Why Microsoft needs stores
Friday, February 13th, 2009
By Stephen Baker, Vice President, Industry Analysis
Yesterday’s surprise announcement that Microsoft hired a retailing professional to help create and manage a chain of Microsoft-focused stores probably isn’t such a surprise. A number of recent activities in Redmond, from the opening of the Windows Experience store to the placement of Windows Gurus within U.S. retail stores, and even the Windows Velocity program’s, PCs tuned by Microsoft, were signposts on a road to more consumer-level engagement.
This opportunity is likely to be a great one for Microsoft and for its partners. Few companies have the product breadth to deliver enough traffic to make a retail site viable, and fewer still have the money and organizational resources to manage it. Microsoft has both: its own hardware products (how great would it be to see product experts demo Surface to consumers in a storefront) and the extensive ecosystem. In addition, as an aggregator of companies under its product umbrellas, Microsoft already does much of what a retailer needs to do - bringing multiple brands with competing products together in a central location to enable potential buyers to see the range of devices and options available to them. People who naysay Microsoft’s ability to do this don’t understand the skills needed to succeed in a retail environment. OEMs crave a physical store where they can show a range of their products in a controlled atmosphere. That was the primary reason for the Apple and Sony stores.
The retail environment for buying consumer technology today suffers because the primary goal of a Best Buy or Staples is to sell as much stuff as possible. The cost of investing in delivering a next generation experience, one that consumers increasingly want to create in their homes, is prohibitively expensive to execute and difficult to pull off when your primary goal is to sell products. A Microsoft store must be both a store and a showroom, where it can sell products and take part in a brand-building exercise. But as just a showroom it will fail. A store needs to be both a great place to explore and learn and a great place to sell and buy. A showroom is stiff and boring without the ability to experience and purchase in the same place; that is what creates the excitement and interest consumers crave. This is what Apple does so well, and it will be Microsoft’s biggest challenge. If Microsoft can execute on this fundamental truth this will be a great move for the company, a great move for its partners, and a great opportunity for the technology industry.
Tags: Microsoft
Consumer Technology | Stephen Baker, Vice President, Industry Analysis | 
February 13, 2009 1:02 pm
Subscribe
