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Microsoft Retail Stores Would Fail

Editorial - Microsoft Retail Stores Would Fail

by , 4:25 PM EDT, April 11th, 2008

Rumors are floating around that Microsoft is considering retail stores, like Apple's, to showcase its products. The problem is, there's nothing to showcase, and while Apple understands the retail store paradigm and has products to back it up, Microsoft does not.

This week, BusinessWeek in addition to analysts from Gartner have pointed out that the level of customer pain with regard to Vista has been caused by Microsoft's inability to innovate with the monster code base of Windows. As a result, making dramatic changes to Vista are akin to rapid changes in direction of the U.S.S. Abraham Lincoln (CVN 72) aircraft carrier.

While business users are willing to endure the pain because they have an iT staff, and they've made a huge investment in Microsoft products, consumers have shown less willingness. For example, they'll grudging accept a new PC with Vista installed, but off the shelf sales of Vista upgrades are abysmal. That right there speaks volumes about the prospects for Microsoft retail stores. CompuUSA's Windows focus and subsequent bankruptcy add further insight.

Microsoft's estimation of the retail market appears to be influenced by Apple's success, and the thinking may be, "Hey, if Apple can do it, so can we."

The problem with that is that thinking is that it completely ignores the fundamentals of the retail business, what turns customers on, what drives them into stores, what makes them pull out their credit cards and what they expect from the retail buying experience. In order to do that, one first has to have products that are easy to support, easy to use, and for which customers lust. Apple's product design and philosophy naturally leads to retail; Microsoft's does not.

There just isn't any analog to Apple products on the Windows side. Customers love cool toys and hardware as evidenced by Apple's enormous Christmas holiday sales. As a result, if Microsoft is even thinking about retail stores like Apple's, they've demonstrated that they fundamentally don't understand the consumer experience and that their corporate strategy remains focused on wannabe greed and not a clear vision of what customers need.

If Microsoft were focused on those needs, they wouldn't be spending so much valuable upper management time and energy on acquiring Yahoo!.

Does Microsoft really want customers, feeling great pain, carrying their computers into those Microsoft retail stores and searching for a Windows genius? Imagine the lines.

For now, Microsoft still has a grip on corporate America which, while not happy with the situation in many cases, just doesn't have the technical expertise, will or money to abandon Microsoft. Tending to corporate America with a truly next generation OS, before the company crumbles under the weight of Windows might be boring, but it's the only chance Microsoft has for long term viability.

Microsoft retail stores would be like putting lipstick on a chicken.

Observer Comments

Show: Subjects Only | Full Comments
Close Name:Small White Car Posts: 1960 Joined: 02 Jul 2004
Subject: Best Buy?

The problem with an MS store is that I can get everything they would sell at Best Buy already. Why would I go to a dedicated store when I can pick up the same thing at BB while I'm buying a DVD movie and a flash-card for my still camera?

By contrast, there are a few Apple products at other stores, but no other place that stocks EVERY item in EVERY color with sales staff that understand them all. The Apple store offers that, and is thus different than any other store.

What can a Microsoft store do that would be different than Best Buy? I just don't know.

Close Name:Guest
Subject: Take away BestBuy's TVs

and refrigerators and 90% of the car audio and there you have it!

Close Name:bluevoter Posts: 13 Joined: 30 May 2007
Subject: Imagine a Microsoft Genius Bar

I can imagine what Microsoft could put in a retail store that you couldn't get at BestBuy: product support.

Yes, they could sell Zunes with unique designs, offer an onsite download store, sell Xboxes along with games and addons for them, as well as their mice, keyboards, and proprietary software (Office, Project, etc.). They can also sell other manufacturers' phones with Windows Mobile, and a variety of notebook and desktop machines running their favorite operating system (not to say the "V" word).

Agreed, all of this is, at best, only marginally different from what one can get at BestBuy. However, with Gateway and CompUSA stores gone, and Circuit City likely to follow, there will be very few retail outlets for Windows machines, and even fewer with knowledgeable sales staff. So I can definitely see why the Microsofties are thinking in terms of their own chain of stores, perhaps even "drawing upon" the excellent work of Apple's site selection team to find locations.

Even though I don't make much use of their products, I can imagine that they could create a viable, though not wildly profitable, business. What would make a huge difference, though, is if they had competent product support, along with product demos and training, in the stores, again following the model of Apple's stores.

If you work for a large company and you have a problem, then your IT staff is there to fix your machine and get you up and going again, but if you are a small business, an independent professional, or a family that made the decision to rely on Microsoft, then you are pretty much SOL unless you have technical skills or are willing to pay money to talk to support people located in remote parts of the planet. If I had a BSOD, a driver problem, or a spyware/virus problem with a Windows machine, I would welcome the opportunity to talk in person to Microsoft support personnel at a Microsoft Genius Bar.

One huge issue is that the demand would be massive, given the problems that people have with Microsoft software, leading to lengthy delays for service. You might not trust them, either, since they are likely to look much more "corporate" than the guys behind the counter at my local Apple Genius Bar, where piercings, tattoos, and black clothing are the norm.

Close Name:ipaqrat Posts: 44 Joined: 14 Jan 2005
Subject: Looters Bypass Microsoft Retail Outlets

Dateline: Sometown, USA

"In the wake of a Huge Natural Disaster, It has become official. Looters apparently bypassed Microsoft Outlets. Rioters stareamed right past Microsoft stores' plate glass Windows, gathering near the "Fiery Fox" a nearby lingerie chain store. Questioned in front of Microsoft store #34,763, a member of the Pawket Protektors gang, who identified himself as "ReFill" said, "What? I ain't wastin' a brick on Microsoft. 'Sides, I don' want that $hit out here where I am..." Flashing the P|P gang sign, he dashed away, brick in one hand, ubiquitous white earbud cord tucked inside his shirt collar. Congratulations to Microsoft on their low looting losses.

Close Name:Guest
Subject: Problem is ...

... providing tech support is not a profit-generating enterprise. Pissed-off people lugging smoldering XBoxes or Vista-equipped laptops that refuse to wake from sleep (or hibernation, or whatever the frack they call it) aren't going to stay and browse the Zune accessories. Microsoft stores would quickly garner a reputation as repair depots, and the casual shoppers would stay away.

It's not as though Microsoft doesn't make any desirable products; they're not nearly as screwed as Dell was when they tried to open stores. Gamers generally like XBox; the Zune might actually benefit from being sold in an environment where the prime traffic space wasn't devoted to iPods. But it still isn’t enough. For one thing, as Jobs so accurately noted, Microsoft has no taste, and their stores would either look embarrassingly "Matrix-y" or like an office cubicle farm with cash registers. More importantly, even the best Microsoft stuff simply isn’t covetable: no one will go out of their way to fondle a new mouse or test-drive the new Vista service pack.

Close Name:xmattingly Posts: 266 Joined: 31 Jul 2007
Subject: I'd say, more like "lipstick on a pig"

Another point of contrast you might consider is that Apple seems to be viewed as a boutique consumer electronics business... their retail operations have a boutique look-and-feel to them. Having some great looking PHYSICAL products for customers to try out is a huge draw. So what will M$ customers come to see - software boxes?? That's not sexy.

You're right on about their "genius bar" line. If they go forward w/ this, they'd better be prepared to staff up that part of the operation quite a bit.

PS. I don't know what's up with the recent surge in articles (coming from this particular writer), but it's a welcome change. John Martellaro kicks butt.

Close Name:Guest
Subject: Fail Once..

Remember Microsoft:SF at Metreon in San Francisco? Yeah.

Close Name:artman1033 Posts: 1261 Joined: 28 Oct 2007
Subject: I found the stores!

I found the stores. See http://www.portraitsofmom.com/
There is to be one in NYC and one in San Fran.
Looks like a short term promotion!

Close Name:Guest
Subject:

There it is! If this is true, or even just a trial balloon that Ballmer is raising, there's your incontrovertible proof that Microsoft management has no hint of a clue where they're taking the company. I unloaded ALL my MSFT holdings this January and so far everything I've seen has just made me feel better about that call.

Ballmer is a hack whose only qualification for his current job is that he was Bill Gates' college buddy.

Close Name:LunarMoon Posts: 4 Joined: 20 Nov 2007
Subject: breaking news from M$

You guys must read what I have heard from a friend with close contacts in the industry. It is really breaking news about the new project M$ is developing to be launched in 10 years (at least) called Windows 7.

Windows 7 will be built in seven modules. Each module will be a deadly sin and Ballmer will be stepping down as CEO and will be assigned as the head of Envy and Greed Divisions. His job will be pretty much the same as today, i.e., to envy other companies' products and launch the same products as revolutionary.

Close Name:Guest
Subject: A Vista Box

I see and what will this store contain? Perhaps a gigantic "Vista" box with with egg and tomato stains running down the sides?

Microsoft may have completely lost it.

Close Name:mhikl Posts: 15 Joined: 20 Aug 2003
Subject: Drinks optional

"Microsoft's estimation of the retail market appears to be influenced by Apple's success, and the thinking may be, "Hey, if Apple can do it, so can we."

Great idea. But MS should go one better than the Apple Store. Since Microsoft is in the copy business possibly an Apple-Hooters combo would be an incarnation that might at least take the edge off the long lines ups at the genius bar.

Cheers,
mhikl

Close Name:Intruder -   TMO Mac Specialist Posts: 3149 Joined: 07 Jul 2004
Subject:

What would they run there demonstrations on?

I would think it would have to be generic hardware. Picking a vendor (Dell, Sony, whomever) would imply that they are endorsing one vendor over another. That would probably cause a few problems with OEMs.

Close Name:Guest
Subject:

I really hope they try it... it would be another nail in the coffin of the convicted monopolist. Another thing to bleed them and set them stumbling to help lead to their fall. Greed and envy indeed!

Just as a fine point; "The problem with that is that thinking is that it completely..." is confusing and could have been much more simply and elegantly stated. "The problem with that thinking is that..." or "The problem with thinking that..." are both much better alternatives. While I know this is a nit-pick, and there are deadlines that need to be met, this is a glaring oversight.

Otherwise, I agree; John's articles and analyses typically are quite good, and this one is spot on.

Close Name:Photodan -   TMO Staff Posts: 3112 Joined: 11 Jun 2001
Subject:

As someone who has witnessed Apple's journey from the dark days, I find this quite entertaining.

This is a prime example of turning your weakness into a strength and your rival's strength into a weakness. The big knock on Apple always used to be that you couldn't buy any of its products or accessories in most stores. When they were available, instead of being presented in the most coveted floor space, they were relegated to some back corner and were never working correctly.

Now we have the iPods in the best spaces and Microsoft is suffering because their goods are available in "most stores."

Talk about reversal of fortunes.

-Dan

Close Name:daemon Posts: 344 Joined: 17 May 2007
Subject:

I sure hope Microsoft doesn't start up a retail chain.

Close Name:Guest
Subject: MS Hardware?

Hmm... Maybe they are also thinking of coming out with their own line of computers.

Close Name:DaiMac Posts: 952 Joined: 29 Jun 2001
Subject: I _almost_ hope they do it.

The thing is, the only hardware of note MS deals in right at the moment is the Zune, the 360, and their peripherals/joysticks. They really can't launch their own PCs right now, because they would have to either premium price them to compete direct with apple (and throw in a similar number of features, trimming the profit potential since you assume a nice version of windows thrown in that normally they make more off of), or price them competitively and its another step towards trimming the difference between their $400 game system (not the full retail cost of its cheapest variant, but thats the minimum to make it playable for all titles) and their cheap but relatively more powerful PC.

Having experienced the joy of 4 failed Xbox 360s personally, bringing the total just among my personal friends to 17 (my 4, my friend Noltron's on his 6th, hasn't even sent the 5th one back yet, 3 for my cousin and 2 other friends are on their third machine.), I'll probably pass on any MS hardware in the future. They're damn shrewd though, when they do things like pay whatever ungodly amount to Tecmo for Ninja Gaiden 2, or Rockstar for GTA content, etc etc...its hard not to say they don't work their ass off smooching devs on the software side of things, at least.

But please open one near me if you do it MS, I want to experience it and compare. I'm not sold on Apple Retail-they're not geared towards me, and I've come to accept that, though I miss the old school shops and better service-so here is your one shot, probably for the next 5-10 years, to win me over. I promise to keep an open mind, and leave my iPod in the car

Close Name:hardmanb Posts: 4 Joined: 08 Feb 2008
Subject: MS Retail Stores

"Does Microsoft really want customers, feeling great pain, carrying their computers into those Microsoft retail stores and searching for a Windows genius? Imagine the lines."

Indeed, but it will never happen.

Microsoft doesn't offer free help service advice people...at least to the public.

Close Name:Guest
Subject: Microsoft would make people pay for Service

Probably make people pay just for an appointment for service, and if you don't show to bad you lose your money. The whole store would have to be one GIANT support center because nobody would want to buy anything from them. They would just need to know how to get rid of spyware, viruses, and Windows VIsta off there PC's. They have nothing to differentiate from what's already out there in all the other PC stores. This sounds like another EGO trip from Steve Balmer. I hope they do go ahead with it and FAIL MISERABLY!

Close Name:davebarnes Posts: 130 Joined: 12 Jan 2005
Subject:

I think Microsoft retail stores would be great.
They could showcase such products as: http://www.microsoft.com/dynamics/default.mspx

Close Name:Guest
Subject: They already tried it once

http://www.microsoft.com/presspass/press/1999/jun99/microsoftsfpr.mspx

The store opened in 1999 and closed in 2001.

Close Name:Guest
Subject: Re: Circuit City's death

It may be premature -- Blockbuster Video is considering buying them out.

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