By Ed Oswald | Thursday, April 7, 2011 at 1:49 pm
As Harry noted earlier, the Business Insider’s Matt Rosoff has the news of an internal debate with Microsoft on the future of its retail stores. The gist is this: CEO Steve Ballmer and COO Kevin Turner are itching to push full steam ahead and take on Apple by vastly expanding Microsoft’s retail network. However others in the company have convinced them to hold back, citing the expense.
Thus, we’re left with a small network of nine stores (with another on the way), all but three of which are on the west coast. There’s a good chance a majority of consumers don’t even know Microsoft even has a retail strategy.
Microsoft is in somewhat of a quandary though when it comes to retail. Unlike Apple, the products sold in the Redmond company stores are readily available through many other stores. This gives consumers little reason to purchase something from the Microsoft Store above any other.
That shouldn’t hold the company back, though. Yes, these retail locations are expensive to build — Apple’s were too — but those retail stores are probably the single biggest driver to Apple’s overall success. Here’s why.
1.) The store is a showroom. Nowhere else can people experience the products Apple has to offer like an Apple Store. Add this to the fact that there are salespeople on the floor directly knowledgable about the products there, and it adds up to a net positive even if the product isn’t sold that day. Microsoft could benefit from this exposure: the company wants to get its products out in front of consumers, so why not ensure the best experience by doing it in a controlled environment such as this?
2.) You can’t beat personalized customer service. Apple skeptics love to talk about the Apple Tax. Up until the Apple Stores opened, I would have agreed. I look at it differently now though, and that’s because of the customer service you get when you walk through the door. Have a question on how to do something on your Mac? Sign up for a free class. Computer on the fritz? The Genius Bar can probably help. There’s a bit of solace in the fact the company you buy from will be there after the sale.
Why can’t Microsoft do something similar? Yes it may hurt the mom-and-pop repair shops as well as those “learn-Excel-in-a-weekend” establishments, but again no one can provide better service than the company that builds the product. That’s why every Microsoft Store has an “Answer Desk.” This is one retail idea that Microsoft was very smart to copy Apple on.
3.) A store network will make the retail idea more relevant. Right now the Microsoft Store is a niche idea. There isn’t enough reason to go to these locations over somewhere else, like Best Buy. With a network of stores this could change. Redmond could launch exclusives, say the newest Final Fantasy Xbox title, at its stores first. This gives the consumer a reason to come — and buy — from Microsoft.
4.) It’s all about image control. Microsoft’s always suffered from an image problem,. It’s seen as a big bad company, always a step behind, or responsible for that latest security flaw. With a network of stores, the company would have a direct connection to its consumers and would be able to use this to convey the public image it wants, rather than one driven by the headlines.
It could be argued that the single biggest reason why Windows Phone 7 hasn’t caught fire is due to Microsoft’s reputation, notwithstanding the fact that WP7 is actually a fairly good mobile OS.
5.) It’s the economy, stupid. This may seem irrelevant to the subject but it’s not. Having experience in municipal government, and being in the midst of a revitalization project in my municipality, I can tell you the time to build is now. Contractors and property owners are hungry for business, and great deals are to be had out there. If Microsoft is going to make a move, now is the time. While it’s still going to be expensive, it’ll be much cheaper than it will be in a few years.
Microsoft could miss a golden opportunity to solidify its retail strategy by waiting too long. The rest of the company should listen to Mr. Ballmer. He’s right.
What say you? Let us know in the comments, and we may use your thoughts in a future followup to this story.
(Note: Here’s an opposing viewpoint in the form of “Save Your Money, Steve: Five Reasons Why We Don’t Need More Microsoft Stores.”)