Dell's non-store retail store

I wish WordPress, the publishing platform at ZD Net, would let me rotate individual letters in a line of text. There's a perfectly appropriate visual joke to describe Dell's new Dallas retail store that should be used in every reference to the store. Imagine the sign out front said "Dumb" with the "u" rotated counter-clockwise about 25 degrees. According to the Dallas-Forth Worth Star-Telegram:

Dell will open its first store this summer, in Dallas, an experiment that could be a turning point in the history of the Round Rock-based computer maker. The store, at NorthPark Center, will not carry inventory, Dell spokesman Venancio Figueroa said. Rather, it will allow customers to try out Dell's products and order them for delivery, Figueroa said.

"Turning point" is correct. This may be the moment for which Dell is remembered as becoming irrelevant. A failure by Dell to enter the retail business successfully will take more of the company's once-vaunted reputation for customer-focus to history's dumpster. It will also show Dell has failed to evolve its sales strategy.

About 12 years ago, Atari-founder Nolan Bushnell predicted this store-without-inventory in a speech at Digital World. He suggested that customers would visit showplaces where they could try out a variety of products and decide which they wanted, then go online to find the best price. I thought the idea rather improbable at the time, since customers' psychologies tend to delay a purchase if the ability to fulfill the buying decision is delayed.

But Dell has completely missed the boat. Bushnell's vision turned on hands-on comparison shopping before going online to buy. There was a good reason to visit a place, because it promised a wide range of products to help make a decision. This is why car dealers cluster together—they know they are going to be compared. Traditional retail features a few products, so you focus on one and buy. Then you get to take it home and have what's called "buyer's remorse."

Buyer's remorse is the barrier facing every Dell store customer, which has turned retail into a kind of queue experience, where waiting is the outcome of the transaction. There's no comparison to other computer systems, since customers will not have other choices than Dell product in the store. Even after they buy, they don't get the pleasure of using what they've paid for. Dell's order cancellation rate will be much higher than it is used to, as customers go home and start surfing for computers that match or exceed the specification of their new computer, the one they're getting in a week or two.

Note to Dell: Put inventory in your store. Have some techs who can quickly customize the computer—something Apple's stores don't do, except to upgrade memory, because it doesn't emphasize customization—and send customers home with their new system. Instead of sending customers home to wait for their computer, use the same staff that you currently have taking orders to do follow-ups with customers by phone and email from the person they dealt with at retail. See what they need, what's making them happy, what's giving them a touch of remorse. That will require bigger changes than opening a store. It means you have to upgrade customer service and pay attention to customers. The stuff you've been showing the blogosphere you aren't so good at.