Retail experts: Microsoft store strategy smart, not shameful |
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The exterior of Microsoft's new store in Scottsdale, Ariz. (Microsoft photo)
If not for the Windows logo outside, people walking through the glass entryways at Microsoft's new retail stores might be surprised to find Windows PCs, not Macs, on the large cedar tables inside.
The similarities to Apple's stores are tough to miss: open layout, employees carrying mobile checkout gear, a dedicated children’s area, an “Answers” counter in the middle, a training theater in the back.
Those elements and others have drawn more than a few guffaws in the technology industry, reinforcing Microsoft’s reputation for copying Apple. It’s a store that “only a serial copier could love,” declared MacDailyNews.com.
But some retail experts say the typical computer geek’s reaction misses an important point. Imitation isn’t mere flattery in the retail business, it’s tradition. And in this case, they say, it looks pretty smart.
“Do we beat them up because they didn’t come up with a creative, different approach? Not in retail,” said analyst Jeff Roster, vice president for retail industry market strategies at the Gartner research firm. “If something works and you can leverage it, fine. That’s how retailers do it, and as a matter of fact, that’s the right way to do it. Why re-create the wheel?”
The first two Microsoft stores opened in October in shopping malls in Scottsdale, Ariz.; and Mission Viejo, Calif. The initiative is an attempt by Microsoft to connect directly with PC users and improve its image at a time when it’s trying to build interest in the new Windows 7 operating system and overcome the struggles of the earlier Windows Vista. While the stores aren’t expected to be immediate moneymakers, the company says the long-term goal is to generate profit, and brand awareness.
Microsoft’s biggest risk in following Apple’s lead would be if it can’t match the quality of the Apple experience, making it more obvious that it’s falling short, Gartner analyst Roster said. But that’s a lesser risk than trying to start fresh with a unique retail blueprint of its own.
For the record, Microsoft doesn’t think it deserves the copycat label. Mika Krammer, general manager of merchandising and marketing for Microsoft’s retail group, points to a range of unique “Microsoft experiences” in the stores — including eye-catching video displays that wrap around the interior, a dedicated video-game section, and the ability to customize the exterior and interior of the specially configured “Microsoft Signature PCs” sold there from a range of PC makers.
Microsoft has “chosen best practices from across the industry,” Krammer said. “There are best practices applied by companies like Apple, by companies that aren’t even in the consumer electronics area, and we’ve tried to draw from all of those.”
Jamarius Mackey, 7, plays The Beatles: Rock Band on the Xbox 360 at Microsoft's Arizona store on Oct. 22. (Microsoft photo)
Microsoft has hired some former Apple employees to work in and lead the stores, and it brought on as a consultant former Apple real estate chief George Blankenship, who helped lead the early rollout of the Mac maker’s stores. Microsoft also tapped tapped Wal-Mart veteran David Porter to lead the initiative as vice president of retail stores.
“I wouldn’t say so much that they’re trying to copy Apple’s style as much as Apple epitomizes what successful retailing is all about,” said Michael Gartenberg, vice president of strategy and analysis at research firm Interpret LLC. “For all intents and purposes, Apple has become the Nordstrom of the technology industry in terms of the retail experience, in terms of service, in terms of support.”
Original or not, Microsoft’s new stores give the company a rare opportunity to interact directly with consumers — something that has been tough in the past, given its traditional focus on software. Many PC users get Windows and other Microsoft software by purchasing computers made by other companies in stores where Microsoft has limited influence.
Apple, in contrast, has long had the advantage of making software and hardware. And in recent years, it also has had its own direct connection to users through its stores, which now number more than 270 around the world.
In a similar way, Microsoft’s move into retail is about the company “connecting with its customers, and creating a relationship with its customers,” Krammer said.
In addition to selling and showcasing Microsoft products, the stores offer technology help and service at the “Answers” desk, and a range of services to help people learn how to use their computers more effectively.
The stores put the company on the front lines in a way it hasn’t been before. At the same time, they aren’t meant to be mere showpieces.
“This is a long-term strategy for us, and our strategy is actually to generate revenues and contribute to the (profit) margins of Microsoft,” Krammer said. “It does have a great benefit of creating a halo effect for the company overall, because this is where we can connect with our consumers and complete that last mile in our consumer strategy. But by all means, our primary goal is to actually generate revenue and margins for Microsoft.”
The company is currently learning from its stores in Arizona and California, and it’s looking at other potential locations, although it’s not revealing much detail about its plans or its ultimate expectations for the size of the chain.
Asked if Microsoft might someday open one in its home region of Seattle, Krammer said it’s “not out of the question,” but she was less than definitive about the prospects. “We’ll have to wait and see.”
Todd Bishop is co-founder and managing editor of TechFlash. He has covered Microsoft and the technology industry for more than five years, most recently as a daily newspaper reporter and blogger based in Seattle.
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