Article: The Walmart Equation

by on May 22, 2009

I know that I’m a few days late to the discussion on this, and almost everyone has weighed in on their opinion, but I felt like I ought to share my analysis. If you didn’t hear, Walmart is redoing their electronic department to compete with Best Buy and the like. Apple was mentioned as having its own section, along with brands such as Nintendo. Many are wondering if this means that we’ll see Macs being sold at a Walmart near you.

Walmart + Apple = ?This has the potential to be a huge deal, maybe even one of the biggest things Apple has been involved with in recent memory. The argument could be made that Apple is a “high-end” brand, and I think often the media and Microsoft want you to think that. Walmart, on the other hand, has the reputation for being everything cheap, low-to-middle class, and killing the competition for the sake of selling whatever. How could the two mix?

Walmart already sells iPods and recently started selling the iPhone. Although this is only a small portion of the product line, the iPod was a win-win in that Apple was able to sell more iPods without requiring people to order them or have customers go to a Best Buy or other electronics store. As someone who has done a fair amount of traveling, I have been amazed the size (or how small to be more specific) some of the towns that have a Walmart. This allows people to pick up an iPod as an almost impulse-buy. Meanwhile, Walmart could now get a bit of respectability from the tech crowd, as they sold the #1 music player.

Would the Mac be different?

Unlike the iPod family, Apple’s Macs are priced higher than the competition. I will argue as much as the next person that the premium is worth the extra cash, just like when buying a Toyota or Honda. You get better reliability, a higher resale value, often more included features, and a better user experience. Budget-conscious consumers may not see the value in spending $300+ on a Mac that “does the same thing” as a $600 computer from HP or Toshiba. The staff in these stores also won’t exactly be selling Apple products, so for the uninformed consumer, price and the occasional TV ad are the only influences.

I see the idea that Apple start with the Mac mini and entry-level MacBook making the most sense. The Mac mini’s pricetag being at $599 can help generate the mindset that Macs don’t have to be expensive (although please include a keyboard/mouse/etc. for those who are expecting it). Apple could work with Walmart to highlight the benefits of Macs in promotional displays/brochures and let the computers sell themselves.

Many will argue that Apple needs to lower Mac prices below the $1000 barrier to help generate sales. I would agree. Also, in the last week many articles that I’ve seen on the Walmart news have had comments stating that this would hurt the “image” of Mac users and things like that. I think it would help demonstrate that Macs can be a good computer for anyone. Isn’t this what Apple is going for with their Mac/PC ad campaign?

I think the move has the potential to be helpful in helping the Mac get exposure in places where an Apple Store may be a day’s drive or more and an electronics retailer isn’t close either. Personally, I think that Apple and Target would be a better match, due to customer perceptions, but Walmart has been trying to move upmarket for some time now and Apple could help.

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