RSSDell Testing Retail Store Concept
By Ed Oswald | Published May 24, 2006, 12:45 PM
Dell plans to open up two brick-and-mortar locations in a pilot program to test the retail waters later this year, the company says. But don't expect it to be like an Apple store -- all orders would still be placed through the phone and Web.
The company has already made a small retail appearance through the opening of kiosks in about 160 shopping malls across the country. The Dell stores would build upon that approach, allowing for a more traditional store layout and a broader selection of products for customers to test.
The first stores will open in Dallas and West Nyack, N.Y., near New York City. Orders would still be placed at kiosks and over the phone from within those stores.
It is unclear as to when the company plans to expand the full-store strategy to more locations. However, the move does show a willingness by Dell to begin looking into new ways of keeping the company financially sound.
Last quarter, Dell saw an 18 percent drop in profits, with sluggish revenue growth. Since then, the company has made a variety of announcements, including its planned inclusion of AMD processors in what seems to be an effort to generate growth in its core businesses.
A retail presence has gone both ways for other computer manufacturers. While Gateway's retail presence hurt the company in the long run, for HP it generates nearly 60 percent of its sales. It should be noted, however, that the two had widely different retail strategies.
Apple's retail business, meanwhile, continues to boom. The company last week opened a 24-hour store in the heart of Manhattan on 5th Avenue.
It is to soon to tell if the apple or dell retail store concept will succeed. The only comparable model was gateway and after a number of years those stores closed and were a failure. So give both a few years and then comment.
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|Sounds like a Gateway moment
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|ahh, West Nyack, NY is not that near NYC-- it's certainly beyond a daily commute in practical terms.
I would welcome Dell retail stores-- what would be awesome is a complete parts/modders'/builders' dedicated store/section by whomever....
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|They are trying to immitate and replicate the phenominal success and business model of the Apple store...BUT
"dont expect it to be like an apple store"?
Are you kidding?
I'll bet that in a year, Dell will have retail stores operating in the exact same business model as Apple. You watch.
Dell can't admit that they got their lunch eaten by the apple retail stores. (before Dell fanboys get their panties in a twist, let me elaborate). Dell sells a lot more volume than Apple (thats proven). But Apple has expanded their brand by providing a "hands on" experience to customers. Steve Jobs was brilliant in the fact that he knew, once people went hands on with a Mac, they would love it. This has been proven by a 400% increase in Apple retail store sales.
Can Dell attract buyers with a hands on experience? Dell has to make somthing unique and innovative before anyone will pay attention to their retail stores.
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|Dell retail store will fail. Apple and Dell are in two different business. Apple's products are high margin product because they have a "niche" market. Dell run a low profit margin business, and they make it up in volume.
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|Brilliant. Good to see someone speaking some business sense in these boards.
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|That's the problem isn't it. Apple is unique where Dell is....well....just another PC manufacturer. If you've seen one, you've seen em all.
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|Except Dell has a few hundred Kiosks in malls around the U.S. and they bring profits to the company. Where is the business analysis now? it's only a few stores for Dell, I hardly think they will fail or drag the company down.
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|this is so stupid. they become so sucessful because they are staying away from retail. now they are getting into retail, what's wrong with them?
the problem that their profit drop is because computers are way too power for today's applications. people will not upgrade their computer if their application still running fast. my p4 2.8 dell from 3+ years ago still kicking and run and play all games out there with the highest setting.
once vista hit the street and people start to adopting it, then demand for pc will increase, until the pc market will be slow
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|I defnitely agree that most people wont upgrade until they need to.
My 1.4GHz AMD Thunderbird runs everything I throw at it.
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|It's now time for Dell to repeat Gateway's mistakes.
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|I'm trying to stop myself... can't resist, try to resist!
What are you throwing at it apart from foreign objects?
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|Exactly what I was about to post.
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|It probably runs Windows Calculator and Notepad just fine, but I doubt it runs any serious multimedia applications very well.
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