Dell to open retail stores

“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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76 Comments

  1. This does not seem possible.

    It is gateway all over again. Dell is just a big box assembler. They add no value as a reseller except that you can get everything from one place and it all looks kinda the same so your office looks nice.

    But WHY would you go into the store and order a PC online? Because you need help configuring it? Please – phone reps can do that. Because you want to see the difference between a 17″ and 24″ monitor? You can go to Best Buy or order it and return it.

    This is going to have a marginal impact on sales and a MASSIVE impact on operating losses!

  2. We’re opening the stores with a differenct philosophy than the Apple retail stores. They’re at snooty high-class malls and use amazing and expensive architecture.

    We’re going to be more down-to-earth. And placement will be more appropriate for our clientelle. They’ll be placed next to Wal Marts and Dollar Stores. That way we’ll the the foot trafic for people who only care about price.

    We may only make .02 percent on the dollar instead of 30 percent like apple, but while we lose a few bucks on each computer, we make up for it in volume!

    MD

  3. The mall near me is undergoing some heavy renovation and building (somehow, they’re adding a second story without keeping people out of the first for the most part). Anyway, the mall is at the moment a huge mess; stores changing around every week, different “road” blocks up, and such.

    But one thing I noticed was that there’s a Dell kiosk at the end of the mall with no stores or anything. Nobody goes near it (there isn’t even a person to overlook the place!) and it just looks downright ugly- trying to look classy with is fake wood and metal, when it knows perfectly well that it blows and its only a matter of time before they get the boot because they’re dead weight. It’s a mess.

    I hope Apple sees this mall as a possible store location when the mall is finished. It would also save me an hour to go to the next nearest store.

    MW: Dell is shitty inside and out.

  4. I cant imagine going into a store to order something I cant have for a week, which would arrive at my house anyways!? There is no point to these Dell/Dull outlets even existing. They don’t even need the brand recognition of having a store, sinse everyone knows who the comapny is – as the discount computer maker. It’s about as stupid as M$ opening their own stores. In Apple’s case, it makes sense to have a retail presence in the form of their own branded-stores.

    I hope Apple’s market share grows hugely, as they well deserve it.

    M$, on the other hand, seem like thieves.

  5. Dell can open all the stores they want. I have a Dell laptop and desktop I don’t turnon, unless there is something I need to do for work, that only a Windows PC will do.

    I have a 15″ G4 laptop and and 12″ G4 laptop (now handed down to my wife)… that we use 99% of the time. Soon to add an Intel Mac. Sales channels are note Dells problem. Dell is the problem. India based customer service, over priced PC’s, and no inovation – that is Dells problem.

    A reconverted Mac user – flips the big bird to Dell.

  6. Signs of desperation? I love it that after a non stop news weekend about Apple’s cube store, Dell decides to do a “me too” with this retail store business. Aboslutely not the kind of company I wan’t to buy from…

  7. Is this a joke? What makes Dell believe it will have a different experience than Gateway. Apple has some amazing and unique products that people want to “touch and feel” in person. Apple creates an entertaining shopping experience to display those products. (And you can even pay for those products and walk out the door with your purchase, because it is a STORE, afterall.)

    That’s why people line up at Apple Store openings; because they are events. I hope someone remembers these Dell Store openings, and posts pictures of the “crowd” in attendance. It should be about as exciting as a new Radio Shack opening.

  8. Too funny to made up. ” width=”19″ height=”19″ alt=”LOL” style=”border:0;” />

    Can’t you just see “Dell Pilgrims camping out overnight to be among the first to go into the new Hell retail Store?

    Are they going to have a <b>”Moron Bar”</i>
    ” width=”19″ height=”19″ alt=”raspberry” style=”border:0;” />

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