Puzzling. That’s about all I can say about Dell’s first and only retail store at the Northpark (Tex.) store, within sight of the Apple store. The store’s appearance is strange, the sales model is strange, and exactly what Dell hopes to accomplish is baffling. How does it compare to a typical Apple retail store, and what grade can I give it based on a recent visit?
Dell officials say that the store does not signal a change in their direct-sales model, but rather an “extension of our kiosk strategy.”
First, the store is on the second level of the huge, upscale mall in the north suburbs of Dallas. Mall visitors definitely have an “upper-upper” appearance, and a bank account to match. As you stand at the entrance of the store looking out, a set of three large planters at your 2 o’clock position blocks the view of the Apple store down on the ground level of the mall. Coincidence?
The front of the store is all glass, topped by a space-wide, 3 foot-high sign that simply declares “Dell” in blue-on-white. Oddly, the logo is set to the far left of the space, making it more difficult to pick out from a distance. The windows themselves have no indication that it’s a Dell store. In fact, the only thing they do show are three flat-screen monitors set in a vertical column on a pole. The screens display a Dell promotion video loop.
Next, the interior is divided into two parts, physically and logically: the left half has demo and sales stations for computers and TVs set among a dark wood floor and furnishings, and the right half has demo stations for laptops set in bright lighting and a white floor.
At the back of the shallow store is a huge, back-lit, white-on-blue Dell logo, which hides a a tech support station (not free, and not linked to any on-line purchased Dell support packages) on the right, and a consultation station on the left.
If you can actually find the store because of the near-invisible signage, the front windows certainly do nothing to draw you in. All you see are LCD screens.
When you enter, there are two podiums on walnut-looking wood stands displaying laptop products. Right now, the front-most product is the XPS M2010 multimedia computer that’s half desktop and half laptop.
The first thing you notice when you enter is the noise level–it’s high and everything is echoing off the ceiling, walls and floor. When I visited, the place was jumpin’, probably still from back-to-school customers.
The right side demo laptops are against the wall by themselves. There were several people trying them out, some assisted by the 8-10 staffers in the store.
The left side is more complex: there are three, two-sided counters, providing six demo areas of computers paired with digital cameras, camcorders, music players and other devices. This is where the sales machine really grinds away. At the end-cap of each of the three counters is a computer and printer, used by the staff to actually process a purchase and print out the customer’s paperwork.
On the left-side wall are TVs of descending sizes, with a kid’s area at the back corner, offering a small table, computer and kid-oriented software.
Oddly, the two halves of the store are lighted differently: left side dim, and right side bright. Perhaps it’s to reinforce the living room atmosphere on the left side, compared to the…well, what is it on the right side?
Dell has obviously taken Apple’s approach (copied by others, too) of displaying computers hooked to the Internet, and connected to peripherals that customers might actually use: cameras, mp3 players, etc.
The demo area looks pretty neat and standardized–until you realize that Dell has several levels of computers, geared specifically to the customers: home/home office, small business, medium/large business, and government/healthcare/education. The computers you’re looking at are just a fraction of what Dell offers, not taking into account all the possible configurations of each model.
You may recall that Apple took this same approach about a million years ago (pre-1998), cranking out various models of computer aimed at various markets. Sometimes the same technology was packaged and named as a different computer. When Steve Jobs returned to Apple, the product line was pared down, simplified and unified.
Unfortunately for the Dell consumer, the company is focused on the business customer, deriving just 15% of its revenues from consumers. In fact, its 2006 annual report doesn’t even contain the word “retail,” reinforcing its complete lack of attention to this method of sales, and the consumer market. And if that weren’t enough, for financial purposes, Dell is folding its consumer segment into the business segment beginning with the first quarter of fiscal 2007.
The staff are all wearing long-sleeve, “Dell blue” collared shirts, and rank somewhere just above a 1970s IBM staffer in appearance. There’s certainly not the diversity of an Apple store. Since I wasn’t buying, I can’t provide an evaluation of their sales technique or knowledge.
Of course, the biggest and most obvious feature of the store is the complete lack of inventory to sell. If you’re interested in a computer model, the sales person will guide you through the on-line purchase process, pointing out how to select the model, configure it and add accessories or peripherals, and then enter your payment information. At the end, the salesperon will print out a receipt for you. This goes for TVs, too.
Jim Skelding, director of Dell retail stores, has said the company is opening stores because it ran out of room to put up kiosks. That’s pretty incredible to believe. They have 170 kiosk locations now, many in the same malls as Apple stores. There are still plenty of locations where they could continue putting up inexpensive-to-operate kiosks. Why they would want to open up a single retail store is certainly a head-scratcher.
Apple’s retail stores contribute about 16% of the company’s total revenue, a significant portion for a company that didn’t have any retail operation five years ago. How much revenue could a single retail store generate for Dell? I can only conclude that they’re testing the waters, hoping to tap into the consumer market that they have purposely ignored, preferring to go after the biz market.
A recent Wall Street Journal article noted how Dell was left behind as consumers began buying more and more laptops, and that customers like to test them out in-person before buying. Apple, H-P and others with a retail presence have taken advantage of this evolution.
So, how does the store compare to an Apple store? The storefront impact is much less than an Apple store: no distinctive façade, no obvious signage and no engaging store windows. The interior is necessarily fractured because of Dell’s computer/TV product line. It just makes it harder to know where to go when you enter the store. On the other hand, the computers are connected to real-world peripherals so you can test out how they work together.
But the biggest difference is buyability. You simply can’t come into the store to browse, buy something and take it home. You have to have an extreme amount of patience to visit the Dell store, order something, and then wait “five to seven business days” for them to build and deliver it. How much revenue do you think Dell is losing with their no-stock technique?
So while I generally give Apple an A grade on their stores, I have to give Dell a C. The first store isnt’t that spectacular and it can’t be contributing that much to Dell’s future success.
Now watch the 6-minute video tour on Tech Blog (but apparently Dell-produced) given by Jim Skelding, director of Dell’s retail store program. He conspicuously talks more about the products, having few words to describe the store’s features or design. That’s in contrast to Apple Sr. V-P Retail Ron Johnson, who has an endless vocabulary–and enthusiasm–for the stores his team has created. Near the end of the video Skelding explains the purchase process, quickly passing over the on-line work you have to complete. “Every system at Dell is built for you, only you,” he said, so you pay only for what you want, not what you don’t.
[By the way, I saw but deliberately did not read another review of the Dell store before I wrote this. Now that I've finished, we made some of the same observations. Check it out.]
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