Direct sales giant Dell has taken another step towards channel-based distribution with the decision to sell stock through the world’s largest retailer, US-based Wal-Mart, and has hinted at similar initiatives elsewhere.
Come June 10, Dell will start selling bundled computers at Wal-Mart stores in the US, Canada and Puerto Rico for under US$700, in a deal the company calls its first step into the retail market.
However, it started selling low-end stock through New Zealand’s own bargain retailer, The Warehouse, in 2003, and has previously flirted with retail in the US, selling small volumes of monitors through Costco.
Australian-based Dell spokesperson Paul McKeown says as a global and “non-hierarchical” company, Dell in the US would be aware of selling through The Warehouse in New Zealand.
He describes the Warehouse and Wal-Mart moves as “tests in terms of reaching customers”, adding the Wal-Mart announcement is a continuation of a global strategy that international boss Michael Dell has been talking about for some time.
Dell customers have been asking for alternative ways of purchasing its products, McKeown says. “We’re demonstrating that we’re listening to what customers want from us.”
McKeown could not reveal specifics of how this new retail strategy will play out locally, but in an earlier regional statement, Dell said: “In the coming quarters there will be additional activity in support of this move into global retail. Stay tuned.”
While Dell has previously tested the retail market in the US with physical stores, where people could order equipment for home delivery, it became the largest PC company in the world selling directly online and over the phone.
However, this model has been in decline since 2005, culminating in Dell losing the number one position to HP late last year.
The deal with Wal-Mart is the most critical change for Dell since chief executive and founder Michael Dell regained control of the company in January.
Wal-Mart is known for wide distribution and a preference to move stock quickly. As the world’s second-largest corporation it currently employs more than 1.8 million people, which equates to around 85 percent of New Zealand’s work force of 2.1 million.