Reseller News

Dell toe-dipping into retail model

  • Ben Ames (Unknown Publication)
  • 26 June, 2007 22:00

Underlining its expansion from online to retail sales, Dell launched desktop and notebook PCs at Macy's department store in New York.

The company announced nine new Inspiron desktops and notebooks and an XPS M1330 notebook, all available in a choice of eight shell colors.

"The Dell of today is vastly different from the Dell of six months ago or even last week," said Alex Gruzen, senior vice president of Dell’s consumer product group. "We're here at Macy's in New York City. That alone is different for Dell, being in a department store or any kind of retail setting at all."

Dell even set up a portable kiosk to take orders for the new PCs in a temporary space it will occupy at Macy's for the next two weeks, he said.

The new Inspiron notebooks cost US$749 for the model 1521 to $999 for the model 1720, with a choice of processors from Intel or Advanced Micro Devices. The Inspiron 1420 comes with an additional choice of Microsoft Corp.'s Windows Vista or the Ubuntu Linux operating system, for $799.

The Inspiron desktops start at $349 for models 530, 530s, 531 and 531s, all supporting up to 500GB of disk space to store digital media files, with the model 530 offering a choice between Windows and Linux.

The XPS M1330 notebook costs $1,299 with a 13.3-inch widescreen display, weighs under 1.8 kilos and comes with a one-year subscription to Dell's Online Backup service, where users can store 10GB of files on Dell servers for remote data access.

In an effort to bolster its sliding market share and quarterly profits, Dell began selling certain PC models at Wal-Mart retail stores on June 10, marking the first time it had strayed from the direct sales model. Dell rose to prominence by cutting its costs through eliminating retail middlemen and selling its PCs only through its web site, phone lines and catalogues.

That system began to fail in 2006, as competitors cut costs and Hewlett-Packard passed Dell to become the world's largest PC vendor. Now Dell is in the midst of a corporate reorganisation announced May 31 that includes laying off 10 percent of its 88,100 workers.

Dell hopes its new retail presence will allow it to fix a strategic mistake. By trying to beat its competitors through low prices in recent years, Dell found itself spending all its publicity efforts promoting its least exciting products, Gruzen said. Selling PCs in retail stores gives Dell an opportunity to showcase its premium PC models, and bring new luster to its corporate image at the same time.

"This is really just a hint of what we're doing to get these exciting new products into customers' hands," Gruzen said. "We have a broader retail strategy and over the coming months we will announce more partnerships, both with Wal-Mart and with other retailers."