Sam’s Club’s Wi-Fi Struggle

Written by Evan Schuman
August 26th, 2010

When Wal-Mart’s Sam’s Club said this month that it was going all-Wi-Fi-all-the-time, it renewed the debate about where to draw the restriction line when doling out bandwidth to consumers. Sam’s Club is now confirming that it has quietly–and expectedly–put in customer limits (partitioning its network) to strike that balance.

The chain is dealing with that balance in several ways. To minimize the risk of consumers placing “inappropriate content” on large-screen TVs on display (not sure what they’d consider more offensive: porn or setting the homepage to Costco), content control will stay with store associates. Sam’s Club doesn’t want to “unleash content onto TVs that we didn’t have control over,” said Scott Benedict, the chain’s senior electronics buyer. “We wouldn’t want content coming over the TVs that was inappropriate.”

On the bandwidth level, Sam’s Club won’t allow consumers to drink up all the available bandwidth. It is setting aside a healthy chunk to keep product demos–especially those involving televisions–running smoothly. “We’re going to preserve our ability to demonstrate merchandise,” he said.

Initially, these are the ways Sam’s Club is going to balance security and bandwidth. But Benedict said the chain is open to making changes after launch. “We’re going to test and learn,” he said.

Benedict added, though, that his colleagues in other chains may have more to fear from unrestricted consumers and, therefore, may have to resort to more stringent measures. That’s because, as a membership club, the customers are less wild, he said. (Having seen Sam’s Club members fight over parking spaces in New Jersey, I’m not so sure about that. Then again, everything is relative.)

“Being a membership club, there’s not that openness over who is walking in the door. The band of roving teenagers thing doesn’t really happen in our clubs,” Benedict said.

The Wi-FI debate (which has definitely moved from “Do we?” to “How do we?”) is a key part of the mobile challenge. On paper, retailers are in love with the idea of all the great things these consumer-paid-for devices can do. But in real-world stores, all the mundane rules (such as those annoying Laws of Physics) interfere.

What happens when a consumer uses the ShopKick application at some of the retailers now deploying the check-in app (including Best Buy, Macy’s, American Eagle Outfitters and SportsAuthority) and they can’t get an adequate signal? Will they be blocked from making that purchase or getting those points? After all, one good metal roof is all it takes to block such signals.

Delicious irony was visited upon a New York Macy’s location a few months back, when it hosted a technology symposium from the University of Pennsylvania in its basement conference area. While speakers from Wal-Mart, Saks, CVS and Best Buy were impressing attendees with tales of next-generation mobile capabilities, no one could do anything with their phones because of a lack of signal. The fact that this happened in the headquarters of Macy’s, a leader in embracing mobile technology, was an irony lost on practically no one.

Benedict said that Sam’s Club stores have seen a lot of similar mobile problems directly. “In some clubs, [customers] wouldn’t even be able to make phone calls,” he said.

Sam’s Club, though, has mobile plans to go far beyond Wi-FI and making phone calls. One mobile move will be using some form of 2D barcodes (he wouldn’t say which approach the chain will use) to deliver extensive product information and possibly to eventually support aisle-based mobile purchases.

The efforts of Sam’s Club–which are certain to be studied closely by its parent (the world’s largest retailer)–seem to be striking the ideal balance, at least to start. But if one thing is certain about mobile, it’s that it almost never behaves as expected.


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