Will Dell's Plan to Sell PCs Via Wal-Mart Harm Brand Image?

28 May 2007

ROUND ROCK, Texas: As of June, world number two computer maker Dell will vend its low-end PCs via Wal-Mart outlets heralding, according to a Dell spokesman, "the first step in an evolving global retail strategy".

It is the first concrete step by chairman/ceo Michael Dell (pictured) to diversify from the company's longstanding but ailing direct-sales business model [WARC News: 18-May-07].

"Customers are telling us they want more and new ways to purchase our products," says the spokesman. "We're committed to finding new ways to reach more customers and this is one example of a new approach."

Industry observers, however, are weighing Dell's strategy. Forrester Research analyst J P Gownder acknowledges that Dell could gain useful retain experience from the deal.

He believes it will also help the former global market leader to regain share lost to Hewlett-Packard at the low-cost end of the market.

"They are selling their lower end line, so it's compatible with the Wal-Mart story; but I don't know if it's a great brand move because Dell is trying to sell itself as an elite brand," opines Gownder.

Hitting Wal-Mart's aisles in 3,000 North American stores from June 10 will be two of Dell's Dimension desktop models, with a price tag south of $700.

Data sourced from Financial Times; additional content by WARC staff