Dell Expects To Withstand Challenging Economy At Retail

By Colleen Bohen On May 19 2008 - 6:00am




Dell executive Erik Day, merchandise manager for Dell's XPS brand, is not expecting the company's sales through major chains to be affected by the current economic downturn.

"We're the new kid on the block," Day said, referring to the manufacturer's relatively new position on mass retailers' shelves. He said he expects the company's novelty factor with retail consumers to help it weather the current economic storm.

Overall, Day reported that Dell is happy with its move into the retail space. He said that its partners, Wal-Mart in particular, had responded positively to the manufacturer's attempts to meet the needs of their customers with product offerings like sub-$1,000 product bundles.

According to Day, Dell has plans to increase its retail presence in the future. "Our goal is to get up to 30 percent of the retail space soon," he told TWICE at a recent press event, held here.

Notably, the company recently began selling its wares through the Army-Air Force Exchange, and he said it has plans to add more regional dealers down the line.

Dell's Patrick Griffin, director of its Inspiron laptop division, assured TWICE that the company's ever-expanding retail presence is only helping to drive business and isn't causing a conflict with its traditional direct-to-consumer business. He said he couldn't provide specific numbers, but said, "It's certainly not cannibalizing our direct sales."

Regarding the company's proprietary retail presence in the market, as previously reported, the company closed its 140 mall kiosks in the United States earlier this year. However, its Dell Direct store in Dallas, which it opened in 2006, remains open. Griffin told TWICE that the store will stay open and will continue to function as a showcase space that the company will use as a test venue to gauge consumer reaction to new products and concepts.

Looking ahead, Griffin addressed the company's back-to-school expectations. He said, "Every year [back to school] comes and every year the customer buys." Griffin said that he recognized that the current economic situation is "very variable," but said, "Generally people are still positive [on their outlook for the back-to-school-selling season]."

More immediately, Griffin told TWICE that Dell is planning promotions, particularly on its direct-sale Web site, targeted at customers who have just received or are about to receive their economic stimulus checks from the government. He said consumers can expect a variety of promotions and discounts; in particular, he said to expect offers that "match the rebates."

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