Dell's Confusing Decision To Sell Through Wal-Mart.by
I get that Dell wants to move away from its online sales model and expand its direct sales to consumers. The old model is broken. But selling through Wal-Mart is sending a confusing signal to me.
For several months, Dell has been publicizing its push into design and innovation as differentiators of its PCs and laptops. After a disaster with consumer service, it opened up a conversation with its consumers via social media to understand them better.
All this led me to believe that Dell was shifting to a higher-margin strategy based on innovation and design. That would allow it to differentiate itself from low-cost boxes coming out of Asia.
But the Wal-Mart gambit is clearly a low-cost, low-margin play by Dell. Wal-Mart will move the merchandise but it can only put pressure on Dell’s margins, which Dell doesn’t really need. In fact, Wall Street pushed Dell’s stock down on news of the Wal-Mart deal.
What Dell really needs to do is inject its PCs and laptops with “newness.” Give people lighter weight, longer battery life, cooler colors, easier web connections—stuff like that. Consumers will pay more for what they want and don’t yet have.
I think HP and Lenovo get that message. I don’t know if Dell does.