Three and a half years after exiting the retail market, Dell Computer is returning to Wal-Mart stores. But not on sales shelves. The Round Rock-based computer company's systems will be used in 1,950 Wal-Mart stores in the United States for interactive entertainment kiosks. At the kiosks, customers scan in a bar code on a compact disc or videotape to see clips from a movie or hear songs from an album.
The kiosks will each be run by two Dell network servers, high-powered computers normally used to run networks of business computers, and a single desktop computer.
The kiosks join other ways Wal-Mart uses technology in its stores. In past months, Wal-Mart has added photo scanners to its greeting card kiosks in some stores. The scanners let customers scan in their own photos and print them out on custom-made cards in less than 10 minutes. Wal-Mart has also ventured onto the Internet, offering discounts on its Web site.
For Dell, the kiosks are another use for its servers, which have been hot sellers since they were introduced last year. Sales of servers and workstations accounted for 10 percent of Dell's $3 billion in revenue in its most recent quarter. Dell is the second biggest server seller in the United States, according to International Data Corp.
Dell pioneered the direct sales model, selling computers without the help of retailers like Wal-Mart. The company did venture into the retail market, but retreated three and a half years ago after an unsuccessful attempt to sell its systems in stores.
Known largely for its desktop and notebook computers, Dell has made its mark in the server market for the past year .
Alex Clarke, a spokeswoman for Wal-Mart, said about 25 percent of the stores that will use the system already have them in place. The stores in Austin, and(including one in Round Rock near Dell's headquarters , are using the Dell systems for their kiosks. The rest of the 1,950 Wal-Marts will have the systems by early next year.
"It's a substantial investment," Clarke said. "But we're trying to make the shopping experience more fun and convenient for customers. They'll be able to see and hear different selections before they actually purchase them."
The Dell servers, which can be hidden between store aisles, download video clips and information from a Wal-Mart satellite at least once a week.
In addition to the 400 movie clips and 9,000 album selections, the servers also will run two hours of continuous broadcasting to be shown in Wal-Mart stores.
Managers will be able to tailor selections offered to suit their customers, said Anne Birlin, a spokeswoman for Dell. "In Texas, they may put more country- western CDs. In other markets, they might use more hip-hop or jazz," she said.
Wal-Mart said the cost of adding the servers and desktop computers to stores will be offset by advertising shown along with the video clips and songs.