Sam’s Club Launches Free Tech Support
By Tom
Ryan
Sam’s Club
is launching free technical support nationwide for consumer electronics.
The rollout ignited speculation that its bigger sister, Wal-Mart, would
likely be introducing a similar service to support its push into electronics.
Under the
program dubbed “Sam’s Club Tech Expert,” the warehouse club’s technical
support staff will assist members with questions from installation and
set up to trouble shooting. Members can get free tech support on any
electronics item even if they did not purchase it at Sam’s Club. The
service, effective Nov. 1, also offers home delivery starting at $50
and installation packages starting at $89 to members. Fees
vary by package and market.
The “Tech
Expert” program, which includes video game hardware installation and
music CD ripping, had been in tests at select locations for the past
year. A third-party firm, which Sam’s Club declined to name, is providing
the services.
“We believe
the new program and changes are in line with our other member services,
and allow us to continue to invest in offering high quality leading name
brand electronics at superior values,” said Steve Dacus, senior vice
president, electronics and technology at Sam’s Club, in a statement.
Costco also
offers a tech support help desk and charges for home delivery and installation.
But Pali Capital analyst Stacey Widlitz, according to Home
Media Magazine, said
in a note that the rollout may pose particular challenges to Best Buy’s
admired Geek Squad in-home service.
“With discounters
such as Sam’s Club getting into the CE services game, we believe that
the gap between Best Buy and its competitors may be beginning to close,” Ms.
Widlitz wrote.
Indeed, many
observers believe Sam’s Club’s move increases the likelihood that Wal-Mart
will roll out a similar service to replace the recently shuttered Dell
Technology Center test program. Under the pilot program launched in July
2008, Dell technicians had been providing support services through kiosks
at about a dozen Wal-Mart stores in Dallas.
Discussion
Questions: How critical are tech services in supporting the consumer
electronics category? What does Sam’s Club’s and possibly Wal-Mart’s
move into tech support mean for Best Buy’s competitive position? What
are the pros and cons of Wal-Mart getting into consumer electronics
servicing?
Free tech support is a big deal, particularly for maturing baby boomers. This could be the ultimate soft benefit for CE and is in stark contrast to what Best Buy just rolled out–earning Reward Zone points for eating at certain restaurants.
It will be interesting to see if Amazon matches this. If so, this will be even worse for Best Buy.
Sam’s Club’s decisive action step to move forward with tech support plays into the demands of the marketplace–both their “small business” community of customers and regional offices of “mid-size” businesses, and even the direction of the FCC to further link a greater portion of the U.S. population to the internet (the FCC has billions of stimulus dollars to leverage this move).
Sam’s Club is paying attention to their customer base and their needs. And, as technology continues to evolve and change, they are anticipating better ways to serve the existing base, bring them into contact with Sam’s Club more frequently, AND, open up the door to expanding their base with new consumers.
Smart move.
Apple offers a $100 annual contract that allows one hour per week with a Mac expert in one of their stores. My wife and sister-in-law use it, and that puts them in the store on a regular basis, where they are always looking at (and sometimes buying) what’s new. So yes, it’s a good idea to get people into stores!
My prediction is that this will be huge. They are competitive in price and with this little added benefit–with much value–will close the deal. Many will flock to the alternative for a little advice when there is a minor problem. Of course, the advice is often, reboot!
Technology has invaded our business and personal lives and today, most of us can not live without it. At work, we may be fortunate enough to have a support staff or to have our company’s contact for a third party for support. At home it is a different story–we rely on ourselves, family members or friends to figure out what goes where or why this is not communicating with that. While I am not sure of the full range of the offer and capabilities of its staff, the new Sam’s Club service (I am a member) will be a welcome addition for most people.
I would expect that the introduction to many people will be through the installation plan. Have you ever tried to get a 40+ inch flat screen home? It’s heavy, bulky, etc, so it isn’t going in your car (SUV…maybe). Once home, it needs to be integrated with your surround sound, DVD/Blue Ray and then someone has to figure out which remote really can control all of the various devices. While “plug and play” has made it easier for PC and laptops to network than it used to be, many people still find it doesn’t always work the way it’s supposed to. In many cases, if you call it requires a fee to reach tech support or to move to a priority line.
In reading the articles, I saw nothing that indicates that Sam’s is offering support for any software, so it appears the support will be limited to hardware issues. However, for many, that will be a welcome addition to their benefits for being a Sam’s Club member.
Time-pressed consumers and non-techies should welcome a service like this. The fact that you need not have purchased the item at Sam’s is a great PR lever. Electronic devices are growing more complicated, and when combined with the need to link devices to maximize use, Sam’s tech support will be helpful. Is this an assault on the Geek Squad? Yes. Can we expect to see Walmart offer the same services soon? Probably. Who wins? Consumers.
I agree with Phil Rubin (above). This is a smart move, given the aging baby boomer population. Despite electronics becoming increasingly intuitive to set up and use, older consumers simply won’t want the bother of set-up.
It also speaks to the continued commodity-nature of electronics and the need to create new revenue sources within the category. When Walmart is selling notebook computers for under $300.00, it’s a signal that there’s not much profit left in the hardware.
Where were these guys when I bought my flat screen TV and new surround sound system? Nine months later I still haven’t integrated the DVD player to the surround sound. (But, I did figure out how to download Netflix instant movies through my computer, to view on my flat screen.)
These systems aren’t so complex that one can’t do it. But, if the service by a vendor is the right price, the decision will tip towards the vendor.
Tech support is terribly valuable in these days of electronics and communication. The best hardware in the world is worthless without good tech support to back it up. Once upon a time, tech support was free. That is getting to be more rare all the time. We all need help. But, more than that, we all need the comfort in knowing that there is someone that can help you. That’s what Sam’s is offering.
If this works, of course it will move to Walmart. And, if it moves to Walmart, it will put great pressure on the Best Buy positioning and offering.
In a world of complex consumer electronics where consumers note this complexity as one of the top issues, of course this is an important development. To some extent, as devices become much more connected and therefore increase the overall complexity of solutions in people’s homes, cars, and mobile life, it is critical to offer support or the sale cannot be completed. It is not surprising that consumers need these questions answered when a new item needs to fit into existing solutions.
However, that simply brings up the point that WHAT KIND of technical support is offered is also critical. While delivery may seem simple, it often is not. Installation is also not trivial and if done wrong can result in costs and consumer frustration. So, while we will continue to see many retailers step up their offers, it is important to note that they are not all created equally. One need only look at the cable market where MSOs have labored for years to improve the quality of their service offerings with mixed results.
While the Geek Squad may set some standards, it is far from perfect as BBY would agree. Still, they have a significant lead in training and acquiring qualified staff. Many of the alternate services have issues providing consistent service levels across the zip codes.
As well, we need to see the definition of what one gets for “free” as the offer may or may not be that compelling or complete. As with all things these days, the “word of mouth” on this will be impossible to stop, so underpromising and overdelivering will be important or the services offered may not get a good reputation which will then have the reverse effect of what is targeted. This is not that simple to do, again, just ask Best Buy.
The point is that with the arc of technology, it is mandatory to address and Sam’s or WMT should be complimented for seeing this. Now it is up to execution as the mere signboard of offering services is not much at all. It will be interesting to see how they tilt the services to either consumer or small business where Sam’s could impact various VARs or other service providers. What is not clear is why consumers would look to them for items not purchased there. While the offer is nice, what would make consumers have confidence that they could integrate or answer questions properly on goods they do not sell?
Of course, this is the classic separation of general goods vs. specialty approach. We will have to see how far up the complexity and price ladder retailers like WMT or Sam’s want to go, and how successfully they get there. Is this more pressure on Best Buy? Yes, to some extent, but it may also prove to be a good comparison point for marketing. Let the games continue!
It may be a smart move but in this case, Walmart and Sam’s are an also-ran to the marketplace with the offering. Not that it matters for this giant, whatsoever. Nonetheless, they are behind the marketplace. Generally, that matters. In this case, probably not. We’ll see.
The challenge will be to hire the right folks for the jobs. Worse thing here for these products is to have someone on staff that knows even less than the consumer and having that name tag with ‘tech expert’.
I wonder what this adds in costs to the Sam’s business model for CE? If it does not noticeably reduce their competitiveness on price versus Costco, et al, it has got to be a winner. The only worry I have is that the third party provider may not live up to Sam’s Club Member expectations and thus create more bad will than good. But given the incredibly low “customer service” hurdles most of us have come to expect from CE, that is unlikely to be a problem.
As someone who follows the tech business every day, I would caution everyone to temper their enthusiasm a bit. Services seem like a panacea for additional profit, customer interaction, increased store visits, etc, but to date, the reality has been much different. The competition for these services is very tough between the OEMs, the MSOs, the retailers and independent providers, and the ability to offer people a service that they will pay for and find valuable and renew over time has been problematic. And the difficulties of actually doing this right are very high.
But free is free, although I think Sam’s might find that over time, it’s not a sustainable long-term business model.
This is a great move. Imagine how many customers will delve into gadgetry that has intimidated them until now. This expands their reach into the marketplace, along with accomplishing many of the benefits mentioned by others here. The market is far from saturated for Sams/WMT, and this test will give them insights they can leverage outside the US.
There are a bunch of things going on here that make this whole process very tricky. I agree that the average person needs help getting all their technology integrated, but it is going to take a lot more than a couple of retail representatives coming into the buyer’s home.
Integrating today’s technology into a “Home Theater” experience requires running wires behind wallboard and additional electrical outlets. It may even require new seating arrangements and furniture. The fundamental problem is that most homes don’t have a wiring closet in their basement, which is what is going to be required.
The other option of course, is wireless. But now you are on a whole new level of security issues. Without the physical security of a wired network you are vulnerable to a whole host of attacks from simple eavesdropping to the theft of services. And of course, wireless remains less robust than a wired network.
Home construction is changing and prewired homes with integrated wiring containing telephone, cable, cat5, and fiber connections is being run to a central location. Additional audio cables may be necessary for surround sound installations. This prepares the home for the connections necessary to integrate the kitchen appliances, HVAC, and entertainment centers with the central home server which will control them all. When this is done it will be much easier to install new equipment.
The second question in all this comes after everything is connected and the user wants to utilize their new equipment. This is when the retailer’s representative will be able to help. But again, there are two levels of help. On one hand, the retailer should be able to provide a lot of support through their website and by remotely logging into the customer’s home. On the other hand, some users may need personal visits and phone calls. In either case, I think it is going to take a lot of effort to get some customers up to speed. What would be an interesting debate is whether discount store customers will require more hand holding than high-end retail customers? I can rationalize both sides.
Of course, if all you’re going to do is bring home the new TV, plug it in where the old one was, never use the HDMI inputs to connect it to your computer, never attach the surround sound speakers, and continue to user your Betamax, you might as well just stick with rabbit ears and the old TV.
This concept has worked wonders for everyone from BB to Amazon. Sam’s needs to jump on the wagon. Along with this we will probably see extended warranties as well. These all do two key things for the customer. They increase customer satisfaction and increase profits. Plus, a happy customer returns to the store where they purchased the product to get accessories or upgrade their products. This keeps the customer returning to Sam’s instead of their local CE store. What a win for Sam’s (and Walmart)!
Tech Support is extremely important when selling to anyone outside of the geek community. The geeks can address almost any problem with their inert geek sense. The rest of us need help raising and lowering the volume. If I have someone to talk to that isn’t reading pages out of a customer service help program then I am thrilled.
Nothing is more frustrating than the fifth CS call about the same problem and some CSR having to start you all over on page one of the CSR manual. It’s none of your business if I have fluorescent lights in the house! If Sam’s will go to the trouble to hire the right people (some of the best used to work for Circuit City–about 2 years before the bankruptcy) and teach them “idiot interface techniques” then they could become the “go-to” place for home theater. You might be interested to know that the big screen TV market has been effected less by our depression than any other category. Why not use this category to increase traffic?
I am actually an outlier here; I do not believe that technical support will be very important to Wal-Mart or Sam’s Club. You have to look at the type of electronics that they are selling. While Sam’s does sell big screen TVs and computers, the bulk of their electronics (and even more of Walmart) are the “cash and carry” type. You do not need much technical support for an iPod, a camera or a video game machine. For those, your children will be better support than anything the company can provide! 🙂
Best Buy tends to sell much more complex solutions, which can require configuration or significant set up. Therefore, a support system such as the Geek Squad is a solid fix as a service expansion to their product offerings.
Lumping “consumer electronics” into one category tends to blur those distinctions.
This is crucial and a must for all retailers that offer a tech product. Surprising that they have not started this earlier.