Tag Archives | Retailing

Ballmer’s Right: Five Reasons Why Microsoft Should Open More Stores

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.

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The Decline and Fall of Physical Media Retailing: A Timeline

Some of you may find this difficult to believe, but there was once a time when this country was positively bulging at the seams with cavernous retail establishments that offered books, recorded music, home video, or some combination thereof. Okay, there are still some of them left. But with Monday’s news that bookselling behemoth Borders is filing for bankruptcy and shuttering at least 200 stores, it’s worth taking a look at what’s happened to the retailing of physical media in this country in recent years. It’s been a remarkably bleak time.

The music retailing business has almost completely collapsed; the nation’s biggest video-rental outfit is bankrupt and its largest competitor folded last year; Borders is threatened with extinction and its larger and more successful rival, Barnes & Noble, faces serious challenges. All this woe has befallen these industries at the same time that digital media–from music downloads to streaming movies–has boomed.

You can’t blame digital content alone for media retailing’s hard times. Storekeeping has always been a tricky business, especially during economic slumps. (I don’t think that MP3s or iTunes had anything to do with the demise of big chains such as Linens n’ Things. Long before Amazon and Netflix started distributing content digitally, they up-ended their respective industries by shipping physical goods through the mail–Amazon has better prices every day than Borders has when it’s having a going-out-of-business sale.) And several of the giant retailers that have crashed seem to have been the victim of their own boneheaded business decisions more than anything else. (Borders opened three locations within two miles of each other in San Francisco, all of which are now toast; the management of Hollywood Video mocked Netflix-style mail-order DVD distribution as a blip they didn’t need to concern themselves with.)

Anyhow, here’s a timeline of what’s happened to the nation’s largest physical-media merchants over the past eight years. It starts in February of 2003–a little over four years after Diamond Media released the Rio PMP300 MP3 player, a moment that I, at least, consider the real beginning of the digital revolution.

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Google to Shutter Its Phone Store. Good!

Well that was quick. Google, which got into the business of selling phones online a little over four months ago, is getting out of it. In an Official Google Blog post, Android honcho Andy Rubin explains that the company is pleased with Android’s overall progress-as it should be–but that the Web store has been a disappointment. It turns out that people like to see phones in person before they buy them, and that they want a bunch of service plans to choose from. (Shocking, huh?)

When Google announced its Web store, it called it “a new approach to buying a mobile phone.” It’s saying that it will revert to an old approach: selling them through brick-and-mortar retail stores. (It’s not entirely clear what sort of stores these will be, but in Europe you can already buy a Nexus One from wireless carrier Vodafone.)

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Where the History of Tech is For Sale

Yesterday I paid a long-overdue visit to one of the Bay Area’s most amazing geek destinations–the Weird Stuff Warehouse, which salvages the hardware and software that Silicon Valley has lost interest in. The place has been in business for a quarter century and throngs of shoppers were roaming the aisles during my expedition. And it was bursting at the seams with shrinkwrapped software for defunct platforms, obsolete gadgets, components and cables of every imaginable type, and much, much more.

View Silicon Valley’s Island of Misfit Tech slideshow.

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Silicon Valley’s Island of Misfit Tech

I’m ashamed to admit this, but I’ve lived in the Bay Area for almost eight years without paying a single visit to one of its most legendary temples, Sunnyvale’s Weird Stuff Warehouse. Today, I happened by it after a visit to its neighbor Yahoo, and stopped in. (I did pay one previous pilgrimage in 1995, as a tourist.)

This amazing, aptly-named store offers surplus and salvaged electronic equipment, but that doesn’t begin to describe it–it’s really a museum of technology where everything’s for sale, usually for only a few bucks. Shopping its aisles today, I felt like I was walking through the entire history of personal computing. And I documented the journey with fuzzy photos from my iPhone.


The Consumerist Investigates Best Buy

The Consumerist has conducted a superb, important investigation into a Best Buy “optimization” service that involves the Geek Squad pre-tweaking PCs on sale for alleged performance and usability benefits, for a  $40 surcharge. The investigation’s conclusion: The service can make it hard to buy a computer for the advertised price, and the benefits, if there are any, aren’t worth forty bucks.

It’s certainly true that many new Windows PCs aren’t as well configured as they could be–some, in fact, are so laden with demoware and other stuff that it’s downright annoying. Here’s an idea: Why doesn’t Best Buy, a tremendously powerful company in the industry, use the leverage it has to convince PC makers to do a better job in the first place, rather than trying to squeeze an extra $40 out of consumers?


Best Buy Does Digital Movies

Best Buy CinemaNowWhat happens to Best Buy when all of the content we rent and buy comes to us via the Internet rather than on shiny discs we buy in stores? The company won’t go the way of Tower Records or the Virgin Megastores, but it’ll surely miss the money it made selling CDs, DVDs, and Blu-Ray. And it’s clearly girding itself for the day when those racks of discs go away. Last year, it bought music subscription service Napster–and now it’s announcing a partnership with Sonic’s Roxio CinemaNow service to get into the digital movie business.

More details on Best Buy’s plans are yet to come, but Sonic told me that the retailing giant will create a Best Buy-branded version of CinemaNow, and will work with hardware manufacturers to build it into gadgets such as HDTVs and Blu-Ray players. A Best Buy representative told the New York Times’ Steve Lohr that the service will be available early next year, and that the goal is to let us pay for a movie once and then watch it on an array of devices: not just TVs and PCs but also media players and phones.

Sounds good to me. I’ve bought Walt Disney’s Pinocchio so often over the past twenty-four years, in so many slight variants, that I’ve lost track. I’d love to think that I could buy it just one more time and be done with it–if not for life then at least for a long, long time to come…


Microsoft Sells Crud-Free PCs

Microsoft StoreWhenever anybody asks me for my take on Windows 7, I share my largely positive reaction, but am careful to insert a note of necessary gloom: If PC manufacturers lard up Windows 7 machines with adware, demoware, and various other forms of unwantedware, they’re going to ruin a good thing.

Turns out Microsoft apparently has the same concern. Over at TechFlash, Todd Bishop is reporting that the company is not only selling PCs at its retail stores and online but has customized them to be free of junkware (and to include a bunch of Microsoft apps and services, including  the ones it removed from Windows 7.) Here, for instance, is an HP Pavilion that sells for the same price it does at HP’s own site (OK, for a penny more).

I’m not sure whether Microsoft hopes to sell vast quantities of PCs, but even if these “Signature” systems are nothing more than an experiment, I like the idea–and I’d like to think that they’ll shame the worst offenders among PC manufacturers into shipping machines that treat Windows 7 (and more important, customers) with a certain degree of dignity that’s often lacking in the PC world. (The lack of cruft on Macs is one of several reasons why all Macs make a better first impression than most Windows systems.)

Side note: I just bought an Asus thin-and-light notebook that’s running Windows 7. It’s certainly not crippled by crud, but I can’t understand why Asus dumps an icon for a little self-running sales demo of the PC on the desktop. Isn’t that a little like a realtor telling you it’s your responsibility to remove the FOR SALE sign from the house you just bought?