce the floor space devoted to items like flat-screen televisions and give some of that space to apparel, according to Rosalind Brewer, who runs the Wal-Mart East division. Brewer spoke at a retail conference in Atlanta today. The reduction is a reversal of Wal-Mart's 2009 move to allocate 21 percent more floor space to entertainment gadgets and comes after electronics contributed to a 1.8 percent decline in sales at U.S. stores open at least a year in the fourth quarter, its seventh consecutive drop. It's something Wal-Mart has needed to do for a year, said Craig Johnson, president of Customer Growth Partners, a New Canaan, Connecticut-based consulting firm, in an interview. You don't need as much space in that area with products shrinking and purchases going online, and electronics has narrow profit margins. Floor space is a scarce commodity.

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post #2 of 85 Old 04-15-2011, 04:59 PM - Thread Starter
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More evidence - “You don’t need as much space in that area with products shrinking and purchases going online, and electronics has narrow profit margins. Floor space is a scarce commodity.”

Bricks and Mortar stores are taking a beating on electronics. I think we have turned an important corner in the evolution of the industry. So, how do we keep innovation happening if there is no profit to be made from it?

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post #3 of 85 Old 04-15-2011, 05:33 PM
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Interesting to see that not even Wal-Mart is safe from Amazon's unrelenting quest for world domination. Fortunately, I think regional Hi-Fi stores still have a place. There's no substitute for being able to audition high quality electronics. Unfortunately, the coming generations are growing up on "diet" sound and video quality. iTunes and streaming video are highly compressed, but most don't care. It's hard for me to watch the video content that Comcast and others offer, and it seems like the compression rates only get worse each year.

The Hi-Fi industry has already consolidated - now it's the big box retailers' turn.
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post #4 of 85 Old 04-15-2011, 05:35 PM
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Quote:


will reduce the floor space devoted to items like flat-screen televisions and give some of that space to apparel,

Walmart is really not a store chain that is a good place to purchase these items anyway. Right no high quality electronics. Same for Target, and other chains that try to sell everything under one roof.

People will shop where they are offered a better selection and better brands. Locally Fry Electronics's matches internet prices and sells tons of flat panels.

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post #5 of 85 Old 04-15-2011, 07:51 PM
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If best buy and other stores did online price matching they might actually be worth a damn.
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post #6 of 85 Old 04-15-2011, 10:05 PM
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An online retailer basically has warehouses from which they ship to the customer. A B&M has to have warehouses to but they also have the retail stores and salesmen -- there is no comparison to the cost structure as online will always be cheaper.

What many do is go to a B&M to check stuff out then buy online for less. So, in effect, the B&M is paying to provide the hands-on experience and the online outfit, which doesn't offer that service, gets the sale because they're cheaper.

Sooner or later B&M's will go away and the shipping companies (FedEx, UPS, etc) will receive truckloads from warehouses and distribution centers and we the customer will never see the product until it arrives on our doorstep.

Walmart has lower prices on some things but not quality items. Walmart imports tons of crap from China and sells that crap really cheap but they don't offer much in the line of quality stuff and when they do there prices are no better and often worse than other outfits.


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post #7 of 85 Old 04-16-2011, 04:02 AM
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This isn't surprising, and goes with stores like Good Guys, Circuit City, and even Best Buy (maybe) shutting down stores.

These numbers and trends are based on consumer demand. And the general consumer only wants whats good for them in the short run, and they want it cheap. If people had more disposable income I can see how B&M's would survive. But I think the stresses on luxury expenses, and entertainment costs only mirror the global economic crisis. If you run this model all the way through it will start looking a lot like the music industry.

3D was supposed to be the savior, and as clever as it is, it just isn't the magic bullet retailers are hoping for.

All this spells DOOM.

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post #8 of 85 Old 04-16-2011, 04:58 AM
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That was the only way I could survive a trip to wal mart....go look at the elec dept. I would never purchase a tv or anything like that there but at least I could look

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post #9 of 85 Old 04-16-2011, 06:44 AM
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Its incredibly difficult just to find someone to get a game out of the display case for me to buy. Not to mention the 50 checkout lanes are available but only 3 stations actually open, filled with 10 customers each......

Even if I wanted to buy a TV from Walmart, I would dread having to go through that experience. I'm actually buying a tv today and kept trying to decide whether to go to amazon or a local retailer. In the end, I decided on the local retailer just because returning or exchanging a tv doesnt seem to be to convenient online.
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post #10 of 85 Old 04-16-2011, 11:47 AM
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Originally Posted by Fishpoke View Post

If best buy and other stores did online price matching they might actually be worth a damn.

They do for stores like Frys etc.. But it would be foolish to price match any item online, since a lot of these sites are fraudulent. I seen a new 960 in 05 online for 1,300.. The website was a scam outfit.. Why should BB blindly match every online retailer.

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post #11 of 85 Old 04-16-2011, 11:52 AM
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I do find it odd that my BB has put in a Magnolia center.. The center piece is the new 85inch, 60,000 plasma.. The Magnolia store inside my BB is beyond words.. & really caters to the hi end, ala, 14,000 speakers etc.. But I think it will fail.. People who buy expensive electronics don't shop at BB, built in Magnolia center or not.

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post #12 of 85 Old 04-16-2011, 11:57 AM
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Quote:
Originally Posted by Curt Anderson View Post

This isn't surprising, and goes with stores like Good Guys, Circuit City, and even Best Buy (maybe) shutting down stores.

These numbers and trends are based on consumer demand. And the general consumer only wants whats good for them in the short run, and they want it cheap. If people had more disposable income I can see how B&M's would survive. But I think the stresses on luxury expenses, and entertainment costs only mirror the global economic crisis. If you run this model all the way through it will start looking a lot like the music industry.

3D was supposed to be the savior, and as clever as it is, it just isn't the magic bullet retailers are hoping for.

All this spells DOOM.

It's only a matter of time before BB starts shutting down stores or going out of business.. Why do you want to go to BB & deal with 18 yr old sales people, who are more concerned with selling you warranties & accessories.

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post #13 of 85 Old 04-16-2011, 01:16 PM
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Originally Posted by Raptorsys View Post

...Walmart has lower prices on some things but not quality items. Walmart imports tons of crap from China and sells that crap really cheap but they don't offer much in the line of quality stuff and when they do there prices are no better and often worse than other outfits.

Brian

I remember seeing news that Walmart and Onkyo had enter an agreement for Walmart to start selling Onkyo products. When I first read this I was surprised that Onkyo would enter into that kind of agreement, but I guess if it was ever true, it's not going to happen now.

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They do for stores like Frys etc.. But it would be foolish to price match any item online, since a lot of these sites are fraudulent. I seen a new 960 in 05 online for 1,300.. The website was a scam outfit.. Why should BB blindly match every online retailer.

I buy from Abt Electronics a B&M in Chicago, yet they will match on-line pricesas long as they can verify that it's legit, which most of the time you can tell just from really looking at the website, or just calling.

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post #14 of 85 Old 04-16-2011, 01:30 PM
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It doesn't surprise me at all. With some exceptions, most things are actually more expensive than what I can get online, even at wal-mart. Furthermore, I like the tracking ability of online purchases. I love being able to go back and look up a purchase from a few years ago when I am trying to remember what model motherboard I have in a PC or something.

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post #15 of 85 Old 04-16-2011, 01:59 PM
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Originally Posted by Bob Hetherington View Post

Bricks and Mortar stores are taking a beating on electronics. I think we have turned an important corner in the evolution of the industry. So, how do we keep innovation happening if there is no profit to be made from it?

What? Decent (even great) gross margins still exist on a lot of products, a store or franchise's inability to convert a sizable percentage of that margin to profit has much more to do with their operations rather than the nature of the products themselves.

Online sales and catalog sales before it have been eating away at B&M stores' sales. If stores don't change operational practices with the times, yes their lunch is going to get eaten. But it's not a forgone conclusion that B&M retail is headed for the grave. People have been saying that for 50 years.

There's going to be turn-over and some will fail, some will succeed and some new guys will show up as well.

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post #16 of 85 Old 04-16-2011, 03:52 PM
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What ever shakes out over the next few years in the CE business, we've created it .. when it became acceptable, even commendable, to demo the goods and then go home and search for the cheapest deal, with no sales tax and free shipping, then we reap what we sow ..

I'm all for saving money, but there are valid reasons why we need B&M retailers .. and when they are all gone, then I guess we'll just roll the dice and blindly buy what looks nice ..

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post #17 of 85 Old 04-16-2011, 03:56 PM
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Originally Posted by zippymelon View Post

What? Decent (even great) gross margins still exist on a lot of products, a store or franchise's inability to convert a sizable percentage of that margin to profit has much more to do with their operations rather than the nature of the products themselves.

Online sales and catalog sales before it have been eating away at B&M stores' sales. If stores don't change operational practices with the times, yes their lunch is going to get eaten. But it's not a forgone conclusion that B&M retail is headed for the grave. People have been saying that for 50 years.

There's going to be turn-over and some will fail, some will succeed and some new guys will show up as well.

I think we're talking about CE B&M retail .. over the last 50 years, I've watched it contract steadily .. other than a blip during the housing boom years and in the mid 1990's .. it's been a downhill ride .. the grave has been dug, it's just a matter of adding the casket at this point ..

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post #18 of 85 Old 04-16-2011, 04:56 PM
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Well i wouldn't mind if they do it since i buy most of my electronics on Best Buy. But yeah it will be bad for those who shop there.
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post #19 of 85 Old 04-16-2011, 07:02 PM
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Quote:
Originally Posted by Bob Hetherington View Post

So, how do we keep innovation happening if there is no profit to be made from it?

Bob

It isn't the B&M store that pays for R&D or makes the majority of profit - it's the manufacturer of the product. Whether it is sold in B&M or online, the manufacturer will make the same profit and will continue to innovate.
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post #20 of 85 Old 04-17-2011, 06:18 AM
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Originally Posted by mgkdragn View Post

What ever shakes out over the next few years in the CE business, we've created it .. when it became acceptable, even commendable, to demo the goods and then go home and search for the cheapest deal, with no sales tax and free shipping, then we reap what we sow ..

I'm all for saving money, but there are valid reasons why we need B&M retailers .. and when they are all gone, then I guess we'll just roll the dice and blindly buy what looks nice ..

I wonder how on-line shopping for electronics will change if congress ever passes the law making all on-line purchases taxable right at the point of sale.
That would be a game changing moment in on-line buying, specially when it comes to electronics. Free shipping would become less of an advantage because if you have to pay tax on your purchase you might as well just go to the B&M store. There you can look at the product, "play" with it, and take it home right then.

Right now, when I buy from Amazon.com, I only purchase small items, like DVDs & CDs, that are hard to find or are at a great price with free shipping, because Amazon.com has a warehouse in Kentucky, so I get charge sales tax on my purchases.

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post #21 of 85 Old 04-17-2011, 06:29 AM
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I would never even consider buying a tv at walmart. Judging from the article, neither would a lot of other people. This seems like something which should have been shrunk down some time ago. Likewise, the PC section at walmart is anemic compared to it's best buy counterpart, and best buy at least offers service/repair etc. Not that I personally need such, but there are consumers willing to pay for it, and it's likely a high margin unit.

It might be different in major metro areas, but here in the 'country' best buy is the only retailer to actually have new TVs, a wide selection etc. Otherwise we're stuck with Target and Walmart. I would hate to see B&M totally disappear.
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post #22 of 85 Old 04-17-2011, 07:42 AM
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part of the problem is very no duh--
the advantage of shopping in an actual store used to be knowledgeable salespeople.
as far as Wal-mart, Target, etc. etc. does anyone on here think that exists at those stores?
of course it doesn't.
so why would anyone that cares about sound and vision even bother in the first place?
the end of knowledgeable salespeople across the entire retail spectrum was the beginning of the death of a positive retail experience imo.
anybody is smart to buy online when there is 0 advantage to shopping in person.
specialty stores for electronics and audio need to embrace big-box reducing the electronics footprint and maybe we can get back to having meaningful b&m store experiences.
too many cities have no specialty stores whatsoever, so not surprising that the people who care are forced to go online as the only sensible option.
the whole retail vs. online situation has just become a disaster imo.
the only way retail is ever going to recover long-term is by making a concerted, real effort to get knowledgeable people back in these stores and get rid of all these minimum wage kids that don't give a crap.
they have to get back to a point where people actually want to go to the actual store because they feel it provides an added value over simply staying at home and clicking a mouse all day.
of course, people will argue that that will take a serious commitment of $$ for real salaries, and thus it becomes a perpetual catch 22 since the stores are seeing reduced money flow due to so many factors.
I just don't know what retail can really do in the current environment to turn things around.
they are really in a fix.
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post #23 of 85 Old 04-17-2011, 08:13 AM
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Quote:
Originally Posted by jrwalte View Post

It isn't the B&M store that pays for R&D or makes the majority of profit - it's the manufacturer of the product. Whether it is sold in B&M or online, the manufacturer will make the same profit and will continue to innovate.

I believe the manufaturer makes the least profit on an item they manufacture. They make their money in volume of product. The manufacturer doesnt typically sell directly to the B&M, a supplier does. The supplier marks a product up ~20-40%. The B&M marks it up again ~50%-100%.
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post #24 of 85 Old 04-17-2011, 11:45 AM
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Originally Posted by NHSkier View Post

There's no substitute for being able to audition high quality electronics. Unfortunately, the coming generations are growing up on "diet" sound and video quality.

The problem is than we go to a phisical store to see the products them buy them online, even some people say that in a tone of anger about phisical stores having higher prices, like if the store don't pay rent or to the unsatisfied employ with its salary or don't having the job of their dreams.

I don't know, but maybe in the future all of we are going to work on amazon, newegg or in a factory on china.

And yeah, sound quality is bad on today average players.
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post #25 of 85 Old 04-17-2011, 01:14 PM
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Originally Posted by KBI View Post

I do find it odd that my BB has put in a Magnolia center.. The center piece is the new 85inch, 60,000 plasma.. The Magnolia store inside my BB is beyond words.. & really caters to the hi end, ala, 14,000 speakers etc.. But I think it will fail.. People who buy expensive electronics don't shop at BB, built in Magnolia center or not.

For people that know better your are correct. Some people have no clue as to what is good or what is high end. BB sales people know some things but are clueless on others, no matter the training. Many "rich" people would shy from the place where I buy my EQ from even though he sells Integra, Anthem, and Paradigm. And only because on the outside his store is not unique, even though what's inside that counts. Oh, I will NEVER buy any HT gear from WalMart btw!

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post #26 of 85 Old 04-17-2011, 02:57 PM
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well according to a rather vocal contingent here on avs, all audio components sound the same anyway. and even if they didn't, in-store demos are worthless. so....what's the big deal?

my local sales tax rate just jumped to 10.5%...
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post #27 of 85 Old 04-17-2011, 03:36 PM
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Originally Posted by runback22 View Post

Its incredibly difficult just to find someone to get a game out of the display case for me to buy. Not to mention the 50 checkout lanes are available but only 3 stations actually open, filled with 10 customers each......

Even if I wanted to buy a TV from Walmart, I would dread having to go through that experience. I'm actually buying a tv today and kept trying to decide whether to go to amazon or a local retailer. In the end, I decided on the local retailer just because returning or exchanging a tv doesnt seem to be to convenient online.

I bought a 55EX500 from Walmart. The guy promptly went and got one out of the back and rolled it out on a cart for me. I paid for it right there at the register and then one of the employees helped me put it in the car. When I returned it the process was painless.

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post #28 of 85 Old 04-17-2011, 03:51 PM
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I was born & raised in the Northwest suburbs of Chicago, then moved to Louisville, KY in 1989. In the mid 70's to the mid 80's we had a few true "Stereo stores" where they carried mid to high end equipment. Back then Video was still at the point where your local retail store (Sears, JC Penny, etc.)
was where you went to purchase TVs & VCRs. The stereo stores had not only very knowledgeable sales people, but they were also audio enthusiasts, keeping up on all the latest news and trends.

Louisville had a small handful of stereo stores like these too, back in 1989. After a few years, these shops closed up and all that were left were the Best Buys & Circuit City. And, as stated before, they populated their stores with sales people who knew next to nothing about the A/V items they were selling...unless they read it off of the manufacturer's promo sheet.

As far as buying a TV from Walmart...I think we have to remember who Walmart's customers are...I bought my 40" Samsung LCD from Abt Electronics online. My 25 yo son (who still lives with us) bought his 39" Vizio from Walmart. I love my Samsung...he loves his Vizio...(but I can tell you his Vizio is definitely no Samsung!)

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post #29 of 85 Old 04-17-2011, 04:29 PM
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Originally Posted by speavler View Post

well according to a rather vocal contingent here on avs, all audio components sound the same anyway. and even if they didn't, in-store demos are worthless. so....what's the big deal?

my local sales tax rate just jumped to 10.5%...

Ouch... I thought we had it bad here in NY.

I tend to purchase most of my electronics online, even though at say Amazon I have to pay tax, there is a much greater selection than there is locally. I don't have much choice as far as B&M shops go...

If I had a choice I would always prefer to put my hands on the gear before purchasing, but I don't have that option much anymore.... at least in Syracuse.

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post #30 of 85 Old 04-17-2011, 04:48 PM
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Originally Posted by NHSkier View Post

Interesting to see that not even Wal-Mart is safe from Amazon's unrelenting quest for world domination. Fortunately, I think regional Hi-Fi stores still have a place. There's no substitute for being able to audition high quality electronics. Unfortunately, the coming generations are growing up on "diet" sound and video quality. iTunes and streaming video are highly compressed, but most don't care. It's hard for me to watch the video content that Comcast and others offer, and it seems like the compression rates only get worse each year.

The Hi-Fi industry has already consolidated - now it's the big box retailers' turn.

I'm wondering why everyone seems to give Amazon such latitude and benefit of the doubt with regard to that one question: "what will YOU do when you're the only game in town?" Only with amazon.com, if they take over electronics retailing, it won't be the only game in town. It will be the only game anywhere.

And Google leadership at least saw the need for that proclamation early on to "don't be evil". Amazon.com doesn't have that self-projected moral compass that we know of.

So, Who is concerned about Amazon's capability of handling THAT level of success without gouging the customers that got them there? I know I am. I think anyone should be.

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