Mass merchandisers selling PC products

From...

by Bill Wallace

(IDG) -- The next time you visit Costco to pick up a six-month supply of toilet paper, you may want to stock up on printer paper, ink jet cartridges, or ZIP disks as well.

Four of the major mass merchandisers have jumped into the computer equipment and peripherals market in a big way. You can find PCs along with toiletries and foodstuffs at Costco, Kmart, Wal-Mart, and Target.

The quality of the products is generally good, and prices are comparable to--and sometimes even lower than--those at national computer store chains like CompUSA. Many shoppers also appreciate the convenience of going to a neighborhood mall rather than making what can be a long trek to a specialty store. While selection is generally growing, you still won't get the kind of choice you find in a dedicated computer or good electronics store, and sales help can be spotty or nonexistent.

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Still, you may not need much sales help to buy a box of floppy disks or a replacement ink jet cartridge.

"These things are commodity products," says Janet Waxman, an IDC analyst. "If you can get a calculator in a drug store or supermarket, you buy it there, providing the price is low enough."

Which store does best with high-tech merchandise? All four of those chains deal in reliable brand-name products from manufacturers such as Compaq, Hewlett-Packard, Iomega, and Canon. And all offer computer products through their Web sites as well as their brick-and-mortar outlets.

What's in Stock

But there were differences among these four mass marketers of digital wares. Two of these chains--Wal-Mart and Costco--sell a full range of PCs and accessories, including brand-name desktops and notebooks. Kmart offers only its own, in-house PC, the entry-level Intel Celeron 633-MHz-powered "Blue Light Special" that retails for about $650, roughly the same as a similarly configured Hewlett Packard Pavilion.

Target, which was selling a low-end HP Pavilion model from its Web site as recently as last December, seems to have exited the PC market entirely (the company declined to be interviewed for this report). Now Target sells only peripherals and supplies such as printer cartridges and floppy disks.

The stores also vary in selection and customer service. Wal-Mart stocks a wide array of gear for more sophisticated users, including memory upgrades, internal hard drives, SCSI boards, and sound and video cards. Salespeople are generally knowledgeable. But at Target and Kmart, we found motley in-house selections of equipment and supplies jumbled among displays of boom boxes, wireless telephones, and videocassette recordings.

One Big K store in Northern California had only three "Blue Light Special" monitors on display--and none of the PCs. In another store a few miles away, computer equipment was relegated to a tiny area at the very back of the facility.

At a popular Bay Area Target, meanwhile, only a couple of boxed ink-jet printers were available. The selection of cartridges and other supplies was poorly stocked and badly displayed. Software--mostly games--was jammed without pattern into an overhead rack.

While Costco sells everything from desktops to ZIP drives, it suffers from a disorganized warehouse atmosphere. At Costco's large San Francisco center, for instance, crates of equipment were stacked in pallets a few aisles away from plastic sandals and piles of off-price blue jeans. In-store supplies were spotty and knowledgeable salespeople difficult to find.

Service Anyone?

Service and support also vary among the mass merchandisers. Kmart and Wal-Mart offer limited warranties on major hardware and have telephone and online support. Target's gear is limited to the manufacturer's warranty. Costco allows warranty returns to any of its retail outlets.

Mass merchandisers aren't CompUSA's only upstart competitors: Even chain pharmacies and camera shops sell magnetic storage media, ink jet cartridges, and computer cables these days. You may soon be able to pick up a new mouse or printer cartridge at your local supermarket. And in the Bay Area, the geek's one-stop shop has long been Fry's Electronics, which boasts a supermarket-size array of electronic gear, and offers several shelves of junk food and soft drinks as well.

Of the big mass merchandisers, Wal-Mart offers the most variety of PC products, but all of these stores are fine for routine supplies. If you know what you need and you don't need a lot of sales help, there's no reason to seek out a specialty store anymore.

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Costco
CompUSA
Kmart

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