Walmart and Dell to Take On Best Buy’s Geeks
Dell has launched a pilot program with Walmart to test an in-home installation and repair service for a wide array of consumer electronics from big screen televisions to laptop computers.
The new service known as “Solutions Centers by Dell” will be located at 15 Walmart stores in the Dallas area. The service will bring with it immediate comparisons to Best Buy’s Geek Squad and Circuit City’s Firedog services.
According to a statement by Walmart, the pilot will give the retailer “an opportunity for us to understand more about what our customers need and expect in home installation and technology services, within a specific market.”
The test with Dell continues to move Walmart toward its stated goal of developing the higher end of its consumers electronics business. The retailer has begun selling more sophisticated equipment and begun selling extended warranties for items that come with higher price tags than those normally associated with a Walmart shopper.
The cost of services offered by the “Solutions Centers by Dell” are priced much more with Walmart shoppers in mind. The cost of installing computer memory by Dell’s team will cost between $29 and $99. A comparable service offered by the Geek Squad will run $39 to $139.
Discussion Questions: Will there be sufficient demand from Walmart’s regular customers for the “Solutions Centers by Dell” to justify the program? Will the program and higher-end merchandise bring new shoppers into Walmart that might otherwise shop at Best Buy, Circuit City or other consumer electronics retailer?
During this economic downturn, Walmart has looked more appealing to customers with its low price positioning. This is another good idea in the list of recent activities by the retailer. The program will be justified by any new customers brought into the franchise.
It’s also a great match for Dell. In the category, they are not in the high-end, so there’s a good chance their customer base already shops at Walmart, and this will provide a brick and mortar destination for future and current Dell users.
This marriage doesn’t make sense. Dell positioned themselves with the kiosks in airports where I would expect them to want to be to attract something other than the low price shopper.
Then, they give up on that idea and decide to position themselves in Walmart? Where is Dell going with their image?
Are we definitely going to see Dell people in a Walmart, or just the person that earlier today worked in the snack bar now being the person to represent Dell? If that is the strategy, I see that as being as much of a blunder as Starbucks allowing people like Hudson News hanging their sign and ‘pretending’ to be a Starbucks.
Dell; give up on this idea and figure out who you want to be in the marketplace.
I look at this the other way: if Walmart is really going to compete in the higher-end CE segment, customers are going to expect this level of service. If I want a $1500 flat-screen TV, I want it installed; if Walmart doesn’t offer this service, I probably won’t buy it from them.
Also, this could help Walmart by getting people into the store to buy the TV and then making a profit on the services.
If the Dell/Walmart service relationship is profitable for both parties, more power to them. Some of the comments above question whether Dell should be positioned in alignment with Walmart’s customers. It’s been clear for some time now that Dell wants the low-end shoppers, not just businesses and high-end sophisticates. Dell frequently uses TV ads, particularly around Christmas, to blast low-end price point offers. No better fit for that segment than Walmart.
I just can’t imagine turning over my computer to a Walmart employee, so they’ll need to show me that they have qualified people to “man” their program.
I think that they should build the service into the price of the computer or TV installation and call it free. Now that might just get my attention.
For now, I’ll just stick with Best Buy if I can’t get a friend or relative to help me with my needs.
Solving problems, especially in the computer and electronics area, will result in a happier customer, lower returns, and a higher ROI from a very profitable service arm of the organization. What is there not to like?
The reason that every one else is doing this is that it works! Expect the club stores, Sears/Kmart and the other major electronics retailers to either offer this service or do it themselves (because it is so profitable).
The real opportunity is to apply the Walmart pricing model to in-store and home computer assistance. By way of a comparison, the Best Buy pricing is similar to “department store” pricing; the Walmart pricing model is “low price everyday.” Walmart and Dell can create a major new revenue stream if they price their services in line with the traditional Walmart pricing model. And, the market will continue to expand as technology gets more and more complicated and more and more computers and electronics flood the market.
Walmart should do well here. They are going to appeal to a broader range of consumers who cannot afford the higher Best Buy prices. The question is, will Walmart be able to deliver on the service end?
Since Walmart has the reputation for lower priced goods, I am not sure that consumers would be as trusting of this sort of enterprise.
Of course this is a great way for Walmart to gain credibility in the CE space and demonstrate that it is serious about being a resource, not just a low price leader that leaves its customers to sink or swim after the sale. The biggest benefit may be Dell’s in the end; however. They will have the word “solution” associated with Dell in hundreds or thousands of stores along with the accompanying brand boost; the centers will put the Dell name front and center. What a great way for Dell to make up for lost time in the direct-to-retail space.
By using Dell and its brand name to handle consumer electronics servicing, Walmart immediately gives itself a boost. Walmart’s buying power, even in the highly competitive, lower margin consumer electronics space, will be a magnet to consumers who tend to price shop for products in this category. Having Dell branded technicians service the products provides instant credibility.
This move will also put pressure on Best Buy and Circuit City to lower their prices for service.
I look forward to seeing if the test works and WM’s plans to roll out this service.
This program gives Walmart a chance to step into the void likely to be created if Circuit City doesn’t survive. It also gives them a “halo effect” for better customer service than the Walmart shopper is likely to encounter elsewhere in the store. It doesn’t do any harm for Dell’s reputation, either, which has been tarnished for the past few years by a slippage in their hallmark customer service.
I am in love with the idea of Walmart and Dell adding on a “geek” program, if I might assume that the program will be organized and executed adequately and properly. 90% of all households use at least one computer and yet less than 5% know what to do when the computer malfunctions. And yet for consumers that use certain brands (hint, hint) it’s often very difficult at present to get timely assistance and repair without having to “go overseas” to make it happen. Walmart can be a tremendous source for consumers and it serves their own target market very well.
Walmart certainly gets credit for continuing to experiment with new formats and delivery systems. The success of Best Buy’s Geek Squad highlights the consumer need for assistance after purchasing many electronic products. If Walmart continues to expand its offering of electronic products providing service for consumers while setting up and/or using those products makes sense. However, as someone remarked earlier, the service needs to be run well.
Walmart’s success is mind numbing. They combine the ability to be ground breakers and at the same time are brilliant fast followers. This is just another example of Walmart learning from their competition.
Will it work? It doesn’t matter if you’re upper income, middle income or lower income; very few know how to use, set up or fix a computer. We’re all looking for help! Here comes Walmart to the rescue, again.
I think Walmart may have an image problem in this area. If I’m looking for a consumer product solution, Walmart is the last place that would come to my mind!
The real question is why do we, as consumers, need to hire people to help us use a product? The electronics industry is the only one that I can think of that requires the consumer to plead for, pay for, or ask a friend, to help them understand how to use a product.
If a manufacturer, after they develop a product, asks regular consumers to use the product, without having to have a degree in electronics, and they can successfully; then the product is ready for mass appeal. It would eliminate the need for off-shore help desks or geek squads.
I hope that the level of expertise is a notch above Walmart’s typical stock boy, store clerk or cashier…all of whom know very little about the very products they interact with. Walmart is probably the only store I shop where I definitely know more about the products than they do.
As for in-home PC service, I’d never trust Walmart. I know computers pretty well and can diagnose most problems myself. If it is a tricky issue I need help with, I’d go to a specialized store that deals with tech. Even if Walmart is cheaper and offers a full refund, no thanks. I’d rather pay an extra $30 and have a better chance of resolution. I highly doubt Walmart’s PC service will match or exceed other retailers.