RealTime IT News

Gateway Offers Instant Gratification

Turning the tables on the built-to-order business ideal that Gateway, Inc. pioneered in the 1980s, the company launched a marketing campaign today that will send PC buyers home with pre-built computers in hand, and will hopefully lure more foot traffic to its 275 Country Stores and boost the company's mediocre PC sales.

Calling it an "Instant Gratification" campaign, most Gateway stores that formerly carried no inventory and only acted as showrooms for Gateway products, will offer a selection of take-home pre-built PCs.

But while Gateway's newest ploy to slash prices and increase store traffic may appear to be following a new trend in PC consumerism toward more practical, fast, and instantly gratifying PC purchases, there is some speculation that Gateway might be making a migration from its signature built-to-order fundamentals to a cheaper, more mass market persona in an effort to stay afloat in an increasingly indifferent PC market that has so far shown no signs of post-recession rebound. Not to mention the mounting threat from competitors Dell, Compaq, and IBM.

Gateway has met with unerring struggles this past year including declining profits, lowered earnings reports, layoffs, and a fairly drastic attempt to curb overhead by shuttering 62 nationwide Gateway Country Stores. The once untouchable PC maker may have more riding on its newest "cash-and-carry" marketing gimmick than meets the eye.

Gateway will test drive its new program with the Gateway 300S that comes with an Intel Celeron processor, Microsoft XP, an Epson printer, and a 40GB hard drive; and the Gateway 500S, with an Intel Pentium 4 processor, a CDRW/DVD combo drive, a 15" LCD flat panel screen, and a variety of software bundles.

Additional Gateway desktop and notebook PC inventory will eventually be added at a future but undetermined date.

Gateway shoppers will still have the option of ordering customized PCs, if they don't mind the 5-7-day wait for its arrival.

"When we began opening retail stores five years ago, there were clear advantages to carrying no inventory, both for our customers and for Gateway," said David Turner, Gateway senior vice president of sales and marketing. "But today, customer service and convenience are as important as the ability to custom order a PC back then. This is about expanding our customers' choices. We know that many customers want a standard Gateway PC instead of custom order, and they want it today."

According to Brad Williams, a Gateway representative, Gateway isn't backing down from its retail strategy and doesn't plan to close any more stores.

"We continue to believe that our stores are one of our greatest differentiators in marketing our brand and reaching out to our customers,'" said Williams. "Carrying select amounts of inventory in some stores is the right move. We tested this. We know it works, and we know it brings incremental sales."

Gateway shares fell 17 cents this week, or nearly 3 percent, to $5.61.