From Businesses to Consumers: Gateway CEO Hints at New Retail Strategy

May.15.07 | About: Gateway Inc. (GTW)

A new emphasis on sales to consumers rather than to businesses could be in the cards at the Gateway (GTW) computer company in Irvine, Calif.

Ed Coleman, the company’s chief executive since September, gave a glimpse of how he's thinking about Gateway’s future direction, Thursday night.

“You’ll probably see us focusing more on the consumer marketplace than on the business marketplace,” Coleman said during his keynote speech at the awards dinner of the AeA high-tech trade group.

Analysts have repeatedly criticized Gateway for inability to attract more business customers.

During the Newport Beach event, Coleman also spoke about changes in consumers’ decision-making process. When consumers buy a desktop computer, their focus is on performance, he said, but that's not so for notebook computers..

“When you buy a notebook, you’re making a style statement. ... It’s a very different buying decision.”

As a result, he said, computer companies will need to make their laptop computers more stylish.

“We’re going to be looking globally for great design houses,” Coleman said.

A further result, he said, is a shift from buying on the Internet to buying in retail stores – because consumers evaluate style more easily when they can hold the product in their hands.

"Fortunately," he said, "Gateway acquired a retail-centric company a few years ago, which is now our primary retail channel." That refers to the 2004 acquisition of eMachines, which employed a third-party retailing strategy that Gateway continues to use.

(This item was revised on May 15 to fix an incorrect paraphrase of Coleman's remarks, which now are quoted exactly in the last paragraph.)

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