Alienware Expands Its Kiosk Program

By Doug Olenick On Nov 20 2006 - 8:00am

One year after the opening of Alienware's first kiosk in the Miami area, the company will add two more in McClean, Va., and West Nyack, N.Y., and the company is giving serious consideration to opening its own stores.

Company founders Nelson Gonzalez, CEO, and Alex Aguila, COO and president, said the new kiosks will open in December in high-traffic malls in each city. The company was pleased with the original kiosk's success, which was located in the Dadeland Mall very near the company's Miami headquarters, and the role it played in expanding Alienware's customer base. The company announced in February its intention to expand the kiosk program, but had held back on announcing the locations until now.

The kiosk was not Alienware's first brick-and-mortar venture. Three years ago it partnered with Best Buy, but the program did not work out, said Aquila.

"Our products have to be shown in a certain light which Best Buy was not able to do," he said, but the experience did reinforce the concept that Alienware needed to expand its retail reach to people who do not buy online so the kiosk program was born.

The new facilities will closely resemble the original, said Gonzalez, with each carrying a small amount of inventory, but its primary purpose is to steer people toward making a purchase through Alienware's online store. The kiosks will carry only a few flat-panel SKUs from its new owner Dell. The two company executives said Dell has been very careful to give Alienware its own operating space, as per the sales agreement. In addition, Dell will refrain from selling Alienware products in its stand-alone kiosks, he added.

Looking past the kiosk program Gonzales and Aquila are giving a serious look at developing a true store along the lines of an Apple store. Gonzales said that while the company is willing to take risks when it comes to developing new PCs, it is very conservative in its business practices.

"We still don't know much about retail at this point," said Aquila, "It is quite expensive, but we think it could also be quite successful for us."

By using an old-school approach to its nascent retail operation, the executives will study how well the new kiosks perform before the next step is taken, which is unlikely to happen for at least a year.

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