Business Tech

Dell has been back in the retail game for two years now, but there are still a few kinks being ironed out.

Some Dell customers are reporting serious confusion over the process of registering a new PC and signing up for the free Windows 7 upgrade. Dell's earlier announced policy is that PCs purchased after June 29, 2009 will be granted a free update when Microsoft's newest operating system arrives in October.

But since that date, some reported that when they go to register their new PC (purchased after June 29) from third-party retailers like Best Buy and MicroCenter, the date of purchase appears much earlier than the day the customer made the purchase. Instead, the date that appears in many cases is the day that Dell sold the computer to the retailer, sometimes weeks--or months--earlier.

One customer from Florida, Richard Lurton, who ordered a Dell Inspiron 15 notebook, went back and forth with Dell customer service, only to be told that the date the retailer purchases the computer is the date that matters.

Similar complaints were received by Best Buy, which acknowledged the problem and established a special message board for the topic. The support forums on Dell's own Web site show customers who bought Dell computers at Best Buy and retailer MicroCenter also having difficulty registering for the Windows 7 upgrade.

Dell acknowledged the company knows about the problem and is currently taking steps to resolve it. There is a page set up for retail customers where they can change the purchase date from the retailer's purchase date to the customer's purchase date.

Regarding customer service employees who were erroneously telling customers that the retailer's purchase date determined upgrade eligibility, Dell spokesman Bob Kaufman said that over the last two weeks, "customer care has received updated information and it is now handling calls appropriately."

Those still experiencing this problem can call Dell customer service.

Though presumed to be dead since it went bankrupt more than a year ago, CompUSA is showing signs of life.

As Wired noted in a post Thursday, there are 30 new retail outlets bearing the CompUSA name in the U.S. that are trying a new retail strategy that includes computers available for customers to do price matching on the Web sites of CompUSA's competitors.

Gilbert Fiorentino, chief executive of the Technology Products Group at Systemax, the company that bought CompUSA, told Wired: "We have invented this idea of retail 2.0...Every screen in every CompUSA store is now connected to the Internet and making buying a richer experience for customers."

While it's unclear whether it's going to be successful, it can't be any worse than its previous strategy, which found the once venerable electronics retailer in bankruptcyin December 2007.

At the time, the company was struggling with competition from rivals Best Buy and Circuit City, but Circuit City met a similar fate right before last year's big holiday shopping season and was forced to file for bankruptcy protection. (Earlier this year, the retailer shut its doors.) Circuit City's fall was due to pressure from online retail outlets like Amazon.com and NewEgg.com, but also the sudden economic collapse and resulting credit crunch. Don't look for Circuit City 2.0 though. It's clear to most retailers, including apparently CompUSA, that the future of retail electronics is focused in the direction of the Web.

Best Buy President and Chief Operating Officer Brian Dunn is set to be promoted to CEO this summer, when current Chief Executive Brad Anderson retires, the company announced Wednesday.

Anderson, who's led Best Buy for seven years, plans to retire from the electronics retailer at the company's annual meeting in June. He'll keep his position as vice chairman of the board of directors in order to help with the transition.

Dunn began his career at Best Buy as a store associate 23 years ago, rising through the company's ranks to become president and COO in 2006. He has been responsible for the company's 1,000 retail outlets in the United States, as well as its Geek Squad repair and installation services unit.

Best Buy is the largest consumer electronics retailer in the United States, and it has stores in 13 countries. It lost a major rival last week, when Circuit City, the second-largest electronics seller, was forced to liquidate all stores.

Although Best Buy has done comparatively well, it hasn't been unaffected by the current recession. Third-quarter revenue in 2008 dropped 77 percent from the year before, prompting the company to offer buyouts to nearly all corporate employees.

After exploring other options, Circuit City said Friday it will begin liquidating all remaining stores.

Circuit City calls it quits.

(Credit: Circuit City)

About 30,000 employees face layoffs as the rest of its 567 stores are closed. The fates of outstanding warranties, its Firedog repair service, and Canadian stores are still to be determined, according to the company.

The nation's second-largest consumer electronics retailer filed for bankruptcy in November and initially closed 155 retail outlets in an attempt to get its roughly $2 billion debt under control. Just a week ago, Circuity City announced it was in talks for a sale with two "highly interested" parties. After the talks broke down, the company said, it had no choice but to liquidate all remaining merchandise and shut its doors.

"We are extremely disappointed by this outcome. The company had been in continuous negotiations regarding a going concern transaction. Regrettably for the more than 30,000 employees of Circuit City and our loyal customers, we were unable to reach an agreement with our creditors and lenders to structure a going-concern transaction in the limited timeframe available, and so this is the only possible path for our company," James Marcum, acting president and chief executive officer for Circuit City, said in a statement.

The disappointing, recession-weakened holiday season likely sealed the retailer's fate, although the real problems began before the economic downturn. The retailer had posted several huge losses late 2007 and early 2008, but the rash of bank failures in September and October proved disastrous for it.

The resulting global credit crunch hit Circuit City hard. The retailer buys TVs, stereos, laptops, and other gadgets on credit, usually at a good rate from vendors with the promise to pay them back once the company sells the goods in its stores. But as the company racked up huge losses, and credit became suddenly more expensive, vendors stopped giving Circuit City reasonable financing rates.

Here's a little statistical cheer for online retailers bracing themselves for what many have been predicting will be a dismal holiday sales season.

The latest online retail spending report released Tuesday by ComScore shows that consumers last weekend spent almost double what they spent on the corresponding weekend before Christmas last year. U.S. consumers online spent $677 million last weekend, December 20 and 21, compared to $341 million the weekend before Christmas in 2007, which was December 22 and 23.

It should be noted, however, that there are five fewer days this year between Thanksgiving and Christmas, making it harder to make perfect year-to-year comparisons. For example, the $677 million in sales last weekend--which was also the fourth weekend after Thanksgiving--is actually down 17 percent from last year's corresponding fourth weekend after Thanksgiving, December 15 and 16.

Whether you see the glass half full or half empty, the statistics suggest "that many consumers opted for the cozier confines of online shopping rather than having to brave the severe cold and snowstorms affecting much of the northern half of the country," ComScore Chairman Gian Fulgoni said in a statement. He added that the compressed shopping season probably resulted in some consumers buying online later than they did last year.

Regardless, the report is further evidence that holiday sales aren't a total disaster and might even be holding their own, which is no small feat in the throes of a recession. U.S. online spending to date this holiday season (from November 1 to December 21) totals $24.71 billion, down 1 percent from the corresponding timeframe last year.

Considering we're in the throes of a recession, online holiday sales appear to be generally holding their own.

(Credit: ComScore)

Visitors to e-commerce sites spent $846 million on Monday, an increase of 15 percent over the same day a year ago, according to ComScore.

Monday, referred to as Cyber Monday by online retailers, capped off a successful Thanksgiving holiday weekend for the industry, which overall saw spending jump 13 percent.

It's a welcome relief for an industry that was mostly bracing for the worst.

"Consumers are clearly responding positively to retailers' aggressive online discounts," ComScore Chairman Gian Fulgoni said in a statement. "With Cyber Monday promotions beginning in earnest over the Thanksgiving weekend, consumers have finally begun to open their wallets, setting off a streak of four consecutive days of extremely strong growth..."

ComScore ranks the $846 million spent Monday as the second-biggest day of online shopping ever. That should be encouraging to retailers, since typically Cyber Monday isn't the biggest spike in online sales for the holiday season, just the first, according to retail analysts.

It also comes on the heels of a better-than-expected Black Friday shopping day, so the retail picture this holiday may not be quite as dreary as expected. What remains to be seen, however, is whether retailers were able to draw any sort of profit after the aggressive promotions that clearly attracted shoppers.

Black Friday wasn't as disastrous as many feared (except, of course, for the poor Wal-Mart employee trampled to death by impatient shoppers).

As far as sales go, overall, the retail industry did get a slight boost. The National Retail Federation counted 172 million shoppers visiting Web sites and brick-and-mortar stores between Thanksgiving and the following Sunday, which is up from 147 million last year. In total, the NRF expects holiday sales to rise 2.2 percent this year to $470.4 billion.

But it's tough to say whether today, known as Cyber Monday, will prove as promising for retailers. In fact, this has been one of the hardest holiday sales seasons to predict in years, according to retail analysts, since the current economic recession is wreaking havoc on consumer confidence.

Cyber Monday is traditionally the day online retailers push as the best day for holiday deals. So far, analysts are mixed as to what to expect when the last order is placed at midnight tonight.

"We certainly saw Black Friday had some surprising bright spots. But we saw buying start to fall off Saturday and Sunday," said John Squire, chief strategy officer for online retail tracking service Coremetrics. "We're going to hesitate in suggesting Cyber Monday will be as shiny as Black Friday."

Early Monday, traffic to the retail Web sites his company follows and the number of orders placed or started were down 10 percent compared with the same time last year, Squire said. Of course, he cautioned, the day is not over. The final tally won't be ready until Tuesday.

Cyber Monday has typically proved to be an accurate measure of the overall shopping season, according to ComScore. Though individual year-over-year growth rates for online spending each day varies throughout the holiday sales season, during the past few years Cyber Monday has been within a few percentage points of the final holiday season growth rate.

But many people have already done their shopping online. ComScore on Sunday reported that online, nontravel retail sales on the Friday after Thanksgiving reached $534 million. That's up from the same day a year ago, but just barely--online retail sales rose just 1 percent, from $531 million.

So will online shoppers come out again and respond to the aggressive deals being offered today? Again, it's tough to say due to the volatile economy, and the competing influences on consumer spending, Gian Fulgoni, chairman of ComScore, said in a statement.

But even if Cyber Monday doesn't bring in the sales retailers were hoping for, all is not lost. Typically, while the Monday after Thanksgiving produces the first sales spike for online sales, it's not the biggest spike.

That will likely be two weeks from today, Monday, December 15, according to Ken Cassar, an analyst with Nielsen Online.

For the past three years, the third Monday following Thanksgiving was the function of two factors. "It's a Monday, and Mondays are the most heavily trafficked days of the week as people get back to work. And it's the Monday that's closest to Christmas without being dangerously close as far as shipping goes," he said.

Overall, the calendar could actually be the industry's ally for the rest of this year.

Though Thanksgiving was later this year, Christmas will fall on a Thursday, which gives consumers two more days of online shopping with guaranteed shipping this year than last, when Christmas was on a Tuesday.

Because of that, Squire of Coremetrics says that in addition to December 15, the following Tuesday and Wednesday will be big days too, since those often offer the last chance for free shipping from retailers.

"That's usually the last big spike of online buying," he said. "Expectations are we'll see that again."

But how big of a spike is relative. Patrick Byrne, CEO of Overstock.com, said Black Friday provided a welcome bump in sales from what had been shaping up to be a "weak" November for his company. But Cyber Monday and beyond should be better.

At Overstock.com, Byrne said, "We'll be happy if we end up anywhere near zero percent growth."

Update, Monday 7:08 a.m. PST: Added information on Wal-Mart's Black Friday deals.

Usually Black Friday is a good time of year for consumers and retailers. It's when retailers get "in the black" by getting rid of a lot of excess inventory through offering drastic discounts.

This year is different. The economy has crumbled, consumers plan on spending less, and at least for those shopping for electronics, there are fewer viable options with many Circuit City stores set to close.

Some bargain hunters have complained that, so far, they haven't seen as many great deals as they're used to this time of year as the circular Black Friday ads for major retailers get leaked ahead of time.

CNET News caught up with some retail and Black Friday specialists to ask them if and where good deals can be found this season.

For electronics, the best deals may not be found at the Best Buys and Wal-Marts of the world this year, says Daniel de Grandpre, CEO of Dealnews, a bargain-tracking site. He recommends regional competitors to the international chains. "Look towards MicroCenter, Fry's Electronics, Meijer, and others for better Black Friday deals. MicroCenter's weekend sale has some outstanding deals."

There will also be great deals on the Web. Not just online-only retailers like Newegg.com and Amazon.com, but the Web sites of your favorite stores, too. All major retailers with Web stores maintain different inventories for their brick-and-mortar and online outlets, and will try to entice customers with "Web only" discounts.

A lot more sites will be enticing consumers with offers of free shipping this year. "Free shipping will be prevalent," as will specials on gift cards or offers of no sales tax, according to John Squire, chief strategy officer for Coremetrics, which tracks online retail sales. Also look for more online coupons and "minimum basket values," which are free goods or other enticements if you spend a certain amount of money.

Despite all of this, uncertainty is rampant among retailers.

"In the past, these things were a lot easier to predict than this year," said Squire of Coremetrics. In years past, holiday sales were generally up 20 percent on Black Friday and the following Monday, and the top sales day has been easy to pinpoint as December 9.

"But since the drop of the stock market and complete falloff in consumer spending in October...it's hard to give distinct numbers for Black Friday or Cyber Monday this year."

But that doesn't mean holiday discounts won't be as generous this year. Dealnews' de Grandpre says being less aggressive on prices this year would be a risky strategy.

"Shoppers are savvier than ever. They have access to far more information than ever," by doing advance comparison shopping with Black Friday tracking sites, he said. "If a retailer doesn't offer a suitable 'doorbuster' to drive traffic to its stores, buyers will look for someone else who does."

Some retailers are doing Black Friday month specials, rather than confining their deep discounts to just the day following Thanksgiving.

Black Friday "is the best single day for bargains, without question. However, there are Black Friday-like deals happening now," according to de Grandpre. "(Beginning in October), we've already seen a Blu-ray player for $170 with $70 in free Blu-ray movies--akin to getting the player for $100. We've also seen a 42-inch 720p LCD HDTV for $600, and a Kingston 32GB USB Flash Drive for $30, both with free shipping."

Kmart, for example, officially started offering "Early Black Friday" deals on November 2 (registration required), in an attempt to entice buyers who are expected to be more conservative about their spending this holiday.

Still, the long Thanksgiving weekend is a key one for retailers looking to lure consumers in droves. On Monday, for instance, Wal-Mart touted its "three days of Black Friday," which it's kicking off with online deals starting Thursday ahead of in-store offerings Friday and Saturday.

The Consumer Electronics Association says consumers it's polled this year plan to spend $200 less on the holidays, and retailers were bracing early for reduced demand this season.

Clearly, buying will be down across the board for the holiday season, said Squire of CoreMetrics. The key is retailers being able to deliver the right mix of merchandise that price-conscious consumers want.

"For merchandisers that have a broad selection, and ones they can change around, they're going to do really well," he said. "Those that have erred on the side of luxury goods will struggle."

Consumer spending on e-commerce sites grew just 1 percent during October compared with the same month a year ago, according to ComScore.

In fact, last month was the worst growth month for online retail spending since ComScore began keeping track in 2001.

Rising prices and unemployment rates, and the psychological impact of the chaos of the financial markets are to blame, according to ComScore Chairman Gian Fulgoni.

But the dip in spending can't be too much of a shock to those who watch ComScore's monthly reports carefully. The preceding six months featured declining growth rates--April saw 15 percent growth, and by August spending online had increased just 8 percent.

Spending has dropped off the most for households that make below $50,000 per year, according to ComScore's figures. From August to October this year, their spending dropped 3 percent compared with the same period last year. For households making between $50,000 and $100,000, their spending increased 1 percent. Households making more than $100,000 increased their spending during that time by 14 percent.

Retailers both online and off are fretting how the economic downturn will affect this year's holiday sales. E-commerce giants Amazon.com and eBay both offered dim holiday outlooks during their third-quarter earnings reports.

In response, earlier this month ComScore recommended that online retailers should seriously consider generous coupon offers and free shipping to encourage consumers to spend in the coming months.