Sam's Club's Wi-Fi Effort A Dangerous--Although Inevitable--Move

When Wal-Mart's Sam's Club announced Tuesday (August 10) that it planned to have all of its U.S. locations support Wi-Fi for customers by November 2010, it was just the latest in a long line of retail conversions to consumer Wi-Fi. Such moves, although designed to improve the customer experience in-store, have the potential for actually causing the opposite impact.

Sam's Club is touting its Wi-Fi for an unusual purpose: TV sales. The move will allow its customers "greater use of their Wi-Fi-enabled smartphones while shopping and enable associates to demo new IPTVs (Internet TVs). Sam's Club is the first warehouse club to offer live IPTV demos and carry a 1080p broadcast signal. Sam's Club expects to showcase 3D TVs in all locations and online next month," Sam's Club said in a statement.

But if Wi-Fi becomes popular, its in-store speeds could quickly slow to 9,600-baud analog modem level.

Indeed, if Wi-Fi becomes popular, it could quickly become very unpopular. Customers will be annoyed because their smartphones won't work well. And Wal-Mart won't be happy because none of those annoyed customers will buy an IPTV that looks lousy when it's demonstrated.

The security issues--as Franchisee Columnist Todd Michaud reminds us this week with his tale of the Secret Service agent, Wi-Fi and the unhappy restaurant chain--are always a factor with wireless. In this case, though, it's a matter of encouraging consumers to hop on a wireless LAN with other consumers, with virtually no protection from each other. Inviting consumers onto your network psychologically--and potentially legally--means that you'll be blamed for whatever happens to them while they're online.

There's even the unfair blame, such as when consumers pick up a virus on their smartphones and decide to blame your chain's Wi-Fi. It's even more frustrating because such a charge is almost impossible to disprove.