(Consumer Electronics; 01/26/98)

Compaq Computer, seeking to expand in PC retail business, is testing kiosk- based system for selling build-to-order (BTO) high-end machines, sources said. Kiosks are being tested at Best Buy store in Houston, Office Depot outlet in Fla. and Nebraska Furniture Mart in Omaha, sources said. If kiosks, which allow consumers to custom configure Compaq PCs priced at $1,900 and up, prove successful, program will roll out nationwide by 3rd quarter. Best Buy, Nebraska Furniture Mart and Compaq officials weren't available for comment, but Office Depot Chmn.-CEO David Fuente said program wasn't "100% there yet." Several issues remain unsettled, including whether retailer or vendor will pay for kiosk and how PC order will be filled. Compaq is said to be weighing either custom-building PC orders itself or contracting 3rd party. Goal is to reduce PC inventory retailers carry, sources said. Dealers would continue to offer sub- $1,900 Compaq PCs, but would be free of slower selling high-end models. Office Depot has been among those cutting PC lines in last year in moving to 10-20 models per store from 25-35 (TVD Oct 20 p14). BTO market is emerging slowly at retail. Proteva introduced program at several NATM dealers last year, offering PCs ranging from $899 for Pentium 166 MHz CPU to $2,199 for Pentium II 233 MHz model. Orders were placed at store and PC delivered within 2 weeks. Packard Bell/NEC is said to be considering program that would feature shelf display with low-end model. Display would have information on step-up models that would be ordered through retailer. "The build-to-order business is very attractive to vendors because it has limited backside and for us it frees up space for quicker turning models," PC buyer at East Coast retailer said.