STAPLES BUYING DELL INK BY THE BARREL

[Anonymous]

STAPLES Buying Dell Ink By the Barrel
Executives
at Staples say their new deal with Dell is already paying off, but
their focus for Dell now might be considered something of an odd
strategy. Mike Miles, Staples president and COO, said this to analysts
during Staples’ quarterly earnings conference call Tuesday:We’ve seen a
steady ramp up in sales since the product launch as customers have
shown strong interest. The combination of hardware, ink, peripherals
and extended services plans makes Dell a winner for both sales and
operating income.We’ve just started to shift the focus of our
advertising and promotion to ink and toner consumables and expect these
higher margin skus to continue their strong sales ramp throughout 2008.
As the only retailer offering a full line of Dell ink we have an
opportunity to drive substantial new customer traffic. Sales in other
brands have not seen a material negative impact due to the successful
Dell launch and we have planned a number of marketing initiatives to
drive continues sales of Dell and believe this product line will be a
big win for us in 2008.

Printer ink hasn’t exactly been a
product in Dell’s wheelhouse. In fact, judging by OEM numbers over the
past 18 months from Lexmark – – which has listed Dell as one of its
biggest OEM customers – – printers in general have been closer to a
bust for Dell. The brick-and-mortar retail segment is a different
animal for Dell, so maybe Staples’ strategy will work. But of all the
areas for Dell to compete with rival Hewlett-Packard, whether retail or
commercial, printers and consumables would appear to be much less
favorable than other areas.

[Author]

March 5, 2008 at 2:51 PM