Apple News, Analysis and Podcasts

On October 3rd, Target revealed it would be selling iPads. Within weeks of Target's announcement Walmart and Sam's Club (a member of the Wal-Mart corporation) began selling iPads. A natural assumption would be that Costco would also be selling iPads in the near future, but that is not what has transpired.

Costco Wholesale Display Sam's Club Display

Not only is Costco void of iPads, but iPods are not longer available at Costco — replaced with SanDisk Sansa MP3 players. Costco Wholesale has carried iPods for years, often prominently displayed in their Majors Department near the entrance of their warehouses. Target, Walmart and Sam's Clubs are now selling iPads and iPods, while Costco has been left out in the cold. 

There are over 4,300 Walmart stores and Sam's Clubs in the US alone, and the corporation produced $405 billion in sales during their 2010 fiscal year. Walmart is the retail giant, and for Costco to suddenly discontinue iPods is surely no coincident. A source has told T-GAAP that Wal-Mart has been known to make exclusive-like moves before, and the iPad and iPod deal fits within Walmart's strong-arm negotiating. 

Walmart, Target, and to a small extent Sam's Clubs, deliver a higher-level brand experience for Apple over Costco. Costco does not display iPods, there is no Apple-branded kiosk for them, just bubble packed images on a pallet. Compare this to Sam's Club which at the very least, has a Kiosk and actual product to demo. The customer at a Sam's Club can actually evaluate an iPad and make a purchasing decision based on user experience.

Five-years ago Costco was a key channel for Apple to expand their iPod presence. Today, Apple's well beyond needing any one particular outlet to achieve success, and a nudge from Walmart is all it would take for Apple to exit Costco, leaving Sam's Clubs and the Walmart corporation in an exclusive warehouse position.

The situation is ironic, given the fact Costco warehouses have deployed iPads for management use, but if you the customer want one, go to Sam's Club.

0 Comments

Leave your reply