Will Dell’s retail computer stores work sans inventory?

“Dell Inc. has always prided itself on its online-only business model, the core component of a lean corporate structure that, for years, allowed the company to underprice and take sales away from its competitors,” Mike Musgrove reports for The Washington Post. “So it came as some surprise last week after the world’s largest computer maker, which has started to lose some ground in the marketplace, said it will open two stores, in shopping malls in Dallas and West Nyack, N.Y. These stores, however, aren’t typical cash-and-carry retail outlets. Visitors who decide they want Dell products will still have to go online and buy them through the company’s Web site.”

“It’s an approach to the retail market that has caused some chuckles among Silicon Valley types. Tech pundit Tim Bajarin said retail shoppers prefer the sort of instant gratification that comes from walking out of a store with a heavy shopping bag. ‘How would you feel if you went into a flower store to buy flowers and couldn’t walk out with them?’ Bajarin said,” Musgrove reports. “The move is an extension of the company’s 160 kiosks in malls and airports, which the company calls Dell Direct Stores. Dell hasn’t determined whether tech support will be available to customers through the two locations. IDC analyst Matt Eastwood called the stores ‘a classic Dell experiment. One area where Dell has been really struggling is in the consumer space, and this is definitely a response to that,” he said. “But I don’t know how you can run a retail store without carrying some inventory.'”

Full article here.

[Thanks to MacDailyNews Reader “Tommy Boy” for the link.]

MacDailyNews Take: This classic Dell experiment has “failure” stamped all over it.

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Related articles:
Dell to open retail stores – May 22, 2006


  1. The two things that really work for Apple retail are:

    1. Customers can take home their purchases.
    2. Customers can get repairs done and talk to geniuses on site..

    Dell, has decided to forego both of those options.. They will fail.

  2. Lets see how many people line up before those two train wrecks open.
    Retail is hard, and why go out to buy something you cant take home.
    Just buy your Dell’s online you know what it looks like, no need for a test drive on those boring boxes.
    ” I need a Dell honey lets pack up the SUV and kids find a mall parking space and go order one online at theDell store ! “

  3. I honestly don’t get it. Didn’t Gateway prove that it does not work? Why go to a Dell Store and look at just Dell computers when you can go to a (insert big box store name here) and look at a whole variety of vendors.

    Dell will not succeed because of their own doing. They made the computer a commodity item. What makes a boring beige or black Dell any different than an HP and why would I need to go look at one. They all do the same thing running the same software. What has Dell done to stand out?

    Apple Stores work because people are interested in the unique features of the hardware and people want a hands on experience.

    Who needs to goto a store to see a run-of-the-mill, commodity PC?

  4. Right. All I’ve read is the headline.

    No. They won’t work.

    It’s a stupid idea. Maybe, just maybe, if they can order one day and pick up a fully configured machine a couple of days later, then it could work.

    Tesco in the UK is about to launch a section in its largerst supermarkets to sell ACER/HP PCs etc. Their buying power will rival Dell’s (£1 in every £8 spent in the UK goes to Tesco), so here certainly, it would be a case of picking one up with the bread and milk, or having order by phone, online or at an inconvenient store and then take a day off waiting for delivery.

    There is one area in which Apple fails in its stores. That is to have a small display to sell alongside the mini. They should either make a 15″ and 17″ display or stock another quality brand at those sizes. Even sell them ONLY with a mini and make only a modest profit on them.

  5. Most people go to the store so they can walk out with something in their hands. If a person is determined to purchase a PC they are not going to go to the mall so they can order one. Wouldn’t they just go to the Best Buy, Circuit City, or (insert other store here) and pick up a PC that they can take home with them today. Even Gateway learned this mistake the hard way and now you can walk out of best buy with one of their systems in hand.

  6. Potential customers who go and see the real thing will discover how tatty the product is and will subsequently NEVER buy Dell.

    For Apple it’s the reverse. People go into an Apple store, see how fantastic they are, and walk out with one even when they never intended to!

    Not a clever move Dell.

  7. um…. no.

    Mmmm, sure miss those Gateway stores. I remember my pre-mac days. Tooling around a Gateway store, shopping for a few PC’s for work. I go to order them at the desk and ask where should I pull my truck up to load them. That’s when I learn that they’ll be delivered in 2 weeks.

    So I left.

    I think events like this will be happening by the thousands in the Dell stores.

  8. …now relax everyone of course if anyone knows me they know that i will copy Apple’s retail store strategy & even its look, but i have to kind of use decoy to save some face for now you know… I’m burnin bad sitting here & watch Steve’s stores growing fast…

  9. The logic is not to get someone to drive to the mall to order online but to attempt to capture some of the people that are already at the mall. That part is reasonably sound. It is the lack of merchandise that will doom the stores to failure — let’s hope they open many.

  10. Here is what I think Dell Store will look like:

    Very dark. A bunch of black boxes. Very dark. Cool neon blue lights popping out of everywhere. Blacklights? Still, very dark.

    Either way, It’s going to be hard to find a salesperson to help you. The “help” will usually be busy “helping” other customers navigate the dell.com site: figuring out which options they need (3yr Onsite? or 4yr Next-day? warranty), where to find the special deals/coupons, Excuse me sir, why is my order not showing up in “my cart”?, Huh? The site lost my “e-quote”? I have to do this over the phone?, etc.

    Anyone think these “retail stores” will go beyond the first 2 stores?

  11. They better not have Genius bars. There will be lines around the block with people hauling in their POS equipment.

    On second thought, lets encourage them TO open a Genius bar!

    MW: trade. “I’d like to trade this in for an iMac, please”

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