Dell Closing Kiosk Stores

Know those Dell locations (I call them and others like them ‘carts’), well they are on their way out. At least in the US. Dell has decided to partner with other retailers instead. –

The company launched the Dell Direct Store model in 2002, setting up kiosks in shopping malls and airports, in addition to its direct-selling method by phone and Internet. Customers could test Dell PCs at the kiosks and order the products.

But the company has been moving to expand sales of PCs in stores, inking a number of deals in recent months to sell its products at U.S. retailers, including Wal-Mart Stores Inc., Best Buy Co. and Staples Inc.

“Moving into retail is a prime example of Dell listening to its customers,” said Dell executive Tony Weiss. “This move fits in with how our broad global retail strategy is evolving.”

The Round Rock, Texas, company, which used a purely direct-sales model for more than a decade, is putting more emphasis on consumers and the international market and on selling through retail stores. The direct-sales model began to lose steam in 2005, as consumers - the growth engine in the U.S. market - began gravitating to retail stores to buy portable notebook computers. Dell had largely focused on selling desktops to commercial customers, a market that has slowed.

The question ThirdPipe keeps asking is how can Dell/HP/Leveno keep competing without fundamental change? When a compute device is seriously under a $200 value you aren’t going to call tech support for a fix. The opportunity cost is too high. So tech support will shrink to the corporate - server market with increased costs. A whole cycle of service unbundling is going to occur shortly in this industry.

Surprisingly Dell is not eliminating the overseas kiosk presence.

Full article compliments of WSJ.