Sam’s Club Bets Drones Will Fly Off the Shelves at Christmas

(Source: wsj.com)  

Move over BB guns and videogames. Christmas morning may have a new menace.

Sam’s Club is betting drones will be a popular holiday gift this year and plans to stock about a dozen kinds—from $100 models to $4,000 versions with high resolution cameras or the ability to pick up small objects, said Dawn vonBechmann, senior vice president of technology, entertainment and office products for the wholesale chain owned by Wal-Mart Stores Inc.

The move comes as drones are capturing attention at a time when little else in the battered consumer electronics market is clicking at the register. Sam’s started thinking about expanding its drone line after noticing a $1,169 model with a digital camera was selling “like crazy” online, Ms. vonBechmann said.

Sam’s surveyed customers earlier this year and found about half bought the pricey drone for professional reasons; real-estate agents taking bird’s eye view pictures of their high-end properties, wedding photographers hoping to get a client’s ceremony from a new angle—and at least one rancher who uses it to check whether perimeter fences are intact from the comfort of his home. The rest are buying it for fun, Ms. vonBechmann said.

The Bentonville, Ark.-based discount chain, with $58 billion in annual sales, is hoping it can grow sales and increase memberships by offering more new and unexpected products.

Sales at U.S. Sam’s Club existing stores inched up 0.4% in the most recent quarter excluding gas, while competitor Costco Wholesale Corp. notched a 5% gain in the same period.

To boost its sales, Sam’s Club needs more excitement and newness, “re-engaging there like we did when we first started Sam’s Club,” said Rosalind Brewer, chief executive of the retailer. Ms. Brewer spoke during a news conference ahead of Wal-Mart’s annual meeting of shareholders last week.

Drones are a niche part of the consumer electronics market that includes emerging technologies such as 3-D printers, Ultra High Definition televisions, wearable fitness devices and smartwatches. Such sales are expected to reach almost $11 billion this year, according to trade group Consumer Electronics Association. Three years ago, those sales were too small to track, the association said.

Ninety percent of Sam’s electronics come from six big companies including Samsung Electronics Co. and Apple Inc., a spokeswoman for the retailer said. The retailer hopes that drones, like flat screen TVs and computers in years past, will appeal to shoppers looking for a holiday gift that makes a big splash.

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Sam’s found the $1,169 DJI Phantom Vision 2+, made by SZ DJI Technology Co., as part of an event that gives smaller companies 30 minutes to pitch their products. The company put the drone on its website, which it often uses to test interest in new products, Ms. VonBechmann said.

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