When Is a Store Not a Store?

You walk into a store. You find a product that you like. You ask the salesperson for one. You’re told that they don’t have any in the store. In fact, they don’t have any of the products on hand for sale. Huh?!

It sounds crazy, but that’s exactly what Dell has done in opening its first company-owned store, in Northpark Center Mall in Dallas, Texas. And later this year, a second one will open in West Nyack, NY. But you won’t be able to take home any Dell products from these stores. These new operations are actually a logical extension to the 170 kiosks already in operation in malls and airports around the country; they don’t stock any product, either.

Instead, customers are able to place orders for the products, which are delivered directly to the buyer’s home or office. This has been successful, as it gives prospective buyers a chance to see and touch the products on display, an experience not available over the Internet. And you get to make a traditional purchase face to face with a real person, which some people may prefer over ordering on the Internet. And these stores will let Dell display more of the company’s products along with various accessories than 12 or so items that fit in a kiosk.

Buying a display product — especially an HDTV — is difficult using the Web, as you can’t really see what you’re getting. This is one reason that many studies have shown that people research their HDTV purchase on the Internet, but then buy locally at a retail store. Dell’s kiosk and store approach preserves the company’s direct sales strategy. And unlike Sony and Pioneer who also have opened retail stores, Dell doesn’t have to worry about competing against other retailers who also carry their products.