Dell made its early successes by selling affordable custom built personal computer systems directly to customers with its efficient manufacturing process. Today, it is continuing that tradition via its website with an expanded product line that includes televisions, handhelds, digital audio players, mobile phones, and printers.
From 2004 to 2007, Michael Dell stepped aside as CEO but returned when the company saw lackluster performance and an erosion of Dell’s brand value. When Michael Dell returned, he launched a change campaign called “Dell 2.0” and brought in new leadership to re-evaluate their strategy.
During my internship in the Spring of 2008, I was responsible for researching the luxury market landscape and helped provide insights on whether Dell should enter this space and how.
I researched the history of luxury brands and products, and conducted ethnographic observation and interviews with shoppers at various high-end retail shops. I studied consumer purchasing trends and the social economic reasons affecting those trends. I also looked at Dell’s direct competitors on how they approach high-end product development. Lastly, I reviewed Dell’s strategic roadmap and interviewed key decision makers internally, including the VP of Consumer Products.
My exploration of the luxury market revealed the concept of luxury has been evolving rapidly, from a product definition standpoint and from consumer perspectives. Products today don’t need to be hand-crafted and sold at limited quantities to be considered premium, and premium products that only exude material excess are no longer as interesting as premium products that speak for a social cause. Special experiences are also valued more now than something entirely physical.
I identified four major consumer segmentations that are highly influential in the luxury market and informed Dell’s executives on new consumer purchasing patterns. In a 45 minute overview on my research, I also proposed three potential markets Dell can consider for the future. As an addendum to my project, I created a visual style guide for product designers on materials, patterns, colors, and ideas to consider when creating a premium product. Some of those inspirations made their way into the premium Dell Adamo line.