Dude, you're getting a Dell -- at Wal-Mart. According to news reports, Dell will soon begin selling its computers at the ubiquitous discount stores, breaking with its longstanding practice of direct sales only. Wal-Mart is currently the largest retailer on the planet, which in turn will give Dell much greater reach and visibility in front of potential buyers.
The move comes as Dell works to overcome sales challenges from other computer makers, notably Hewlett-Packard. HP has recently overtaken Dell's position as the first-place seller of personal computers, giving Dell plenty of motivation to turn up the heat.
Beginning on June 10, Dell will sell two Dimension desktop models in more than 3,000 Wal-Mart stores, as well as in its Sam's Club warehouses, in the U.S., Canada, and Puerto Rico. Dell spokesperson Dwayne Cox said that the deal with Wal-Mart is the computer maker's "first step" into global retail.
Two Dimension Desktops
The specific models and configurations have not been indicated, although the models are expected to be offered under $700 and under an exclusive arrangement. Sam's Club and Wal-Mart Canada might carry somewhat different models than their cousin stores.
Gary Severson, Wal-Mart senior VP of home entertainment, said that "Dell is a proven electronics brand and adds a new complement to our other high quality desktop selections."
As a "new complement," Dell won't be alone in the giant retailer's stores. Wal-Mart currently sells desktop PCs from such computer makers as archrival HP, Gateway, and Acer, as well as notebook PCs from Acer, HP, Lenovo, Toshiba, and Asus, plus monitors, peripherals, and other computer-related products.
Wal-Mart has recently announced plans to enlarge its consumer electronics sections, beginning with a wider selection of HDTVs, home-theater systems, Skype phones, and digital cameras.
A spokesperson for Dell, which is based in Round Rock, Texas, indicated that the company also will add retail stores in its markets throughout the UK, France, Japan, China, and Brazil.
Adding Stores in Top 15 Markets
Since it was founded in the mid-1980s, Dell's competitive edge in prices has been assisted by its direct sales, as well as by mall kiosks, allowing it to remove the middleman in its pricing structure. Dell's products are sold via the Internet, phone, or mail, with limited sales through some stores, such as Costco Wholesale.
But recently, Dell's sales position has been slipping. In April, for instance, a Gartner study found that HP had solidified its lead as No. 1 in worldwide shipments, while Dell had dropped 7.8 percent in this year, versus first quarter of last year.
Michael Dell, the company's founder, CEO, and namesake, has been quoted as saying that the direct sales model was a revolution, not a religion. There have been several other indications recently from the CEO and others at Dell that the company would begin to move beyond direct sales.