Dell Plans to Sell PCs at Wal-Mart 221
DJAdapt writes "In a departure from Dell's approach of selling machines only directly to customers, a Dell spokesman said Thursday that the computer maker will begin selling two of its Dimension desktop computers in about 3,000 Wal-Marts beginning June 10. Dell spokesman Dwayne Cox said the Wal-Mart deal 'represents our first step' into global retail. 'Customers want more and new ways to buy our products, and we plan on meeting their needs on a global level,' Cox said. 'Offering Dell Dimensions in Wal-Mart is a great example of this approach.'"
Increase sales volume, destroy the brand (Score:4, Insightful)
This screams "We want to be the #1 North American computer seller again and we'll just have to deal with the negative effects of that on margins and brand perception".
I'm sure they'll sell a ton of these because of the nature of Wal-Mart, but this seems like a horrible move in terms of the perception it will create about the Dell brand. I can see those who know little about computers who are looking for quality rather than bargain basement pricing steering away from Dell because they will be the new "cheap Wal-Mart computers". Dell will surely be offering low-end models and will make even less on them because a portion of the purchase price goes to Wal-Mart.
I imagine they're going with Wal-Mart because
Either I'm missing something or this is a short-sighted move.
Sold at Wal-Mart != low quality (Score:5, Insightful)
Re:Sold at Wal-Mart != low quality (Score:4, Insightful)
A PlayStation 3 is a single item with a single manufacturer that doesn't vary in price or quality depending on where you get it. No matter where you buy, you get the same PS3. Do you really think the same is true with computers for someone who doesn't know much about them? I'm going to leave the burden of proof with you, as this doesn't seem worth writing an argument for.
It's clearly cheaper for Dell to pay their super cut-rate DHL shipping than to give Wal-Mart a portion of the profit and to ship to their DCs. If it weren't, how would Dell be saving money by only selling direct for so long?
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You are probably correct that it will cost them more paying Wal-marts cut and shipping, but the shipping isn't a direct comparison. Even with their high volume shipping discount it is still cheaper for them to ship 1000's of PCs on pallets to a Wal-mart distribution center then to 1000's of individual homes.
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As opposed to a portion of the purchase price going to DHL (or whatever shipping company Dell uses)?
What I think he's aluding to, is not that Dell hands them a check to do business with them, but Wal-Mart is notorius for being cut-throat on getting the absolute best deal possible. Having visited their HQ in Bentonville, Arkansas, and speaking with all the dozens of corporate lackies that lick Wal-Mart's boots there, they all tell the same story: Wal-Mart drives a very hard bargain. What they get in larger distribution and volumes, Wal-Mart takes out by driving down their margins. That said, they all
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One for a "normal" store
The other for Wal*Mart.
The difference being that the Walmart version is always inferior at some level.
Personally, this does not surprise me, but it worries me. People have a hard enough time dealing with computers now. How well with the average Joe deal with them when Wal*Mart sells them a cardboard box full of rocks and calls it a PC?
Re:Sold at Wal-Mart != low quality (Score:4, Interesting)
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If you saw it on the Internet, I'm sure it's true but...
It's also "well known" for companies to sell large stores like Walmart, Frys, Compu USA (RIP), Circuit City, etc. unique model numbered items so that those stores can "price match" one another. You know: "Bring us the ad from a competing store with the same product and we will match the
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This deserves to be modded up. Not because it's particularly insightful, but because 9 out 10 Walmart shoppers have no frigging idea of how Walmart does business. Or how the manner in which they do business affects other businesses.
Put another way, Dell's margins will be very thin, but they should expect to make up for the los
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PUT BACK EVERYTHING they took away.
This is a great idea, except that Dell no longer competes in the market they used to when all this stuff was great. That was an era when a PC was still a specialty item and commanded high margins. Now, if we have to pay more than $400 for one, we get pissy and want to look at Acer, or whatever other crap brand wants to sell us some parts in a box. Dell can't afford to build quality any more, because not enough people are willing to pay for it.
The PC industry (excluding Apple) has largely become a low-margi
Re:Increase sales volume, destroy the brand (Score:5, Insightful)
You're missing the minor point that HP is killing Dell lately, and HP sells most of their computers through traditional brick&mortar channels. Dell is trying to get back in the game.
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You're missing the minor point that HP is killing Dell lately, and HP sells most of their computers through traditional brick&mortar channels. Dell is trying to get back in the game.
No, that was the point of my post, which I stated pretty clearly:
This screams "We want to be the #1 North American computer seller again and we'll just have to deal with the negative effects of that on margins and brand perception"
What puzzles me is that it seems like a bad move in the long run. While selling through Wal-Mart will probably accomplish their sales goals, the damage to their brand could easily hurt worse than the lost sales.
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Dell's already lost a lot of brand reputation. This isn't going to drag them down much further.
As for using retailers other than Walmart, most B&M eletronics shops already have agreements with HP or another manufacturer. It doesn't make sense for Best Buy, for example, to add another brand to its PC section.
Also, it's important to note that Walmart is in
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I (kinda) understand what you're saying here, but how the hell did we get to the point where it's better for a major retailer to have less diversity in the products he's selling than more?
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Marketing studies have shown that giving customers too much choice is as bad as giving them too little choice in terms of maximizing sales. At a given price level, you want to give your customer no more than two choices for the same product.
This doesn't always work out, since Sony, for example, might require that you carry their entire line of digita
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Again, I see what you're saying, but I can't help chuckle when I think about these enormous boxes the BBs and CCs live in. Hell, the last time I was in Circuit City, I was struck by how much dead space there was in there. I'm not even talking about the ridiculously high ceiling, either (seriously, there's room for a whole freaking second floor there), but how "loosely packed" the store was with merchandise. BB seems to be better at store layouts
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That, and competing suppliers like to ink contracts that exclude their competitors. How often do you find both Coca-Cola and Pepsi for sale in the same restaurant?
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If Dell can make a competitive offering like that then I it's not only smart, but necessary to stop the bleeding they've endured recently.
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Because it has become the received wisdom that a company should be number one or number two in a given business, or it should get out of that business. Jack Welch championed this notion during his immensely successful tenure at GE, and most management now subscribes to it. Whether or not it's *true* may be another matter, but most CEOs these days run thei
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Dell may not have the most unit sales, but it seems like they still make more net profits from personal computers than HP does, and I see no reason to throw it away to get market share through low margin computers. I'm still deciphering the numbers from their quarterly reports though. I wish there was an easier way to do
Better idea than what Gateway tried. (Score:5, Interesting)
I disagree with what will happen to the perception of Dell's brand, they are big enough to withstand any ills that people might associate with Wal-Mart. Hell I am many others shop at Wal-Mart simply because of price. If low price is the story their selling its not something to be ashamed of. Plus Dell could be looking long term, get them into a lower end system through Wal-Mart and upsell them at a later date.
If Apple can go into Best Buy and survive the perception that many people of Best Buy sure Dell can handle anything from being associated with Wal-Mart
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Mostly agree, but: (Score:2)
Dell doesn't need the retailer to add value with service and support, since they do that themselves.
Dell has traditionally tailored their manufacturing to order. Now they get to see how many identical computers they can assemble and ship, by filling up a Wal-Mart warehouse or three.
That being the case, there may not be the kind of quality issues you hint
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Somebody please mod parent up, it's the first interesting speculation I've read in this thread as to why Dell is doing this. Mind you, they probably already know exactly what that number is (what? another vanilla order? Why doesn't anybody want a custom box, whaaa!).
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'nuff said.
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Not everything Wal-Mart sells is cheaply made. They don't sell cheaper Wal-Mart versions of the Wii/PS3/X-Box 360, or the iPod, or the Sansa, or Sanyo/Sony/whatever TVs and electronics. No one thinks Brand X of TV is crap because Wal-Mart sells them.
This isn't to say Wal-Mart doesn't sell their own crappy brands of stuff, but to assume everything sold their is cheap crap is ignorance.
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Yea back in the Commodore-64 days maybe but these days I would think that most people buy computers at Best Buy, CompUSA, or Circus City or any of the other Big Box electronics stores.
Could be wrong but that is they way I see it.
Heeding the tale of Snapper (Score:2)
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No offense, but you are missing something quite subtle yet extremely profound. It is no big secret that the prices of computers have plummeted over the last ten years or so. From the consumer's perspective, this is a great thing. However, this has the interesting side effect of making computer repair less economically attractive. In the age of the disposable society, people just dispose [nytimes.com] of their computer and buy a new one rather than spend money o
Great insight (Score:2)
No offense, but you are missing something quite subtle yet extremely profound.
Your response was exactly what I was asking for - of course no offense.
Dell is embracing what it sees as the shape of things to come for computers, which is that most people will buy cheap ones that are disposable. As this is becoming more and more the norm, selling these low-level products direct isn't the best way to go. Who's going to mail order a $150 TV? People in the market for something like this go to Wal-Mart.
Like you said, it's also a very telling statement about Dell's continuing philosophy
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Just like everything else at Wal-Mart. Yeah, it's sold for less, but it's also a special model sold only at Wal-Mart made with the cheapest possible parts you can buy. So, when people buy your product at Wal-Mart, they are indeed getting an inferior product.
I remember a great story I read about some lawn mower/tractor company that refused to do busine
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I think this is a good move because it addresses a couple of the weaknesses in dell's model. First of all, there are times when you need a computer *now* -- maybe an old machine has died, or whatever. You can't wait 10 days. Now you can go to wal-mart at 2am and buy a new dell. You'll get a good machine at a good price, so you won't be penalized be
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I think this is great. Two Dell stories today:
1) Dell sells in Wal-Mart.
2) Dell sells pre-loaded with Ubuntu.
All we need to do is convince Dell to convince the two and people will actually start buying Linux PCs!
Hm, or maybe they'll go over just as well as the Linspire ones. Ok, you win.
-F
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I dislike Dell, and when people ask me why I say, "I find their tier two and three support to be unbearable, and I hate their proprietary hardware, and their tendency to skimp on things like montherboards." It makes people's eyes glaze over, and in
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I suspect it will fail because Dell is not set up to do returns, yet Walmart store policy typically requires it (I know there are exceptions, like CD's and software). Dell will see a flood of returns when people take the computer home, pull out the hard drive and Ram, then return it as not functioning (how many times I saw this at Computer City...). Dell officially takes returns, but generally fixes by repair rather than exchange on the consumer
This represents our first step into... (Score:3, Funny)
Union business... (Score:2)
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Will they offer Ubuntu machines at Walmart ? (Score:4, Interesting)
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Wal*Mart Bob (Score:2, Funny)
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Or maybe you can start an off-site back-up service similar to Iron Mountain. Then, I can make a personal back-up that I store at your "facility" in case my CD ever becomes unusable (and by unusable, I'm not referring to the actual lack of use of the software, but the inability to read the disk).
Layne
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In any c
But will they run Linux? (Score:5, Interesting)
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Finally they figured it out (Score:4, Funny)
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About time. (Score:4, Interesting)
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Oblig new slogan (Score:5, Funny)
Super Walmart Today (Score:2, Interesting)
Went to a Super Walmart today. Loved it. It reminded me of Itoyokado in Japan.
Their PC section is o.k., I'd like to see them expand it and actually compete with Best Buy for the market share of "department store" PC retailers.
So, while there I bought:
Next, I'll be able to replace my aging desktop. Coolness, where else but in America and in a Walmart?
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Lower cost doesn't equal better value. Since Wal-mart has said they want throw away items bought year after year, I will gladly pay 25% more for something I will be using for 5+ years.
Re:Super Walmart Today (Score:4, Funny)
Coolness, where else but in America and in a Walmart?
I dunno, Japan in an Itoyokado?
I'm with you. (Score:2)
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[I'll acknowledge that my knowledge of the underside of the Wally-beast is a few years old--they may have changed things today.]
Not that all staff at big box electronics stores are wizards, but even the least initiated there seem to know more than the typical associate at Wal-Mart. Then, watch their product cycles. Outdated products wi
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Strangely, I have found that this becomes a point in favor of shopping at WalMart!
If I go to a chain electronics store and ask any question about something I am thinking about buying, the associate tries to talk me into buying something more expensive and gives me bullshit reasons why the item I selected isn't any good. I assume there must be some kind of incentive
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I like Costco above and beyond any other chain, as they have very high-quality foods, high-quality merchandise, and they even treat their employees well.
Their electronics department doesn't usually have the best prices, but I have had them give me full credit on a 1-year old off-brand plasma (which would flicker for 1-2 mins until warmed up) that I then used to get a 52" panasonic that has been flawless. I doubt I'd have had the same results anywhere else.
A
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This, in the land of 600 yen Big Mac.
Super Walmart is like Itoyokado in that it has a grocery center, clothing, electronics, garden, banking, and other services.
I spent 6 years in Japan, some of it as the Far East Training Manager for a semicondutor equipment company, some as a student, some as a missionary. The only ones who have the shopping center perfected above the Japanese are the Koreans, with America falling to 3rd (including the Canadians, I did that on purpose ;)).
Walma
Daddy likes... (Score:2, Insightful)
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Apple?
http://en.wikipedia.org/wiki/Apple_Store_(retail) [wikipedia.org]
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Best Buy is huge and flashy, often crowded, always overpriced for small things like cables and flash drives and blank CDs. And its employees are annoying and ignorant. Product selection at Circuit City isn't as good as Best Buy, but they had very good prices on music CDs, so sometimes I would go there.
By comparison, CompUSA is *much* more focused on computers as opposed to all other digit
Bye dell (Score:2, Interesting)
1. They will have to compete (on price) with the Walmart eMachines
2. Corporate sales will suffer. "We use the same equipment you can get at Walmart!"
3. The clueless will badmouth Dell & walmart for selling them a broken PC. We all know it was THEM that couldn't use it, but that's what the perception will be.
Maybe they can make it work. I don't see it as an up for them, though.
"more and new ways to buy our products" (Score:2, Funny)
Because... (Score:2, Funny)
SIS working with Dell (Score:5, Informative)
For those who don't follow links here is an extract:
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i remember the days when they were the bane of computing, but they seem to have mended their ways now and are as stable as anything else around, though not quite as good in the performance department, and integrated graphics suck as always, but since they're still shooting for budget work, that isn't a huge issue.
Eh? (Score:5, Funny)
Who the hell is going to want to buy 1/1500th of a computer?
Re: Eh? (Score:5, Funny)
Hell Freezes Over (Score:2)
Wow, I posted this [slashdot.org] today and got modded up. I figured writing something positive about shopping at Walmart would get all sorts of negative mods on /.
Next you know, praising Bill Gates and Steve Ballmer will boost your karma.
First they offshored the help desk, (Score:2)
So the next commercial should say "Dude! Why the hell get a Dell?"
NASCAR + Linux + Dell + Wal-Mart (Score:2, Interesting)
There are NASCAR fans who base their purchasing decisions soley on what logos are sported by their favorite NASCAR driver. If they see that penguin on the car, then see that penguin on a Dell at Wal-Mart, they'll take that penguin over the Dell with Windows.
Good? Bad? I dunno.
I can see it now (Score:2)
Assistant Manager: Uhhh... we have chocolate, strawberry, and vanilla.
linux (Score:2)
I wonder how bad Wal-Mart bent them over? (Score:2)
It is well known fact that Wal-mart consistently asks manufacturer's to create product lines specifically for Wal-mart. Usually, these lines are of lesser quality (due to price) than the manufacturer's original lines. Think re-badged or OEM product sold primarily on price alone. Over time, the brand dilutes and eventually, many manufacturer's find themselves in a worse position than if they had never done business with Wal-mart in the first place.
Snapper mowers said no. [fastcompany.com] That's just
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> After spending 20 years proving to everybody that "direct is better and cheaper",
> them selling direct thru a major distributor like Wally World is a
> major, major change in their product placement and emphasis.
Yup, but in this CBC article [blogs.com] they say they know that most of their customers will still buy direct. Note that the Ubuntu thing is mentioned in the same article, but I don't see a mention of any overlap there.
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Will Dell sell a lot of machines through Walmart? Who can say? Will Dell get their name out there right next to HP, bringing their online and phone stores business that they might not have gotten before? You bet.
I think that's the ultimate goal here. If the individual units sell a
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Wal-Mart is known for brutally squeezing its suppliers for every possible reduction--year after year. Dell may only see a very small portion of its business through Wal-Mart, but it will become increasingly less profitable as they years go by.
While I understand the appeal of selling through Wal-Marts network of stores, I wonder if Dell ever considered that consumers who are just plain tired of Wal-Mart (I'm one of them--I think the whole place started
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This is all too true, and I despise Wal-Mart for it, but this is also Dell we're talking about. Dell has done just as much for lean production and supply networks as Wal-Mart. The reason Dell can sell so cheaply is not just because of their direct model, it's because they also have the clout to put demands on their suppliers. For instance, Dell requires that suppliers have a warehouse within a certain
Parent is not a Troll (Score:2)
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Want to buy from us directly? Sure, give us a call at 1-800-999-3355 (WWW-DELL).
Wanna peek at our machines, be wowed at how nice they look, then call us from home when you're ready to buy? Head into Walmart (and Costco, and eventually, K-Mart, Fred Meyer, Target and Fry's...).
Wanna buy a machine straight from Walmart? Sure, grab that little tag and bring it to the counter.
So Dell's listening to their customers who are saying "I'm not comfortable calling in an order for so
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Nothing wrong with this. Just a change.
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I doubt they'd have Ubuntu pre-installed. This reeks of a scam.
Walmart is huge, and putting cheap windows machines there will mean they will get bought by many. Then Dell can come back to sales figures and go, "See? We told you! Consumers just don't want Linux on their computers," and then discontinue the line. Microsoft leaves happy, Dell leaves happy, and the average customer doesn't even know what hit them.
I was WONDERING why Dell was getting so cozy with the idea of selling Linux machines without a lot
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Remember those articles about Intel in bed with Dell with under-the-table payoffs? How about HP's high moral standard as evidenced by the last snafu that had the SEC on their tail (for which they got but a slap on the wrist, something else that smells bad).
I'm all for the simplest explanation usually being the right one, but, it's an awful lot of coincidence that Linux Dells are available in such close proximity to this announcement, don't you think?
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It is always tough to make a laptop work for primary use with Linux, besides intel based Apple's, unless the manufacturer specifically supports all the combinations of hardware for linux.
--jeffk++
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"It's not a viable plan, it didn't work with Dell." and the discussion will end there. Not only will the monoculture not be split, but this might completely eliminate the acceptance of preinstalled-linux as a method to give people a choice.
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