Dell to close its U.S. stores
Dell is abruptly abandoning its Dell Direct Store effort, saying customers now have other ways to get their hands on the company's products.
The computer maker said Wednesday that it will close all 140 of its U.S. kiosks as part of the company's ongoing shift in how it sells its products. The company launched the kiosk effort in 2002 as a way for customers to see products firsthand before ordering online or by phone.
"In the past six months the company has adopted a retail strategy that enables Dell to connect with customers it has not necessarily reached in the past," the company said in a statement.
Dell spokesman Bob Kaufman said the company plans to close the kiosks, the majority of which are in malls and shopping centers, in a matter of days. Kaufman declined to say how many workers are losing their jobs, or the cost to Dell of ending the effort, but said that affected workers would receive severance and outplacement assistance.
The company is not closing its kiosks outside the U.S. In recent months, the company has moved its products into a number of retailers, most notably Best Buy, but also Wal-Mart Stores and Staples.
"Moving into retail is a prime example of Dell listening to its customers," said Tony Weiss, vice president for Dell's Global Consumer business, in a statement. "Ever since we began our journey into retail, we wanted to give customers the opportunity to call, click, or visit Dell and have access to our award-winning products. This move fits in with how our broad global retail strategy is evolving."
The move follows a similar one several years back by Gateway, which had built up a larger network of stores, but closed them as it acquired retail specialist eMachines and started selling more broadly in stores. Gateway has since been acquired by Acer.
During her years at CNET News, Ina Fried has changed beats several times, changed genders once, and covered both of the Pirates of Silicon Valley. These days, most of her attention is focused on Microsoft. E-mail Ina. 
What I have bought from is the Zoom kiosks at the airport and it was ipod related stuff.
efforts at retail stores. I can see why the "analysts" predicted
failure for Apple's effort too. But then the "analysts have never
understood Apple in the first place so no one is surprised they
were wrong and Apple's retail stores are tremendous successes.
With it's reputation for quality and customer service in tatters
we'll see how Dell stacks up against HP, Compaq, eMachines and
others on the Best Buy sales floor. Should be interesting.
Had Dell or Gateway kept an inventory of new PCs, and gave the system to the customer the same day they paid for it, they might have kept their stores open. They didn't want to run the risk of eating the costs of systems they couldn't sell, so they only sold systems that took two weeks to ship from the factory to the customer's house.
Trust me it makes a big difference, people want instant gratification, and don't want to wait two weeks to get what they paid for.
Gateway tried the Retail Store before anyone else, and failed.
Why? No product to hand over to the customer...just a shipping
notification and "You should get it in a few days"
Apple does it, has product IN the store, and hands you what you
paid after the sale and it works well. Why? Because people don't
like being handed a receipt and a tracking # in return for their
hard-earned money--there's no "instant gratification" there.
Dell tries it...hands over the same receipt and order/tracking #
as Gateway, and fails. Why? Same reason Gateway failed.
I'm not praising or saying that Apple is the end-all-be-all of
computer retailing, but "they" knew as one of the smaller PC
(Personal Computer) houses that they needed a strategy that
would not only work, but work well and be profitable. Gateway
thought it could get by w/ a few computers atop hay bails and
failed miserably.
Those who forget history are doomed to repeat it, and business
is no exception. Whatever Apple is (or isn't), they at least hired
smart ppl to build the retail stores. In fact, if memory serves me
correctly, the "Genius Bar" was not liked by Jobs but invented by
Ron Johnson (Mr. Gap himself) and was touted as not only a
sales store, but service as well--it worked, and worked better
than anyone had expected.
I hope this thread doesn't get into a "Dell is crap..." or "Apple
rocks" or "Apple Sucks!" type of discussion, but let's call a spade
a spade and say Dell is not Apple, and Apple sure as hell isn't
Dell or Gateway right now.
I think Wal*Mart is an excellent idea for Dell and they should do
very well in there. Wal*Mart will move a LOT of PCs in the sub-
$800 market for people who are your typical Wal*Mart shopper
($40k and under).
Also, I think Vista is the biggest problem for PC makers, not
Apple.
Customers do want their computer the same day they paid for it, and don't want to wait the two weeks for shipping. All the Dell Kiosk store ever was would be a meeting place to use a public computer to order a mail order PC. People get annoyed because they can just order a Dell PC at home and avoid going to the Kiosk store. Most of the costs of a business are the inventory they keep, and when you sell computers they can depreciate really fast in price. So keeping 100 systems in inventory for six months will end up in losing half the value they were worth six months ago as new systems come out to replace them. Nobody wants to buy a new system that was bleeding tech six months ago, when for the same price they can buy a much newer and much better system. It is called the Osborne Effect, because Osborne computers couldn't sell very many Osborne 1 computers, when the Osborne 2 was announced and everyone waited for the Osborne 2 and avoided buying the Osborne 1, causing Osborne to go out of business due to excess inventory of Osborne 1 computers that cut into their revenue. That is why Apple, et all, now avoids announcing new systems in advance and sues rumor sites that leak info on new systems to avoid losing a lot of revenue as people avoid buying the current systems, waiting for the new systems to come out.
Best Buy can sell Dell computers, as can Wal Mart, Sam's Club, Costco, K-Mart, Sears, Target, Circuit City, or anyone else who wants to stock Dell computers in their inventory for sale to the public.
I would have thought they kept stock nearby but no it was just a show and tell kiosk nothing more.
Bob Kaufman is right, partnerships with retail consumer electronic stores are the way to go, instead of operating Kiosk Mall stores. Way to go cousin!
Dell needs to offer more than just Windows based PCs, they need to offer Linux as an alternative to Windows for customers who want a different OS to be installed on their Dell PC. Dell needs to partner up with Linspire or contribute to Ubuntu to get a Dell flavor of Ubuntu that has Dell driver support built into the distro. Maybe a Dellbuntu is needed?
http://www.dell.com/content/topics/segtopic.aspx/ubuntu?c=us&cs=19&l=en&s=dhs&dgc=EM&cid=21690&lid=511380
Other companies try to cut corners by spend less money on the design, software, materials, and/or advertising. As a result their products could not compete with ipods.
SanDisk has a very nice set of players that cost half of what an iPod costs and is non-propietary.
Dell's severance package was two months pay and a kick in the ass.
The thing that I don't get is that while it's easier for customers to get them in Best Buy and Staples....nobody is selling Dell service. The kiosks were profitable...I don't get why Dell closed them down.
Dell never took the kiosks seriously anyway.
"Dell's severance package was two months pay and a kick in the ass."
That's the same way they treat their customers but without the severance pay.
Dell will ultimately start closing the Round Rock manufacturing too, you watch!
They will push the manufacturing offshore where they don't have to pay benefits or a decent salary.
Mark my words, short of the servers and possibly the Optiplex line it's going offshore.
I truly am sorry at the way you lost your job too that is just COLD!
heard tell of them selling a damn thing.
One thing is that their machines are junk and second is the OS
on them is junk too.
Might as well close the doors and give the share holders back
their money.
I do feel badly for the people who lost their jobs though.
There's always a need for people at the Apple Store!
I think this was a smart move on Dells' part. You can walk into a Best Buy and try out a Dell. You can buy a Dell at the store. If your Dell breaks, you go to Best Buy to get it repaired. That doesn't happen at a Kiosk.
And to ladiesmanwc - a 2 month severance package is not too shabby. You can sit on your fanny for 2 months and plan your next move. If you worked at any other shop in the mall and they closed, you wouldn't get any type of deal like that.
It was funny though - I walked into the Mall today and noticed the Dell stand was gone. I'll miss avoiding it....
I always thought of those stands and stores destine to go out of business anyway because they were too cheap to buy a store front.
Dell simply offers too many different styles of computers to make even a small store realistic. Apple has 13 computers in their entire line up and the boxes are usually similar
in volume to a printer box. Dell however offers 14 computers just in their home-use category. Add in a small selection for small business, monitors, TVs, etc. and you're
talking about a burdensome inventory that would take more room to store than feasible with most small-scale mall stores.
Dell would be better suited by reducing its offerings and buying retail space from big-box retailers and staffing it themselves where they could show off their tech. It'd sure
beat the hell out of placing Dells around the multitude of barely working PCs that litter the Best Buy computer section.
You can do some amazing things with computers these days, but no one has innovative displays.
While Dell definitely has a lot more variety than Apple I don't know how you came up with 13 computers in the Apple lineup. I came up with 15 standard configs without even going to Apple.com(8 laptop configs & 7 desktop configs). Furthermore, a lot of people buying the Mac Pro are going to get a higher end configuration. I know someone who spend over $4000 even after education discount! The typical Apple Store I have found shows a lot more than 15 computers because they want customers to see some (obviously not all) of the custom configurations. If Dell really wanted they could do retail stores just like Apple and probably demo and even carry most of the most common requested models in store. They obviously couldn't show everything, but in the typical size of an AppleStore they could show off virtually all of the consumer computer models plus a few of the more popular small business models. They wouldn't have space for countless server configurations or televisions, but I can say I only ever saw a Xserv at an AppleStore once and this was at least 2-3 years ago when Apple's retail stores weren't nearly as common.
The main reason Dell is doing stores is because unlike Apple they seem to do a better job of getting their computers in retail stores(Walmart, BestBuy, and Staples). In less than six months they have gotten Dell into more stores than Apple managed in about 7 years of trying. Apple's reseller agreement is so arrogant and slanted towards Apple it is little wonder that Apple doesn't have more resellers. Probably the most important reason that Dell isn't doing their own full blown stores is that selling a Dell is pretty similar to selling any other windows machine. Selling a mac requires that you usually know something about MacOS unless you are selling to someone who already owns a mac. Since BestBuy and Circuit City pay their salespeople so little they typical get twenty somethings desperate for some beer money who barely understand what they are even selling. While Apple Store employees aren't always stocked with a Genius even at the so-called Genius bar at least Apple Store employees don't tend to talk down the products. They are more than willing to show you what the product is capable. Dell doesn't really need that.
- by raymundr August 30, 2008 8:58 AM PDT
- I have been a Dell customer for the past six years and they have been delivring all our computers in a weeks time, the longest wait is two weeks. Just yesterday August 29,2008 when I ordered a laptap for my son and asked for a two business day delivery because of his urgent need, after paying with my preferred account, they sent me a confirmation stating that the delivery would be on October 7, 2008 which is a months long waiting time.
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(28 Comments)Dell should anticipate allot of orders with all their promos and should be able to coupe up with its production and delivery, if not then they will be loosing their customers right away.
We just don't buy computers for games but most of the time for work and for our children to help them in school.
Apple has a store that we can buy immediately and take home on the same day.
If Dell will not change their strategy on selling computers, I will rather shift all our computers to Apple.