Channeling Sales

Dell subtly announced last week that they would test moving some of their successful mall kiosks into an in-line 3000 sq foot concept store in a couple of malls.  Of course they had to make this announcement stealthily because the press and analysts, who know little about retail, would immediately jump to all sorts of conclusions.  Dell already has about 170 mall kiosks, which means they have employees, a management structure to control them and a method to track their success.  The kiosks have been very successful (according to Dell, it would help if they would put a number to that success) and it is natural to want to show more products and offer a more comfortable shopping experience through a full line store.

Dell is no Gateway, so the expectation is that they believe the no inventory model can work in-line as well as it did in the kiosks, and that they can execute a better retail strategy than Gateway did, which was really it’s ultimate demise.  All that said Dell is not Apple either and without a cult following we are hard pressed to understand how people are going to be willing to shop in store and buy online, despite what Dell says its current experience is. We are, as is evident by this post, taking a wait-and-see attitude because we can see success and failure in this endeavor.

But we do have to ask,  If Dell is so great at managing inventory why can’t they manage a couple of dozen skus in a few stores, because that would not be a repudiation of the direct model, but more likely an enhancement and an adaptation of it.