Tech Shout!

Thanks to an expansion of a pioneering project in 1,200 of the 3,200 Wal-Mart stores in the United States, Wal-Mart customers will be able to design their own computers. By the fall of this year over 200 stores will be joining the program, and the company added that by 2007 there would be more firms joining in aswell.

The new program is an exit from Wal-Mart’s current approach of selling pre-packaged systems. Consumers would be able to choose various components to build their own PC, including processor, monitor and other computer specs.

It is also an effort by the company to add to its profit margins by focusing on high-margin products. Traditionally, Wal-Mart consumers have stuck to much lower margin items, such as food.

Nonetheless, unlike build-to-order providers like Dell, the customer would be able to take the computer home immediately, saving on transportation and shipping costs and other related expenses associated with ordering a system online or through a mail order catalog.

While most industries fear Wal-Mart’s entry into a category, analysts claim that this move will not change much. Since the dealer is aiming to allow the consumer to take home computer systems, customisation is restricted.

Companies like Dell and Gateway, which have become experts at the build-to-order business model, are able to offer much more customisation since the computers are not shipped immediately. Secondly, these companies make a lot of money through business contracts rather than consumer sales, a market Wal-Mart’s program is not targeting.

However analysts agree that if the company extends its low-price philosophy into the computer sector, it could become quite popular among its loyal customer base.