Is Dell Cool Enough For Stores?

Dell recently announced that it will start selling computers in Best Buy stores in January. In Dell’s press release, Michael Tatelman, vice president of sales and marketing for Dell’s global consumer business was quoted as saying:

Seeing the latest fashion colors of our Inspiron and XPS notebooks or previewing the ultimate gaming experience on a high-performance system can be an important part of how people shop

This follows-up other announcements from Dell about its plans to deliver through retail outlets. Here’s what Michael Dell said in an October press release about the PC maker’s move into Staples:

Dell pioneered the “easy button” in computing through our direct business model. Now with Staples we’re bringing all the benefits of direct to shoppers across America.

My take: This move is part of a broad shift from PCs as utilitarian tool to PCs as a core consumer electronics device. But does Dell have the right chops to make this strategy work? Here’s my top-of-mind (as opposed to rigorous) analysis of how Dell’s existing differentiators will help them succeed in stores:

  • Made to order: No
  • Supply chain flexibility: No
  • Supply chain efficiency: Moderate (if it can be applied to the indirect model)
  • Easy-to-use online configurator: No
  • Brand recognition: Yes
  • Lowish cost: Moderate (we’ll see if that holds up in stores) 
  • Utilitarian products: No

This is not be a precise analysis, but it does highlight that Dell’s existing strengths are not necessarily lined up well for selling products in the store. In my mind, Dell’s indirect strategy comes down to one question:

Can Dell shift from being efficient to being cool?

When people are playing around with electronics in stores, they’re more attuned to the look and feel of the product — much more so than when they buy it online. And, the “coolness” of the products can be readily compared with others. Fortunately for Dell, it doesn’t need to be as cool as Apple to succeed — only cooler than HP.

Here are a few ideas for Dell to keep in mind as it makes the move into stores:

  • Redesign products with more emphasis on colors and lines. Speeds, feeds, and prices are great for comparing PCs online. But when people are in the store, they are heavily influenced by how the products look. This will probably require Dell to use a different set of industrial design skills (maybe from outside firms like Ideo or Design Continuum).
  • Redesign the packaging as well. Dell needs to think of the product packaging as part its the marketing materials. So the outside of the packages should reinforce cool and feature-richness of the products. And the inside of the box should reinforce the decision that customers have made (Take a look at the out-of-box experiences for Apple products). Remember, it’s easy to return a PC to a store.
  • Focus on in-store displays. Don’t underestimate the value of informative and eye-catching in-store displays. The retailers will put some constraints on what can be done in their stores, but Dell should look at what other manufacturers like Bose do with their in-store displays (consider investing in interactive displays). Make sure that you find ways to HELP THE RETAILERS SELL DELL.
  • Leverage online strengths into the stores. We’re about to publish a series of research reports looking at the Web-to-Store-to-Web experiences across a number of retail categories, and they’re not very good. Dell could (and should) standout in this area. Here’s one way: Make it easy to find the products (and get more information) online once they’ve seen a specific product in the store.

The bottom line: Dell can’t just sell in stores, it needs a retail makeover.

About Bruce Temkin, CCXP
I am a customer experience transformist, helping large organizations improve business results by changing how they deal with customers. As part of this focus, I examine strategy, culture, interaction design, customer service, branding and leadership practices. I am also a fanatical student of business, so this blog provides an outlet for sharing insights from my ongoing educational journey. Simply put, I am passionate about spotting emerging best practices and helping companies master them. And, as many people know, I love to speak about these topics in almost any forum. My “title” is Managing Partner of the Temkin Group, a customer experience research and consulting firm that helps organizations become more customer-centric. Our goal is simple: accelerate the path to delighting customers. I am also the co-founder and Emeritus Chair of the Customer Experience Professionals Association (CXPA.org), a non-profit organization dedicated to the success of CX professionals.

2 Responses to Is Dell Cool Enough For Stores?

  1. David Blanar says:

    Spot-on (top-level) analysis, although I might add another distinction:

    * Power over suppliers: No, considering the retail model will necessitate inventory management, which brunts its existing leverage.

    Dell literally defined how supply chains should be managed for direct PC sales, not to mention led the way online with mass-customised partner pages for corporate customers. So … might I ask the obvious?
    Why doesn’t it get into the consultancy game? I know you can’t out-IBM IBM but Dell has more than one or two ideas about how to streamline a value chain. Services offer higher margins and it has a credible competency.

    Forget the retail environment; it’s like Wal-Mart opening up a small shop at the airport. It negates most strategic advantages and, if you need any further evidence, just look at Gateway’s experience. Oh dear.

  2. Bruce Temkin says:

    David: Great points. Dell is entering a world where it leverages only a small piece of its existing core competencies. It will be interesting to see if it turns out to be more like Apple or Gateway.

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