Dell shuts 140 retail kiosks in US

by Agam Shah

January 30, 2008 —

Dell on Wednesday announced
the shutdown of retail kiosks in malls throughout the U.S. as it adjusts its
evolving product distribution strategy.

The closings comes at a time when Dell is repositioning its retail strategy
to attract more customers by selling products through its Web site, retail outlets
and over the phone.

Dell had over 140 kiosks, called Dell Direct stores, for customers to buy products,
including PCs, TVs and printers. Dell representatives staffed the kiosks and
assisted buyers in choosing products and placing orders. The kiosks didn't actually
carry inventory so products were shipped to buyers.

This change does not impact Dell Direct stores in Canada, Asia-Pacific and
Japan, said Lionel Menchaca, digital media manager at Dell in a blog
entry. The company has about 50 stand-alone kiosks outside the U.S.

"We started offering Dell systems through retailers about six months ago,
and now customers can buy Dell desktops and laptops through more than 10,000
retail outlets worldwide," Menchaca wrote.

The needs for kiosks declined as retail stores provide more accessibility to
Dell products, said Dell spokesman David Frink. The kiosks, introduced in 2002,
are being closed immediately, Frink said.

The shutdown might lead to laying off employees who staffed the kiosks, Frink
said. He declined to comment on an exact number of layoffs and charges that
the company might take relating to the shutdown.

Dell has expanded its in-store offerings over the last six months by signing
up retailers globally to sell its products, including Best Buy and Wal-Mart
in the U.S., Tesco in the U.K. and Bic Camera in Japan.

The kiosks were just an expansion of the company's online and catalog sales,
said David Daoud, an analyst at IDC. "If anything, it shows that Dell doesn't
want kiosks to compete with the brick and mortar stores," he said. Customers
prefer to buy products online or at a store so having kiosks doesn't fit with
Dell's evolving U.S. business model, Daoud said.

However, kiosks will be an effective tool to facilitate brand awareness for
Dell in the international and emerging markets, especially for customers who
can't go online, Daoud said. Though it has a significant enterprise presence
internationally, Dell has the potential to grow in the consumer space, Daoud
said.

Dell's retooled retail strategy has helped the company expand its lead over
Hewlett-Packard as the largest U.S. PC vendor in the fourth quarter of 2007,
according to figures from analyst firms Gartner and IDC. However, HP remained
the world's largest PC dealer, topping Dell, Acer and Lenovo, according to figures
from both firms.

IDG News Service