Microsoft Execs Want More Stores than Apple

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Microsoft CEO Steve Ballmer and COO Kevin Turner want to ramp up their battle against Apple in the retail space and open even more stores than the Mac, iPhone and iPad maker. Currently, customers can visit 300 Apple stores compared to Microsoft’s eight.

Microsoft staff shaking their groove thang.Microsoft Store staff getting jiggy with it

Mr. Ballmer is already working on closing that gap — sort of. The Redmond-based company has two more stores planned right now, one in Seattle and the other in Atlanta, according to Business Insider.

Despite the efforts of Mr. Ballmer and Mr. Turner, Microsoft won’t likely increase the rate of store openings any time soon because those retail locations are expensive to build and operate. In fact, Microsoft’s retail stores are so expensive that most apparently don’t turn a profit.

Unlike Apple Stores that are seen by consumers as the first place to go for Macs, iPhones and iPods, Microsoft’s stores are just another in a long list of retailers offering Windows PCs from a variety of manufacturers. Microsoft’s store designs mimic Apple’s, but it seems that isn’t enough to draw in enough customers to make money.

While Microsoft is playing conservative with its retail expansion — much to the chagrin of Mr. Ballmer and Mr. Turner — Apple is continuing to open new stores around the world. Apple even has job listings for a second Utah store set to open in Fashion Place Mall.

For now, shoppers looking to visit a Microsoft Store will have to travel to Arizona, California, Colorado, Georgia, Illinois, Minnesota, or Washington.

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Comments

John Molloy

Google Execs? Really? C’mon Jeff… I know the competition is picking up but who are the bad guys?

Beeblebrox

Shouldn’t MS’s motivation be to, oh, make money, promote the brand, provide choice to the consumer, etc. etc.?  With 8 stores, having a motivation of “more stores than Apple” seems pretty infantile.  If they didn’t have bundles of cash, that business plan would never be approved.

Jeff Gamet

I guess that says something about these companies when I think “Microsoft,” but my fingers type “Google.” Sorry about that, gang.

John Molloy

I thought as much… I really don’t get what the Microsoft stores are except appealing to Ballmer’s vanity. Microsoft don’t manufacture the hardware to make this stuff actually profitable.

vpndev

The good thing about more stores is that they have guru bars where you can go to have your PC exorcised. Or send your PC-owning friends when they ask you for help

mhikl

Microsoft Execs Want More Stores than Apple 

And I?d like a wife who does my bidding ?all the time? and a kid whose teething doesn?t wake me up at nights and a dog who doesn?t mess the neighbour?s lawn and a . . .  oh well.

I guess that says something about these companies when I think ?Microsoft,? but my fingers type ?Google.? Sorry about that, gang.

We know you’re a funny guy, Jeff. Cracked me up. Was sure you meant “GooGoo”.

Here?s a better idea for M$. Dollar stores are dying so why doesn?t M$ rent space from them. Be cheaper for M$ and would give Dollarama and the rest a few bucks to pay the light bill. And there?s a dollar store on every corner across the land. An Apple Killer of an idea, eh?

And it could have a worker standing outside Apples Stores handing out nifty maps to each of its eight stores.

Copying Apple down to the clothes on their backs just ain?t going to make it. Why not have M$ store employees wear clown suits and do Ballmer like skits to draw in the crowds. I?d go for a laugh. It worked for Vaudville.

mrmwebmax

+

So they want to take their 8 stores that can’t turn a profit, then multiply their total retail presence by (300-8)/8 = 36.5 times the non-profitability? Just to say they have the same number, or a greater number, of retail stores than Apple? And this makes business sense…how?

“Insanity: doing the same thing over and over again and expecting different results.”
—Albert Einstein

Peter

So they want to take their 8 stores that can?t turn a profit, then multiply their total retail presence [...]

Duh!  They lose money on every sale, but they make it up on volume!

(Sorry.  Couldn’t resist.)

Seriously, though, remember back when Apple was opening their stores?  The rationale was that Apple needed to do this in order to get their message out to consumers—something that wasn’t going to happen in the SPIF-based world of big box retail.  The theory was that the stores just needed to break even.  Their presence would (a)let people see that Apple was still in business and (b) let people try out their computers.

Microsoft’s position is somewhat similar.  While I know most of you don’t care, how many people here have actually used a Windows Phone 7 or a Zune?  How many of you have actually tried a decent PC running Windows 7?  Personally, I have never used a Windows Phone 7—I saw one with a fake sticker on the screen once.  I’ve never even seen a Zune.  And I’ve only seen Windows 7 running in a VirtualBox session on an Xserve.

But if I wanted to check them out, would I go to Best Buy or AT&T or would I go to the Microsoft store?  I’m pretty sure that I’d get a better idea of the capabilities in the Microsoft store than I would in Best Buy or AT&T.  Again, much like the Apple Stores, the Microsoft store lets me go check these things out.

But when it comes to money, there’s also an indirect question:  How many people checked out PCs running Windows 7 at a Microsoft store but then bought one at Best Buy?  That’s still a sale for Microsoft.  How many people checked out Windows Phone 7 at a Microsoft store and then went and bought the phone at their convenient AT&T store?

Remember that Microsoft, for the most part, doesn’t sell to me and you.  They sell to Dell, HP, LG, Samsung, etc.  Which means if you go into the store and check out the cool new LG Whazzit running Windows Phone 7 but then you buy it from the AT&T store, Microsoft still made money from the sale of Windows Phone 7 to LG plus whatever money LG might have paid Microsoft for placement in the Microsoft store.

So the question isn’t whether the individual store makes money, but how good are sales of Microsoft products in the area where the store exists.

vpndev

Seriously though, the MS stores will have to do “well enough” financially to justify their continued existence to shareholders. “Well enough” may be loosely-defined but it doesn’t include “loss leader”.

MS might regard some of the expense as advertising-and-promotion but I think that the stores themselves would have to at least break even. If they help BestBuy and AT&T then that is A&P but it would take a whole lot of sell-thru to fund a store that doesn’t pull its own weight in sales.

I agree that an MS store would be a better showcase. That was Apple’s issue and, fortunately for Apple, no-one much wanted to sell Apple stuff back then. So, for the most part, Apple could set up retail without impacting channel sales. But MS can’t do that and I don’t know how that problem can be resolved.

estern53

Actually MS needs to take a play out of Apples play book when it comes to stores. When Apple opens a store it means the death knell for any mom and pop shop nearby. Apple, like Walmart become the black whole for any customers that would shop mom and pop shops. if you don’t go out of business Apple will make you go out of business by changing the rules in the middle of the game. i know because i was one of those places. they have have closed the ASP site for any new service providers. they are quietly closing down small shop all across the country. So much for the a company that said’ think different’, not their new slogan is ‘lets be kind to our share holders’.
they want everyone to go to their stores where you have no choice and they can deny you warranty service for the smallest scratch on your product.

AdamC

@Peter

But who is paying for the costs of up keeping the MS stores certainly not best Buy etc.

I know MS have money to burn but this is not the way to do it especially when they are paying for the up keep but none of the sales.

vpndev

BestBuy is certainly not paying MS for the stores. What I was trying to say is that MS sets aside money for advertising and promotion and some of that traditionally has gone to BestBuy and others. If MS opens a store then that money, for that area, might go to the store rather than BestBuy. I have no idea whether this happens now (maybe not with so few stores) but it would be a way for MS to get the stores going even if they’re not self-funding.

Personally, I think the whole idea is just bad.

Intruder

@estern53
My experience has been quite the opposite regarding Apple and warranty work. They’ve replaced batteries when they didn’t have to. They’ve swapped out iPods that were out of warranty. They’ve actually been quite good about warranty work.

Sorry that happened to you, but I haven’t seen lesser treatment from Apple compared to M&P shops.

wab95

When Apple opens a store it means the death knell for any mom and pop shop nearby.

Truly regrettable, estern53. While I cannot speak from the side of having a ‘mom&pop;’ shop, my observation has been that the local Apple retail stores I have used is that they make referrals to supportive services in the area, which have benefitted from my patronage. I also note in the local mall near my US home, everyone wants the spot near the Apple Store so as to get collateral business.

However, none of that is any consolation to anyone who has lost a business.

how many people here have actually used a Windows Phone 7 or a Zune?? How many of you have actually tried a decent PC running Windows 7?

I have, at least the PC running Win7. My wife gets a Dell laptop w/Win7 installed from work, which I have to assist with, when she brings it home. Not bad. Not exciting, but not bad. I have played with a Win7 phone in the AT&T store. Again, not bad. This is why I think that MS and Nokia have a fighting chance in the smart phone wars. Both enjoy a substantial loyal base (perhaps not the majority of users, but volume more than makes up for that for both companies).

Truth is, were I in the market for a Windows-driven device (PC or phone) I would probably not go to a Windows store. I did not back in the early 90’s when I used Windows machines. I think those stores have greater appeal to a generation of users who have followed Apple’s success and want a Windows equivalent. I do not believe that describes the majority of the Windows demographic, many (if not most) of whom, like my wife, are getting their Windows devices from the workplace, and some of whom, like her, are Mac users in their private lives.

For these stores to work, MS have to generate genuine enthusiasm for their products and services, something they appear to be trying, but their movements to date can best be described, clinically, as spastic. This is not something amenable to the quick-fix approach they appear to be taking.

I maintain that they are imitating the form only, without understanding the spirit or strategy that animates that form.

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