“Dell Inc. will break its long boycott against retail sales with two stores at shopping malls later this year, but the company said it will remain true to its direct model by having shoppers order products online for delivery,” Dan Zehr reports for The American Statesman. “Dell will open the two stores, each about 3,000 square feet, at the NorthPark Center in Dallas and the Palisades Center in West Nyack, N.Y. The company planned to begin recruiting employees with ads today in local newspapers, said Jim Skelding, director of the pilot program.”
“The Dallas store will open in late summer, and the New York store will open in fall, Skelding said. Dell has dabbled in retail before. It ended an experiment with small outlets at a handful of Sears stores in 2003. The company has 161 kiosks at malls across the country, where customers can see a few products and place orders,” Zehr reports. “But Dell is feeling new heat from rivals, who have been able to capitalize on strong growth in consumer sales because they sell in stores.”
“The new stores are a step toward full-blown retail for a company that has previously said selling in stores is a money-losing strategy,” Zehr reports. “The stores also will sell Dell services, such as home network installation, he said. The company still is working out how to handle tech support questions that existing customers might bring to the store, a spokesman said. Workers at its kiosks put shoppers with service issues in touch with Dell’s existing customer-care staff… Apple Computer Inc. has been storming ahead in the consumer market. Like H-P and Gateway, it sells through retail chains, but much of its recent growth has come from its sleekly designed Apple stores. The company has 133 stores nationwide. The newest one, which opened Friday on Fifth Avenue in New York, will be open 24 hours a day… Each store averages about $20 million in sales per year, said George Whalin, president of Retail Management Consultants in San Marcos, Calif. The stores account for about 17 percent of the company’s $13.9 billion revenue. Apple has stores in the two malls Dell is moving into and a 4,000-square-foot store at Barton Creek Square in Austin.”
MacDailyNews Note: Apple now operates 147 stores, including six in Japan, six in the U.K. and two in Canada.
Zehr continues, “Although Dell’s new stores evoke some comparisons with Apple, they’re more similar to Gateway’s now-defunct chain of Gateway Country Stores. Gateway started out in retail much as Dell is starting now, using only online sales and carrying no inventory at its stores. It expanded beyond that during the holiday shopping season in 2000, when it put products in its outlets for the first time so last-minute shoppers could buy things cash-and-carry. At the time, Gateway had expanded to more than 320 stores nationwide, including one in Austin. But by the time it shuttered the entire chain in April 2004, the gap between it and Dell was as stark as the black and white of Gateway’s logo: Dell’s share of the U.S. personal computer market was 29.5 percent, while Gateway had 7.3 percent, according to IDC, which tracks technology sales. ‘The first thing everyone will say (about Dell) is, ‘It’s Gateway all over again,” said Stephen Baker, vice president of industry analysis at NPD Techworld. ‘Dell is not Gateway: It has a much bigger position in the marketplace and a much stronger brand name.'”
Full article here.
MacDailyNews Take: It’s Gateway all over again. Dell is Gateway. Gateway is Dell. They’re just box assemblers with a third-party operating system from Microsoft. They pay little attention to detail, little attention to design, little attention to the customer’s experience, but devote lots of attention to the bottom line. Dell, Gateway, Lenovo, etc. – name any one, they’re all the same – they’re not trying to innovate or lead or strive to deliver excellence to their customers. They don’t even make the operating system; turn any PC on and they’re all the same mediocre thing. The specific box assembler is virtually meaningless. They’re just assembling a mediocre commodity and trying to out-market each other. If you think that people who don’t work for Dell will line up for Dell store openings days in advance, you’re nuts. Forget about people flying in from Europe for the store; Dell will be lucky if they bother to walk over from the other end of the mall. We hope Dell wastes a crippling amount of capital on this venture. If Dell ceased to exist this afternoon, nobody outside of Dell and DELL shareholders would mourn or even notice. Just plug in the next Windows box assembler, no big deal. Some “choice,” by the way. There is only one true personal computer company left and then there are all the rest, making and marketing bland, inferior, upside-down and backwards Apple Mac knock-offs to a buying public that still don’t really understand what they’re buying.
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