Walmart WMT has launched a program selling refurbished appliances and consumer electronics that it says will offer high-quality products at a fraction of the cost of buying them new.
“Good as new” is the goal of Walmart Restored, the retailer’s latest initiative to help consumers stretch their dollars and build sales outside its core grocery business.
For a number of the industry experts on the RetailWire BrainTrust weighing in during an online discussion last week, refurbs in the appliance and consumer electronics categories make sense for Walmart in particular.
“Walmart customers are the perfect target for a program like this,” wrote Brian Delp, CEO of New Sega Home. “Amazon AMZN had been offering it for quite some time, but their main handle is convenience and speed while Walmart is mainly known for value. This aligns with their core value system and is sure to be a win.”
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“We already work with sellers and suppliers on Walmart.com who are committed to refurbishing top-quality products and preparing them for a new home at a fraction of typical costs,” wrote Michael Mosser, general manager, Walmart Marketplace, last week on a company blog. “And now, those items will be even easier to find and shop with the Walmart Restored program designation. Whether they visit the Walmart Restored section of Walmart.com or see items pop up in search, it has never been easier for customers to shop for quality refurbished items featuring brands like Samsung, KitchenAid and more.”
The retailer says that all refurbished products are inspected, tested and cleaned before being made available for purchase. Each item comes with a 90-day free return policy so that customers can purchase items with confidence.
Refurbished items are currently available for purchase online, and Walmart said it will roll out the program in select stores this fall.
Walmart is not the only retailer to get into refurbished item sales. Amazon.com, Apple AAPL , Best Buy BBY , and eBay EBAY all have programs that give customers the opportunity to buy the brands they want at lower prices than they would cost new.
Many of RetailWire’s experts see refurbished products growing in popularity among retailers — and consumers, as well.
“Consumers have embraced purchasing gently used clothing at stores like Nordstrom JWN , so why not embrace fully refurbished and warrantied items at Walmart?” wrote Georganne Bender, principle at Kizer & Bender Speaking.
Some BrainTrust panelists pointed to a confluence of factors making this shopping behavior more common and Walmart’s move a good bet, now and in the future.
“Great move, great timing,” wrote Mel Kleiman, president at Humetrics. “For Walmart and the customer. This move is taking advantage of the perfect storm, with rising inflation and environmental concerns — a winning proposition for both Walmart and the consumer.”
“Inflation can be an initial driver, but I believe Walmart is thinking ahead,” wrote Ananda Chakravarty, vice president of research at IDC. “Refurbished goods, especially electronics have a significant market already. Companies like Best Buy have been capturing this market for years. Walmart is expanding their service capabilities and product assortment. With the electronics and appliances Walmart sells each year, this can be a booster for them.”
Best Buy sells its refurbished items in stores and online through its outlet operation. The chain said it would double this year the number of physical locations it operates selling clearance, open box, pre-owned and refurbished items.
But BrainTrust member Dion Kenney, COO of Mondofora, pointed out that trying to do this at the scale Walmart wants to could be harder than it seems.
“Large corporations have a mandate to seek growth opportunities and increasing returns for shareholders,” wrote Mr. Kenney. “However that goal eventually makes even the best run companies consider opportunities that are inconsistent with their business model and core strengths. Walmart is a titan in the area of logistics, inventory planning, and vendor management – all areas where they can develop appropriate processes, performance metrics, and control over a manageable number of variables. Refurbished products introduces so many new variables – product use and abuse, environment, maintenance, multiple refurbishers policies and standards, etc., many of which cannot be measured and controlled by the core team in Bentonville.”
“From an initial perspective, this looks like a messy endeavor which will take Walmart away from the areas in which they excel and outperform the competition: organization, predictability, and speed of operational decision making,” wrote Mr. Kenney.