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.

[rnieves1977]

umm.... DUH!

Didn't this happen to gateway a million years ago... you'd think they'd learn that if you didn't have enough additional products outside the PC market (ie, Applestore) you weren't going to be able to sustain a specialty PC store like that... sad really.... PCs should be ordered online... or over the phone.

[groyal]

Who Cares?

The Dell kiosks are as useful as the $3 knock off perfume stands at the airport. <br /><br />What I have bought from is the Zoom kiosks at the airport and it was ipod related stuff.

[lkrupp]

Apple the only one...again?

So first Gateway and now Dell have failed miserably in their <br />efforts at retail stores. I can see why the "analysts" predicted <br />failure for Apple's effort too. But then the "analysts have never <br />understood Apple in the first place so no one is surprised they <br />were wrong and Apple's retail stores are tremendous successes.<br /><br />With it's reputation for quality and customer service in tatters <br />we'll see how Dell stacks up against HP, Compaq, eMachines and <br />others on the Best Buy sales floor. Should be interesting.

[Andy kaufman]

The big difference is that Apple

keeps an inventory of Macs, while Dell and Gateway stores don't keep an inventory and instead ship new systems from the factory.<br /><br />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.<br /><br />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.

[close5828]

Dell isn't Apple

Not to get Apple into this, but look at this historically.<br /><br />Gateway tried the Retail Store before anyone else, and failed. <br />Why? No product to hand over to the customer...just a shipping <br />notification and "You should get it in a few days"<br /><br />Apple does it, has product IN the store, and hands you what you <br />paid after the sale and it works well. Why? Because people don't <br />like being handed a receipt and a tracking # in return for their <br />hard-earned money--there's no "instant gratification" there.<br /><br />Dell tries it...hands over the same receipt and order/tracking # <br />as Gateway, and fails. Why? Same reason Gateway failed.<br /><br />I'm not praising or saying that Apple is the end-all-be-all of <br />computer retailing, but "they" knew as one of the smaller PC <br />(Personal Computer) houses that they needed a strategy that <br />would not only work, but work well and be profitable. Gateway <br />thought it could get by w/ a few computers atop hay bails and <br />failed miserably.<br /><br />Those who forget history are doomed to repeat it, and business <br />is no exception. Whatever Apple is (or isn't), they at least hired <br />smart ppl to build the retail stores. In fact, if memory serves me <br />correctly, the "Genius Bar" was not liked by Jobs but invented by <br />Ron Johnson (Mr. Gap himself) and was touted as not only a <br />sales store, but service as well--it worked, and worked better <br />than anyone had expected.<br /><br />I hope this thread doesn't get into a "Dell is crap..." or "Apple <br />rocks" or "Apple Sucks!" type of discussion, but let's call a spade <br />a spade and say Dell is not Apple, and Apple sure as hell isn't <br />Dell or Gateway right now.<br /><br />I think Wal*Mart is an excellent idea for Dell and they should do <br />very well in there. Wal*Mart will move a LOT of PCs in the sub-<br />$800 market for people who are your typical Wal*Mart shopper <br />($40k and under).<br /><br />Also, I think Vista is the biggest problem for PC makers, not <br />Apple.

[Andy kaufman]

Dell moving to retail stores

I think you will see more Dell systems in retail stores now that the Mall Kiosks are closing down.<br /><br />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.<br /><br />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.

[inachu]

I liked the idea but.

I was really angry that the employee could not take cash at the Kiosks for a laptop.<br /><br />I would have thought they kept stock nearby but no it was just a show and tell kiosk nothing more.

[Andy kaufman]

Dell needs to become more competitive

with other PC makers as well as Apple.<br /><br />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!<br /><br />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?

[skillingssucks]

Have you been sleeping?

Dell Ubuntu:<br /><a class="jive-link-external" href="http://www.dell.com/content/topics/segtopic.aspx/ubuntu?c=us&#38;cs=19&#38;l=en&#38;s=dhs&#38;dgc=EM&#38;cid=21690&#38;lid=511380" target="_newWindow">http://www.dell.com/content/topics/segtopic.aspx/ubuntu?c=us&#38;cs=19&#38;l=en&#38;s=dhs&#38;dgc=EM&#38;cid=21690&#38;lid=511380</a>

[ittesi259]

You are uninformed

Either you like to flame, or you prefer to preach about what others should do without doing any bit of research about what they actually are doing. Getting Dell models which have Ubuntu and support has been happening for oh....4-6 months if not longer.

[pugster]

Why Ipods cost so much and doing well.

Ipods did so well because it won on the looks and ease of use category. Its sleek look plus great software makes Dell, Sandisk, and Creative players look bad. Plus the fact that Apple spends hundreds of millions promoting their product as the 'it' product. <br /><br />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.

[fred dunn]

Off Topic...But SanDisk kills iPods...

iPods are so limited in that they require special software (itunes).<br />SanDisk has a very nice set of players that cost half of what an iPod costs and is non-propietary.

[ladiesmanwc]

I worked at one...

I lost my job today. The way Dell handled this was asinine and tactless. We got a call around 6:00pm last night that Mayflower was coming to pick up the kiosk, and then today were told we're gone. There was no build up we knew of, just BOOM, out of the blue ~1,500 people jobless.<br /><br />Dell's severance package was two months pay and a kick in the ass.<br /><br />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. <br /><br />Dell never took the kiosks seriously anyway.

[oxtail01]

Didn't make business sense

Sorry for your personal plight but as far as Dell's business model, the kiosks didn't make much sense. You may think they were profitable but obviously making pennies on the dollar is not a good return on investment.

[fred dunn]

Sorry For All Those Employees...

But Dell is heartless.<br />"Dell's severance package was two months pay and a kick in the ass."<br /><br />That's the same way they treat their customers but without the severance pay.<br /><br />Dell will ultimately start closing the Round Rock manufacturing too, you watch!<br /><br />They will push the manufacturing offshore where they don't have to pay benefits or a decent salary.<br /><br />Mark my words, short of the servers and possibly the Optiplex line it's going offshore.<br /><br />I truly am sorry at the way you lost your job too that is just COLD!

[eatsbamboo]

Conglomerates and the economy

I see the conglomerates all struggling with this economy, and if you watch really close you can get a lesson on how to market a business. Conglomerates will do anything to save money, if it kiosks, outlet stores or finally retail, they will do it to sell, sell, sell. Obviously the previous methods they have/had been using worked, right? Well, this economy (I didn?t vote for Bush) is at its worst and the big guys (conglomerates) will have to pull out their best effort to sell their products, we are seeing the best and biggest sales marketing tools used in history. Watch closely and you will learn something!

[MShipley]

Dell to close it's US stores

Dell might as well close those kiosks as I have never seen or <br />heard tell of them selling a damn thing.<br /><br />One thing is that their machines are junk and second is the OS <br />on them is junk too.<br /><br />Might as well close the doors and give the share holders back <br />their money.<br /><br />I do feel badly for the people who lost their jobs though.<br /><br />There's always a need for people at the Apple Store!

[skaaman]

Dell might as well close those kiosks...

I always appreciate an uninformed comment. As someone who opened and ran one of these stores for a year and half I can assure you they made money. In my case it was about a $3M a year. So they were profitable and for the most part the employees that worked there worked hard to make it happen. But in the end, as when I was working there, Dell couldn't get out of its own way to take something with promise and make it flourish.

[geekazine]

Not fair to compare to Gateway

Kiosks are not full blown stores. Kiosks are stands in the middle of a Mall to entice impulse buyers. Gateway had built stores and set them up with a different atmosphere - like Apple stores are.<br /><br />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. <br /><br />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. <br /><br />It was funny though - I walked into the Mall today and noticed the Dell stand was gone. I'll miss avoiding it....

[ethernet76]

Kiosks

I knew they took orders at the kiosk, but I never understood the kind of person that would plop down hundreds of dollars at a stand in the middle of the mall.<br /><br />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.<br /><br />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 <br />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 <br />talking about a burdensome inventory that would take more room to store than feasible with most small-scale mall stores.<br /><br />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 <br />beat the hell out of placing Dells around the multitude of barely working PCs that litter the Best Buy computer section.<br /><br />You can do some amazing things with computers these days, but no one has innovative displays.

[frz1]

Because is run by cheap bastards

They want all of your money but, barely give back anything in return. That is why they don't have a store and that is why they have been losing business. People just tired of their crap.

[BigGuns149]

Kiosks definately seemed like an odd strategy

The Kiosks seemed like an odd strategy really. You really couldn't even hope to demo half the consumer models whereas actually carry inventory for everything.<br /><br />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 &#38; 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.<br /><br /> 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.

[the_smurf]

Sales Tax?

Does this mean they'll be able to stop charging sales tax, since they won't have a store front in my state? (KS)

[skaaman]

Sales Tax?

No. They sell through retail now in every state in the country which requires them to collect sales tax online as well...

[CODAMAN12]

gateway store

I worked in a gateway store and no, you did not have to wait 2 weeks for a computer if you were willing to take what they had in stock home with you. They had a basic, good, better and even better yet approach to the inventory. If you wanted the best, yes, you could order it there, in the store and in two weeks have it delivered to the store or your abode. They had pretty much whatever any other retail computer store had (at least the one I worked in) and in some they offered training and warranty work on the machines. The problem was they were not sited very well and managed even worse. I left 3 months before they closed them. I believe they had 1 or 2 weeks notice before the axe fell.

[raymundr]

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.<br /><br />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.<br /><br />We just don't buy computers for games but most of the time for work and for our children to help them in school.<br /><br />Apple has a store that we can buy immediately and take home on the same day.<br /><br />If Dell will not change their strategy on selling computers, I will rather shift all our computers to Apple.