Gateway bows to bricks and mortar

Gateway bows to bricks and mortar

Fresh on the heels of Compaq's pilot retail program, direct vendor Gateway's plan to quietly roll out a chain of showroom-type retail stores doesn't seem to present a major risk to small and medium computer retailers.

But it underlines what many in the channel have suspected for a long time, and was summed up by the vendor's Asia-Pacific managing director, Frank Smilovic: `The retail computer buying experience has not been the greatest.'

Gateway has announced it intends to have seven stores open by the end of the year (ARN November 24, page 14).

When asked how he felt about the prospect of a Gateway or Compaq retail store opening nearby, one retailer replied that he was less concerned about a Compaq than a Gateway store. `Gateway are at least a little more price-competitive, but it depends on what they plan on selling, and what added value they'll deliver,' he said.

`Gateway and Compaq will find that the cost of a retail sale is much higher in the type of stores they're talking about,' said another metropolitan-based VAR. Another medium-sized retailer said that a lot depends on what else the concept stores stock, their software bundles and the add-ons.

But Gateway has already said that the stores will not be stocking anything and that fulfilment will be through its established channels.

`It might be interesting to see what the local impact is on the big retailers that stock other tier-one brands,' another channel-savvy commentator noted.

This is what Gateway appears to be chasing.

According to the vendor, direct online and phone-based sales will be supported by the new retail facilities to touch and feel the products before placing an order.

And this is what the big retailers have had over vendors like Gateway up to now.

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