Dell should abandon direct sales model

 

Catching up with HP and Acer requires entry into retail, analyst recommends.

Michael Dell's return as the chief executive of Dell could mark the entry of the computer maker into the retail market, analyst firm Current Analysis suggested.

"We believe that at Dell, there is a high-level belief that in the consumer market, customers need to experience (i.e. touch and feel) the products more than in the business segment. Retail is the next logical step," wrote Sam Bhavnani, a research director, covering computing and storage for Currently Analysis in a report.

A retail presence won't just allow consumers to gain hands on experience with Dell computers and flat panel TVs. It can also help polish up the company's tarnished customer service image by serving as a drop off location for products that need servicing, he suggested.

Bhavnani cautioned however that shareholders could undermine a move into retail because of the costs and because the investments could take several years to show a pay-off.

Michael Dell last week was appointed as the company's chief executive, a position that he had given up in July 2004. The move came as the computer maker is facing declining revenues and a drop in its overall market share.

Dell currently operates so-called Dell Direct Stores where consumers can test drive select computer models and talk with company representatives. The kiosks however don't sell any merchandize and still require buyers to place their orders through the company's website.

Under the previous chief executive Kevin Rollins, Dell focused largely improving its supply chain, allowing research and development to fall by the wayside. The computer maker fell behind in the industrial design and customer experience of its computers.

Consumers in recent years have placed an added emphasis on those areas, as is witnessed by the rise of Apple and HP. "Dell seemed to lack the intangibles that work in a Web 2.0 world," noted Bhavnani.

He expects that Michael Dell will put more emphasis on product innovation.

Copyright ©v3.co.uk


Dell should abandon direct sales model
 
 
 
Top Stories
Innovating in the sleepy super industry
There’s little incentive to be on the bleeding edge, so why is Andrew Todd fighting so hard?
 
How technology will unify Toll
The systems headache formed through 15 years of acquisitions.
 
Immigration breached Privacy Act with data leak
Pilgrim slams "copy and paste" of asylum seeker data.
 
 
Sign up to receive iTnews email bulletins
   FOLLOW US...
Latest Comments
Polls
Who do you trust most to protect your private data?







   |   View results
Your bank
  39%
 
Your insurance company
  3%
 
A technology company (Google, Facebook et al)
  7%
 
Your telco, ISP or utility
  7%
 
A retailer (Coles, Woolworths et al)
  2%
 
A Federal Government agency (ATO, Centrelink etc)
  20%
 
An Australian law enforcement agency (AFP, ASIO et al)
  15%
 
A State Government agency (Health dept, etc)
  6%
TOTAL VOTES: 787

Vote