Wal-Mart to begin selling Dell PCs
Dell plans to begin selling desktop PCs in Wal-Mart Stores in the next few weeks, the first move in a major departure from its decades-long sales strategy. — Wal-Mart plans to sell the Dimension E521 in more than 3,000 retail locations in the United States …
Context & Ripple Effects
The move answers a question CNET posed back in November 2005, when it asked whether Wal-Mart would sell $398 notebooks and desktops under a major brand — at the time, only white-box makers played there. What changed since: Dell's 2006 addition of AMD chips to its desktop line gave it an aggressively priced machine suited to discount retail, and the January 2007 Vista launch created a refresh cycle worth chasing on store shelves.
For three decades Dell built its business on direct orders, so putting the Dimension E521 in more than 3,000 Wal-Mart doors starting June 10 is a structural break, not a promotion. It lands the same week Dell began shipping Ubuntu 7.04 systems — two experiments in widening how customers can buy its machines.
First-order effects
- Dell's direct-sales-only model ends in practice: the Dimension E521 reaches buyers who never visit dell.com, and Wal-Mart gains a tier-one PC brand alongside its usual budget lines.
- HP and the other incumbents of the retail PC aisle suddenly share shelf space with the company that undercut them by skipping stores — now competing inside their strongest channel.
Second-order effects
- Retail shelf pricing pressure tightens: if Dell's retail boxes sell, rivals must match Wal-Mart price points during the Vista upgrade window, squeezing margins across the aisle.
- Dell's own direct channel faces internal tension — retail units priced near configure-to-order systems risk cannibalizing the phone-and-web business that defined the company.
Third-order effects
- If the Wal-Mart test holds, the industry's clean split between 'direct' vendors and 'retail' vendors erodes toward hybrid distribution, where brand reach matters more than the sales model itself.
- Mass-merchant shelves become a primary battleground for consumer PC share, shifting leverage toward retailers like Wal-Mart that control access to first-time and budget buyers.
The trend: Consumer PC distribution is consolidating around mass retail, forcing even the archetypal direct vendor to sell where the customers already shop.