Gateway Completes Pilot Store Rollout

NEW YORK— With the opening of Gateway's sixth and final pilot store here this month, the only carryover from the old Country Store motif is the black and white Holstein cowhide cartons.

The store, located on Union Square in Manhattan, had been operating for several years under the old Country Store design, but was refurbished to better accommodate Gateway's fast-growing CE product line (see story, right). And like the other pilot stores, which dropped the Country Store label, the New York City location is built around a "hearth area" that is anchored by a line of flat-panel and rear-projection televisions with seating areas for customers.

The Manhattan store, one of the smallest in the system, differs from the other pilot locations by having a more urban, industrial look with a bare urban, industrial look with a bare cement floor, exposed steelwork and an unfinished ceiling. The other units, located in Chicago, San Diego and San Francisco, have a plush, living room setting. The most obvious change with the new layout is the preeminent position CE products are given. All are placed at the front of the store with the computers and peripherals stocked toward the rear.

Similar though less extensive retrofits were performed on the balance of Gateway's 190 locations over a three-month period beginning last February, in order to integrate the new CE line and change the format from showroom to selling floor. Leading the overhaul was Bill Parker, president and general manager of Gateway retail stores. "Customers were surprised when they walked in. They weren't sure they were in the right store," he recalled.

Parker said the new format and CE assortment has energized the sales team, is bringing in new customers, has increased the frequency of visits, is raising the average ticket, and will allow Gateway to "go against the specialty guys."

Stores are now supplied from three Ingram Micro distribution centers rather than one central facility, and sales associates are hired for their people and teaching skills. Gateway's cultural shift from "technospeak to easy speak," as Parker described it, is also reflected in easy-to-understand shelf-talkers that clearly explain Gateway products and their applications.

The result, said executive VP/consumer Scott Edwards, is a value specialist with consultative services that aims for the "mass middle" between the big-box chains and A/V specialists.