Online retailer Dell is chasing mass market retailers in Australia as well as telecommunication Companies in an effort to survive. The Company that stared off online, building PC’s to order has been hit by the recent economic downturn and a move by consumers, to buy their PC’s in retail stores as opposed to online.
18 months ago Dell moved to selling their products through retailer Officeworks and Dick Smith as sales online slowed, now they are attempting to lure JB Hi Fi and Harvey Norman to sell their products.
Yesterday senior executives of Dell met with JB Hi however no decision has been made to sell Dell branded products according to JB Hi Fi CEO Richard Uechtritz.
“We have met with Dell and they are trying to get us to stock their product. What they are saying is that get big traffic to their web site but only a small percentage, are buying a Dell product today. People are visiting the Dell site to research a product but not necessarily buying a product there. They are instead going out to a retailer to” said Richard Uechtritz..
“We will not be stocking Dell at this stage” he added.
It has also been revealed that up to 70% of people who do press the Dell cart to buy a PC, bail on the purchase prior to concluding the transaction.
Research also shows that a consumer today is not prepared to wait for a Dell shipment when they can walk into a local store to buy a PC, notebook or netbook.
A senior executive of another major retailer who Dell is chasing to stock their product said “The Dell model is broken, while they might get the corporate deals because of price, consumers today want to buy instantly they also wanted branded notebooks such as HP, Toshiba, Acer or ASUS. There is so much choice in the notebook and netbook market that Dell will find it difficult to survive in this market without major retailers behind them”.
Recently Dell reported a 48% decline in profits with the Company desperately slashing costs around the world. They said that they are hoping to take $4 billion of costs out of its budget by 2011, up from the previous goal of $3 billion announced last year.
Though Dell managed to ship 18 percent more consumer PCs for the quarter, because consumers are gravitating toward cheaper notebooks and Netbooks, revenue dropped 17 percent.
