Wal-Mart to Sell Dell Desktops in Stores this June
Wal-Mart Stores, Inc. and Dell, Inc. announce that the two companies will partner to sell Dell Computer desktops in Wal-Mart stores nationwide, beginning June 10, 2007. The agreement includes the launch to two Dell products offered …
Context & Ripple Effects
The question CNET posed back in November 2005 — whether Wal-Mart would sell $398 notebooks and desktops under its own push into cheap PCs — gets a different answer today: the machines on Wal-Mart's shelves will carry Dell's name. For a company whose entire identity was built on selling direct and skipping the retail middleman, putting the Dimension E521 in more than 3,000 U.S. Wal-Mart locations from June 10 is a structural retreat, not just a distribution tweak.
The timing matters: Dell launched its Vista lineup in January (taking Vista orders the night of the consumer launch), and today's announcement landed the same week Dell began shipping Ubuntu Linux systems — two signals that the direct-order playbook is being stretched in every direction at once. The story traveled widely on pickup from CNET, ZDNet, the Associated Press, and Dow Jones' Tech Trader Daily, with the latter noting the deal also covers Sam's Club.
First-order effects
- From June 10, 2007, shoppers can buy Dell desktops off the shelf at more than 3,000 Wal-Mart stores plus Sam's Club, ending Dell's reliance on phone- and web-configured orders for mainstream buyers.
- Wal-Mart gains a tier-one PC brand alongside its budget house-brand computers, strengthening the electronics aisle it has been rating suppliers on since March's sustainability-scorecard move.
Second-order effects
- HP, Gateway, and eMachines now face Dell head-to-head on Wal-Mart's shelves, where price per box — not build-to-order customization — decides the sale.
- Other big-box retailers have an opening to court Dell for their own aisles, since the exclusivity question is now live and Dell has demonstrated willingness to share shelf space with a mass merchant.
Third-order effects
- If the pattern holds, the US PC market reorganizes around retail distribution, eroding the build-to-order advantage that defined Dell and compressing margins across consumer desktops.
- Mass merchants consolidate gatekeeper power over which PC brands reach mainstream buyers, echoing the supplier-pressure dynamics Wal-Mart already applies through its environmental scorecard.
The trend: Direct-sale PC pioneers are conceding that mainstream volume runs through big-box retail, with Wal-Mart emerging as the decisive channel for consumer computers in 2007.