Dell joins Wal-Mart and Tom Shay asks why

This ‘marriage’ makes no sense to me. Dell has long been using kiosks in airports and some of the better malls. This would indicate to me they are looking for the upscale customer; one that is not shopping just on price. Then, they decide to join with Wal-Mart. Are we to expect that the person we are talking with in Wal-Mart is a Dell employee that knows computers? Or might this person be the individual that was working in the snack bar about 30 minutes earlier? I don’t think I want this person handling my computer.

The only thing I can compare this to is Starbucks allowing other businesses to open a ‘Starbucks’ within their business. Businesses open a ‘Starbucks’ that looks like a ‘Starbucks’, sells ‘Starbucks’, but doesn’t take the Starbucks cards or have employees that are educated in the Starbucks culture. The customer service is horrible (try ordering a Starbucks drink in an airport ‘Starbucks’ operated by Hudson News).

Hey Dell, take a less from the mistake made by Starbucks. Figure out who your customer is and don’t try to be everywhere at any cost.

Dell and Wal-Mart test tech services

By Jonathan Birchall in New York and Kevin Allison in San Francisco

Published: July 16 2008 22:41 | Last updated: July 16 2008 22:41

Dell, the personal computer maker, has launched a pilot scheme with Wal-Mart to provide home installation and repair services, mimicing the successful Geek Squad operation of rival electronics retailer, Best Buy.

The move follows Dell’s decision to start selling its desktop computers through retailers including Wal-Mart last year, ending over two decades of dependence on the direct sales on which it built its business.

Wal-Mart says it is opening 15 “Solution Centers by Dell” at stores in the Dallas area, which it says will provide home set-up services for high-definition TVs and home theatre installations, as well as computer repair and advice on wireless technology.

The retailer said in a statement it currently had no plans to expand the pilot, which it said would provide “an opportunity for us to understand more about what our customers need and expect in home installation and technology services, within a specific market”.

For Wal-Mart the move reinforces its push into selling higher-end consumer electronics, such as large flat screen TVs, which frequently require professional installation. Over the past two years, it has also introduced more leading brands into its stores, and started selling extended product service warranties, designed to encourage bigger-ticket sales.

The sale of both services and warranties have been an important source of revenues for retailers in the low margin electronics business. Circuit City, the third largest US electronics retailer, said its Firedog installation service had revenues of $269m last year, while warranties and services together provided $825m in revenues, or 7 per cent of the $11bn total.

Wal-Mart’s started aggressively expanding its consumer electronics offering almost two years ago, launching a wave of price-cuts on flat screen televisions which significantly increased pressure on its rivals. CompUSA stopped trading earlier this year, while Circuit City, whose shares have collapsed over the past year, has put itself up for sale.

The Wal-Mart/Dell pilot’s servicces are priced below Best Buy’s Geek Squad, charging, for instance, $29 or $99 at home for the estimated 20 minutes needed to install computer memory in store, against the Geek Squad’s comparable $39 and $139.

Copyright The Financial Times Limited 2008

Sears, Tweens, the Internet and comments from Tom Shay

It is never too early, or toward too young a customer, for your business to work to get their image in front of the customer. Take a look at what Sears is doing.   Tom

Sears Tries to Alter Image, Co-Opt Cool in Web Push

Traditional Retailer Partners With Facebook, MySpace, Vanessa Hudgens in Hot Pursuit of Tween Market

By Natalie Zmuda

Published: July 14, 2008

NEW YORK (AdAge.com) — The coolest digital destination for kids this fall: Sears, Roebuck & Co.

The traditional retailer known for its print catalog is taking a decidedly untraditional approach to back-to-school marketing, blanketing the online world by partnering with just about every youth-focused social, virtual and entertainment network out there — all in hot pursuit of 8- to 14-year-olds that don’t exactly see Sears as fashion forward.

Sears’ back-to-school website features Vanessa Hudgens, star of ‘High School Musical.’

“Our belief is that, particularly for this tween market, there’s a little bit of undiscovered opportunity within Sears,” said Richard Gerstein, Sears’ chief marketing officer. “Part of what … Sears needs to do is build credibility with this tween market. There are a lot of people out there that have that credibility, so we’ve partnered with them to help us do that.”

To co-opt that cred, Sears is teaming with partners such as Facebook, MySpace, Seventeen, CosmoGirl, Nickelodeon and Disney, which are creating custom content or sponsorships for the retailer, and with Addicting Games, FunBrain and Neopets, which have developed exclusive Sears games. There will also be virtual Sears boutiques, fashion shows and competitions featuring apparel for avatars within virtual environments including Zwinky, Meez, WeeMee, The N and Poptropica.

Each tie-up will serve to drive customers to Sears’ “Arrive Lounge,” a key part of the retailer’s overall “Don’t just go back. Arrive” theme for the season. The website features Vanessa Hudgens, star of “High School Musical,” as well as behind-the-scenes footage from back-to-school commercials with the actress. Sweepstakes, downloads and fashion highlights linking to Sears’ e-commerce site are also featured.

Gamble
Mr. Gerstein declined to discuss details of the retailer’s overall budget or say what media budgets are losing funding as a result of the increased focus on digital programs. “It’s definitely a much bigger element of our back-to-school program than last year,” he said. “And digital continues to grow as an element of our marketing program across our company. We invest heavily in search, digital and other programs.”

While digital can be a less expensive alternative to flashy TV campaigns, it’s still a gamble for the struggling retailer. In its most recent quarter, ended May 3, Sears Holdings, parent company of Sears and Kmart, reported a $56 million loss, as sales declined 5% compared with the same period a year ago. According to Ad Age’s 100 Leading National Advertisers report, Sears Holdings’ market share slid 0.2 points in 2007, while overall ad spending was down 1.4% to $1.6 billion.

Despite its financial troubles, Sears is being both creative and aggressive when it comes to attracting tween customers during the all-important back-to-school season, its partners said. “It’s emblematic and important because Sears is a relatively traditional marketer in some ways, and this is a really impressive, innovative program that is using all of the coolest things that Web 2.0 has to offer,” said Samantha Skey, exec VP-strategic marketing at Alloy Media & Marketing.

By creating clothing for tweens’ avatars, Ms. Skey said, Sears is further entrenching itself with those customers. The retailer is also creating the opportunity for its branded items to live well beyond the life of the campaign. For now, Mr. Gerstein said, the campaign is somewhat open-ended.

“Obviously, back to school is when we put a focus on this market,” he said. “But we’ll let our customers guide us. Where they have interest, we’d be happy to … invest.”"

Sears’ creative agency of record is Y&R, Chicago, while Whitman Hart, Chicago, handles digital. MPG, along with its Boston-based Media Contacts unit, handled media for the campaign.

Business Week on retailing and Tom Shay’s comments

There are several aspects of seeing this happen that bothers me. The first is that businesses are waiting until there is a problem before deciding to do something to get people in the door. Notice that the article talks about businesses teaming up; this sounds like power promoting to us. Power promoting is something we have been promoting for over a decade. And then the aspect of cutting prices? (See my comments of earlier today regarding Wal-Mart) This is not the time for a retailer to decide to change their image of what they want their business to me. And by dropping prices toward a new image, it is tough for a business to go back to the previous price image.

Take a look at what Business Week has to say by following this link:

Business Week: Doing Whatever Gets Them in the Door

Tom Shay’s thoughts on Baltimore Sun article about small business

Take a look at this article from the Baltimore Sun about ways a small business can do something extra during the challenging economic times.

Baltimore Sun article: Stay on top of buyers’ needs and preferences

Local First Arizona organization is a real winner

This local organization should be duplicated in every state and province. As i get the email updates from this organization, I am always amazed at what they are doing in their communities. Take a look at this page from their site and see what a great promotion they have going:

Local First Arizona Promotion

The governor of Arizona has endorsed it. Notice that there is a ‘golden ticket’ to give participants an extra enticement to shop with participating businesses, and I very much like the idea of asking local dignitaries to tell you of their favorite places to do business.

Lehigh Valley’s ‘Think Independent’ campaign

While we don’t have a sample to include in the blog to show you, I would suggest that you click on the first link below to see a very create local promotion. This type of print promotion would work well in conjunction with a community utilizing the National Independent Retailers Week event that we created. National Independent Retailers Week is held in July of each year.

Here is a link to their page of sample posters:

Samples of Lehigh Valley’s Think Independent Posters

Here is a link to the front page of their website:

Sustainable Business Network of Lehigh Valley, PA