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Dell pushes into retail stores

Dell pushes into retail stores

Dell PCs could appear in selected retail stores across Australia later this year.

Last week, the vendor announced a deal with US chain, Wal-Mart, to sell two of its desktop PC models. The partnership kicks off next month.

The machines will be specially selected and priced at less than $US700 each, according to a Wal-Mart statement. The retail giant is also prepping Dell PCs for its Sam's Club and Canadian Wal-Mart stores.

The news follows comments made by newly reinstalled CEO, Michael Dell, about moving into retail locations worldwide. But Dell's local spokesperson kept his cards close to his chest.

"We've nothing additional to announce today for Australia but I think you'll agree this news is consistent with what Michael has been saying recently about direct not being a religion and his taking a fresh look at the business," the spokesperson said.

The move would satisfy customers who simply wanted to buy in a retail environment, the local spokesperson said. "While the vast majority of our consumers will still continue to buy direct from us, they also are asking for additional ways to purchase our products, and so we're testing new ways of reaching them," he said.

Michael Dell first hinted at adopting a channel strategy in a memo to employees in April, just three months after he resumed the title of chief executive.

"The direct model was a revolution. It's not a religion," Dell said in the memo.

Earlier this month, the company fleshed out the plan, saying it would create a more definitive program for solution partners. According to Dell spokesperson, Dwayne Cox, this could involve creating an authorised logo they could use to leverage greater sales.

Cox also acknowledged the vendor could reach new PC buyers by being across more sales points, including an aggressive reach into retail stores, in the next several quarters. Dell's flip on indirect sales has investors wondering what affect it will have on other vendors. HP chief executive, Mark Hurd, declined to comment when stock analysts asked him about Dell's new strategy.

Other analysts are already applauding Dell, although they argue the change was overdue. While the direct sales model was once the force that catapulted the company from its founding in 1984 to the top of the industry, it was now a disadvantage targeting consumer and international markets, American Technology Research analyst, Shaw Wu, said.

"Dell needs to experiment on a grander scale with stores to touch consumers and SMB customers directly, whether it be its own stores, much as Apple has done successfully, and/or HP through Best Buy, Circuit City and CompUSA," Wu said in a report.


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