Wednesday, August 11, 2010

Sam's Club to Use Wi-Fi to Push TV's

The Wall Street Journal
Customers to Get Unfettered Internet Access to Test Devices—and Check Up on Competitors' Prices

This holiday season, Sam's Club is making a big bet on Internet-connected television sets—and hopes that providing free Wi-Fi in its stores will help draw customers to the new technology.

The Wal-Mart Stores Inc. membership warehouse chain's more than 500 clubs will be outfitted with Wi-Fi by November. The move is testament to Sam's Club's high hopes for Internet TV sets and other Web-enabled devices this holiday shopping season.

By providing Wi-Fi, Sam's Club says it hopes to help customers better understand such products, which are still relatively new to the market. "This will allow a member to walk up to a Samsung LCD Internet-enabled TV and see how to find his Facebook page or stream video from Vudu," said Sam's Club Chief Executive Brian Cornell in an interview. "It is an intimidating category with lots of complexity."

But Wi-Fi also will allow Sam's Club shoppers more reliable Internet access on their smartphones in the warehouse, where they can find additional information about what they are buying or check competitors' prices. AT&T Inc. is providing the network, accessible to any Sam's Club member through a few key strokes, according to Michael Chaney, Sam's senior director of technology services.

Mr. Cornell said Sam's Club is "very comfortable" with its members' checking competitors' prices.

Consumer-electronics experts said they expect in coming months to see more retailers set up Wi-Fi in their stores to better demonstrate how products work. Wi-Fi is available at Apple Inc. stores, at Best Buy Co., and at stores owned by the consumer electronics chain TigerDirect Inc., which purchased the CompUSA brand in 2008.

"There's clearly a lot of need for Internet access in retail stores," said Stephen Baker, consumer electronics analyst at NPD Group, a market research firm. Retailers spend "all that money to put information online, so they want to make sure customers get the benefit of that, regardless of where they are shopping," he added.

Internet-connected sets accounted for 11% of all TV sales in the first six months of the year, and that figure is expected to grow, according to NPD.

Shoppers have been able to access the Internet via smartphones in stores without the aid of Wi-Fi, but adding the service—which provides wireless high-speed Internet service within a relatively small radius, or hot spot—removes dead zones and increases the reliability for Internet access throughout the store.

Retail analysts said Wi-Fi will be an important addition at a retail chain such as Sam's Club, known for low prices but a limited amount of sales help. Mr. Cornell said Sam's Club has beefed up consumer-electronics training and also began offering a 24-hour phone service where members can access information and assistance from tech experts.

Best Buy, the largest seller of consumer electronics, said it isn't worried about stepped up competition.

For the holidays, "we will offer a superlative experience for consumers who want to understand how Internet TV options connect to their lifestyles and their other gear," said Best Buy spokesman Scott Morris. "Certainly you can expect an unparalleled breadth of selection and highly competitive pricing."

Sam's also is launching an app for all smartphones that will eventually let shoppers scan products at home and create shopping lists. They can access Sam's Club discounts with their phone app that will be deducted automatically at checkout.

Best Buy is testing a similar phone app called Shopkick in its San Francisco stores that will allow customers to redeem rewards points and personalized discounts at checkout by providing their cellphone number.

An increasing number of high-end television sets offered for sale in stores will have Internet connectivity this year, as streaming movie services available as part of the sets have proven popular with consumers. Internet connectivity helped increase sales of Blu-ray players last year, after sales languished for several years.

This year's television models will have Internet connectivity built in, instead of accessed through a wire that needed to be plugged in—a consumer turn-off, according to NPD's Mr. Baker.

With the advent of more store Wi-Fi networks, retailers said they aren't concerned about shoppers increasingly using their smartphones to check competitors' prices in their stores. "They know they are not going to lose customers over a few dollars, and many retailers have price-match programs," said Mr. Baker.