Will Dell machines be sold exclusively in large chains and supermarkets such as PC World and Tesco or will the machines be made available in smaller independents?
We’ve signed deals with four major partners in the region – Carphone Warehouse, Carrefour, and in the UK specifically we have agreements with Tesco and DSGi. What we’re trying to do here is have a deliberate strategy of trying to combine our customers with specific needs with our product offering and with the partners that we couple with.
For example in the US we’ve announced relationships with Best Buy, Staples and Walmart, and what that represents in the case of Best Buy is we partnered with the number one retailer that really focuses on people interested in the connected lifestyle.
In Staples we’ve partnered with the number one office super store in the country, and then with Walmart we’ve partnered with the number one value seeker, so those who are looking for really good value for basic computer needs.
We think that is a very strategic and beneficial way to go about doing this around the world and it’s the kind of strategy we’re hoping to replicate both in Europe and Asia as well.
So the strategy is very much about forming relationships with the large-scale retail leaders, as opposed to the High Street independents?
There are opportunities to partner with folks who are aligning themselves with some of the programmes that we’re aligning ourselves with. Gaming is a huge area of opportunity for Dell right now; we have just announced in the States the availability of the new mainstream gaming desktop called the XPS630.
What we’re doing is we’re finding out a lot more people are very interested in gaming than you might think. We want to be able to provide the right technology solutions for them so they can go home and play computer games to blow off some steam and have some fun.
Its not just about the folks who are at the bleeding edge of technology, its going from extreme to mainstream. In that scenario we’re looking to partner with the appropriate players who can help us connect with customers we may not have reached in the past. That’s just an example of one of the areas we’re focussed on.
That gaming space is something independent retailers are particularly strong at in the UK. Are you therefore saying you’ll be looking to engage with them as well?
We’re certainly interested in seeking opportunities that support where our customers want to be. If you look at our overall retail strategy over the past couple of months, our goal has been really to focus the opportunity with the customer demand. Our customers seem to be very pleased with the steps we’ve taken and we continue to expand around the world.
Do you have any plans to work with distribution firms at all?
I don’t think there’s any one way to answer that. We obviously work the model that fits each particular partner, but we are a direct company and we are trying to extend the advantages of the direct model into retail. We will distribute from our factories directly to our partners and then work with how to best merchandise our products and their environment.
Will there be a difference in pricing between machines sold from Dell Direct and those sold in retail stores?
I think they are generally in the same area; your configurations online may not be the same as what you find in retail. Obviously, if you’re shopping online you can customise your system – the exact component and specification. In retail you have choices that are fewer but still address specific customer needs.
What would you say that you can bring to retail that isn’t there already?
The main benefit is because of Dell’s heritage in being a direct company, we have the ability to get the latest technology to store shelves quickly and the ability to work with our partners to shape what we believe the demand will be, so we don’t end up with a lot of stale merchandise on shelves the way some of our competitors have had over time.
We think that is another example of being able to apply our direct model to retail and really delight customers with the latest technology that they can get very quickly once its available to the market.
Do you think, for example, HP and Acer machines getting ‘stale’ on shelves is a problem at the moment then?
I totally support what you’re saying, yes.
So the direct to retail model is an advantage?
Absolutely. There are a lot of things that are key ingredients of the direct business model that we can leverage and apply to our retail business, that we think is not only more beneficial for our customers but very helpful to the business.
What sort of marketing spend will you be putting behind Dell’s retail drive? What will the campaign consist of?
The way in which we’re communicating with customers now is more expanded than it has been in the past. It’s all about trying to connect with customers, in the form of what they want to do with their technology, how they want to buy it, where they want to take it, how they want to stay connected those kinds of things.
And if you look at some of the ads that are out now here in the States it’s a clear customer message across the board, where Dell is a very recognised and well thought-of brand, now being available at a retailer near you.
For example there are ads that our partners support and help us have great visibility here in the States that raise the awareness that Dell is even in retail. For example, there’s a TV ad going on right now that illustrates the availability of Dell ink in Staples.
How large do you see Dell’s presence on the High Street in a year’s time? And in five years’ time?
I can’t speak specifically for the High Street or any other street, but what I can tell you is that our goal is to really reach a lot of new customers and connect with customers we may not have necessarily reached in the past. We’ve now announced partnerships with about a dozen large retailers around the globe, and have really got a good footing.
But there’s still much more to do and we’re going to continue looking for those partnerships where we can help connect with others who we haven’t been in touch with before. I would say stay tuned for some other opportunities that come along the way.