Microsoft plan to ape Apple Stores just plain bananas
It’s enough to make you rub your eyes, blink and squint to make sure you’re not hallucinating.
But it’s true. Microsoft plans to open its own chain of retail stores. On Thursday the Redmond company announced it had hired former Wal-Mart executive David Porter to make it happen.
Microsoft seems to think it can duplicate Apple’s retail success, using a chain of stores to improve the “Microsoft retail purchase experience” and to combat the stereotypes – artfully reinforced by Apple’s “I’m a Mac” TV ads – that owning a Windows PC is fraught with difficulties.
I hardly know where to begin, so let’s start with the first thing many people will think when they hear of a Microsoft Store: “Oh, just like Apple.”
Contrary to the goal of improving public perceptions, the announcement of a Microsoft-branded chain of stores screams “copycat” – historically one of the worst knocks against it. Not the best way to start rehabilitating your image, guys.
Next: how will the stores pay for themselves? Big profits would not be necessary, but the last thing Microsoft needs is another money-losing division.
Apple’s retail chain does exceptionally well – in fact its $4,700 of revenue per square foot is the highest of any retail chain in the nation – but that’s because Apple’s products have high profit margins, particularly its hardware.
Microsoft’s hardware? Well, it makes the Zune MP3 player. According to the company’s December earnings report, Zune revenue fell $100 million, or 54 percent. Uh-oh.
The Xbox 360 finally is showing a profit, but that’s mostly from the games, not the console.
And let’s not forget all those fine keyboards and mice. But will that be enough to keep the lights on?
A thornier issue comes with the decision over whether to sell PCs built by such Microsoft “partners” as Dell, Hewlett-Packard and Acer. Microsoft needs some PCs in the store to show off the wonderful world of Windows. But will they be for sale?
People certainly will expect it. Can you imagine the reaction of a customer if told, “No, sorry, these PCs are for demo purposes only. You can’t buy them here.”
But if the Microsoft Store sells PCs, which manufacturer(s) gets the nod? Who gets the best display? Who can guess the reaction of a PC maker that believes Microsoft is favoring a competitor’s wares?
And what of netbooks -- those smallish, cheap, underpowered PC laptops that generally run Windows XP, not Vista? Microsoft wouldn’t want any of those in the house.
Apple, as the sole legitimate maker of Macs, need not worry about displeasing any hardware “partners” or managing the difficulties of selling cheap PC boxes with hair-thin profit margins.
Which brings us to software. Of course, Windows and Office make tons of money for Microsoft -- but the bulk of those sales are to businesses, not consumers. Besides, most people get Windows with their PC and never bother buying a retail boxed version of Windows.
At best, the Microsoft stores would lose money for years before turning a profit. At best.
Assuming Microsoft doesn’t care about that – it’s stuck by plenty of other losing ventures for long periods – does its goal of improving the shopping experience for Windows users make sense?
Let’s go back to the Apple model again for a minute. The Apple of 2001 launched its retail chain for several reasons the Microsoft of 2009 does not share.
First, Apple believed its products were lost among Windows-oriented offerings in stores at the time. Heck, few retailers even carried Macs. Apple needed a place where people could see and touch its products.
Second, Apple wanted to reach out to disgruntled Windows users. Apple Store staff not only can answer questions and concerns about switching to a Mac from a PC, they can help you do it. Apple often cites statistics indicating that half of the customers at its stores are “new to the platform” – former Windows users.
Third, Apple wanted to show how the Mac was better suited than a Windows PC to serve as a “digital hub,” thanks to the integrated iLife apps such as iPhoto and iMovie included on every Mac.
None of which applies to Microsoft.
Microsoft products are everywhere. The company has tremendous visibility. And there are few disaffected Mac users wondering if it makes sense to switch to Windows. Most Mac users have used Windows and actively dislike it.
As for the digital hub, Windows can do it adequately. But the PC experience doesn’t equal Apple’s well-tuned integration of hardware, apps and operating system.
I’m not sure how much a chain of Microsoft Stores can budge the needle in regard to helping sell more Microsoft products. If it’s a defensive move against rivals like Apple and Google, then the money could be better spent elsewhere – such on genuine innovation.
Maybe Microsoft can make a retail strategy work, but it faces nasty odds. And launching such a venture amid one of the worst economic downturns in decades seems particularly ill advised.
Though Microsoft may dream of an Apple Store-style success, in all probability this retail experiment will end like Gateway’s – drowned in a sea of red ink.
Comments
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Posted by: MARRAUNG. SILALAHI | February 14, 2009 4:53 AM
What strikes me immediately is the hiring of a Wal-Mart exec to run the show. That is not the way to promote a good experience in the stores. Wal-Mart shopping is painful.
Posted by: Kyle | February 14, 2009 7:08 AM
You're so right! The first thing I thought when I heard this was the same thing I thought when I saw those MS ads: Poor Microsoft! Trying so hard, but not succeeding! Yes, why doesn't it just spend the money improving that terrible OS, both desktop and mobile, and even the office suite?
Posted by: Maya | February 14, 2009 8:21 AM
Another thought (bizarre) would be that Microsoft wants to take the place of CompUSA since they only have 17 stores in a few very limited areas.
Posted by: MDP | February 14, 2009 10:00 AM
People go to Apple Stores because its a gathering place. It's like going to church to worship Apple, even if you don't buy things, if you are an Apple fan.. It is like a mini-expo every day of the week. It's nice to touch things and try things at the Apple store even if you already have them at home. You can even do some email and work at the Apple store. If it is in a mall, you can price-shop at the Apple store - using Pricegrabber to see how much the item will cost versus what the retailer at the mall will sell it for. You can meet your friends at the Apple Store - in a way it's like a bookstore or a Starbucks. Like many Apple fans, in whatever city I travel to, the Apple Store is a destination. Apple should have T-shirts for all of its stores as collector's items. The Apple Store is very inviting for all people, women and men, girls and boys, of all ages. It has a family and friendly atmosphere.
Microsoft?
Outside of acne-faced teenage boy gamers, nerds, dorks, and dweebs, who would want to go to a Microsoft store?
Exactly.
No one.
Posted by: james katt | February 14, 2009 10:36 AM
Porter and MS are used to selling big contracts to corporate IT staff who want cheap and secure products. Now they want to start to target citizen-consumers. They make small purchases, usually based on ease of use and aesthetics. How to sell to them requires a change in focus on what is compelling about the products, and the MS stores will need to refocus on displaying them in a compelling way.
Can anyone think of any way to make MS products sexy? Can anyone think of any besides perhaps the XBox, MS Mouse, games, and the MS Keyboard? I doubt that it's in MS's genes to showcase products effectively, and then to make a visual/aesthetic/technological case to citizen/consumers to purchase them.
Porter’s experience is mostly at Wal-Mart, and what we see in the cavernous stores is the inclusion, except for gems like the iPod/iPhone, of most of everything available that is inexpensive and low end. Well, that's all well and good for jeans and tires.
But software and hardware that is comparable to jeans and tires will likely not cut it with consumes who want an elevated experience such as is provided in Apple Stores. Within these architectural monuments, visitors expect to lose themselves in a weird but positive world that effectively combines aesthetics, retail spirituality, hope, and salvatory and redemptive solutions for those who have been technologically afflicted from using unsatisfactorily implemented PC products and services.
So the question is why? I can only guess that it's because MS's visionless, bull-charging genes compel it to enter into as many businesses as it can possibly insinuate itself. In my estimation, Mr. Porter will likely create an experience that could very well be better than WalMart but not as rewarding as an Apple Store which, according to what he is quoted as saying, he is already attempting to emulate. MS employees have shown to not be good at this.
And because the special outlets will require one to travel to new Microsoft locations for less than compelling reasons, the effort needed is something that most PC consumers might rather skip in favor of what is already available in the local Wal-Mart and Radio Shack.
Posted by: John Dingler | February 14, 2009 11:29 AM
What makes Apple special is the OS. What makes Apple STORES special is the hardware. I agree with the author on this. One advantage of working in an MS store though will be lots of time to do your school homework.
Posted by: scooter | February 14, 2009 11:37 AM
Seinfeld will be the greeter.
Posted by: Neil Anderson | February 14, 2009 12:32 PM
Micro$oft is trying to use its ill-gotten billions to support President Obama's vision of creating 4 million jobs!!!
Posted by: Viswakarma | February 14, 2009 1:17 PM
What is up with MS? Can they do nothing but copy everyone else? The truly sad part is they don't emulate very well.
Posted by: Steph | February 14, 2009 1:46 PM
This stupid foray by Microsoft into the retail chain model "a la Apple" will just end up like that thoughtless Jerry Seinfeld-Bill Gates ad fiasco. Poor Microsoft! Steve Ballmer should pay for this waste someday, if not now. Dumb!
Posted by: poggi11 | February 14, 2009 7:15 PM
Microsoft Store?
Fabulous!
I disagree completely with the comments above.
I have utmost confidence it will be a resounding success!
Why....why....I can just envision the thrill of the experience going to one:
-- They can sell Bill Gates fashion eyeglasses for people who want to look just like a thieving Monopolist who throws his stolen money at charities in an effort to look like a humanitarian
-- They can have a Microsoft branded barber, to give customers Baldy-Steve-Ballmer haircuts for customers who starve to emulate the beautiful look of the crook who runs the joint nowadays
-- They can have a chair-tossing corner with a Olympic medal winning chair tossing coach, offering free tips on how to throw chairs at people just like CEO Ballmer
-- They can teach kids how to plagiarize and steal other people work, just like Bill Gates did over 3 decades to "earn" his fortune
-- They can have "Drop Outs" discounts and special Microsoft "Drop Out Day" Sales and discount coupons, to help customers feel kinship with the glorious founder of Microsoft (Bill Gates)
-- They can hand out commissions and other gifts & payola...I mean "incentives" to customers willing to "help out the cause", by running over to the Apple store and shop-lifting items from there, which can subsequently be brought back to the Microsoft store, where a bald bespectacled Microsoft Store employee can place a cheap "Made by/Invented by/Designed by/Manufactured by" Microsoft label on top of the Apple logo thus rendering the rip-off (oh excuse me) I mean the freshly manufactured item an official/legal/legitimate Microsoft product, ready for sale
-- They can have special modified metal detectors to detect when a Google user is about to enter the premises (Google users need a good laugh every now and then, especially on a boring rainy night, so why not go shopping at Gates & Company, Ltd, LLP, Inc, amalgamated-PhD's-geniuses-polymaths...the more titles the better with these folks), which can trigger blaring alarms warning all within that a Google-using scoundrel is attempting to breach the sacred confines of the store....(oh, I mean their geniuses' boutique)
etc...etc...etc
I see such grand potential for Microsoft stores...Wal-Mart, Best Buy, Target, oh and yes, Apple ------ ****B-E-W-A-R-E****
Posted by: Walmo-soft Ltd. | February 14, 2009 9:48 PM
The Sydney Microsoft store already launched...it was a total disaster according to all reports...
Check this out, Cate Blanchett didn't really like her experience at the Sydney Microsoft store:
http://www.sarcastic.com.au/microsoft-store-launch
Posted by: Ron | February 14, 2009 11:24 PM
It looks like Microsoft is taking care to place its neck in just the right position on the block under the guillotine and even going to the extreme of showing the operator which string to pull to send the blade on its way down.
This company has a death wish. I don't want to watch!
Posted by: John Davis | February 14, 2009 11:34 PM
There seems to be a whole lot of Apple envy at Microsoft. It is pretty funny to think that Apple is running the IT show right now when MS has 80+% market share but it is true. Apple makes better products all around. I am a switcher to the Macintosh platform and Apple would have to really screw up to ever make me purchase a Windows based PC again. Microsofts dominance is over. The age of Great products from Apple has begun and quite frankly it is a better experience than a Dell of HP hardware running a microsoft operating system. Hands down a better value. Go Apple
Posted by: Brad | February 15, 2009 2:14 AM
You all seem pretty narrow minded. You think your being anti-establishment by bashing MS when in reality Apple is as bad as anyone at trying to monopolize. All companies are in business to make money. As for "copying" I see some truth in that but I also think Gateway had stores long before Apple did. Does that mean Apple is just a bunch of hacks. I'm not a MS fanboy but I get so sick of the Apple fanboys/girls that think one way is the only way. Quite honestly I hope they include some new lines of hardware, heck a few PCs too. Anything that drives competition is good. But with any luck pretty soon we will all have cute white $2,000 laptops and complain about monopolies while drinking our coffee at Starbucks. Get over yourselves. Enjoy your $600 phones... elitists :)
Posted by: Anything but Apple | February 15, 2009 3:57 AM
I'd like to see both stores open in a mall next to each other and see who pulls in more customers and generates the most revenue. I wonder if Microsoft can afford to hire lots of employees to stand around doing almost nothing. It's going to be tough breaking into the retail market in this economy. They probably won't have much innovative technology to pull buyers in except for that Surface device which looks interesting. Buying keyboards and mice won't be very interesting.
Posted by: Constable Odo | February 15, 2009 7:00 AM
I hardly know where to begin, so let’s start with the first thing many people will think when they hear of a Microsoft Store: “Oh, just like Apple.”
So Apple invested stores now, did it? I am so glad this kind of information appears on the internet, it teaches you new things every day. I thought that the concept of putting physical stuff in physical locations to sell it had been around since long before Apple, but apparently not, Apple got there before any of the other stores you see ont he street.
Posted by: Apple invented everything | February 15, 2009 9:30 PM
"the money could be better spent elsewhere – such on genuine innovation"
Could be...if Microsoft had any clue what the word "innovation" meant.
They don't. And they never will. Can we just sweep these unimaginative quacks into the dustbin of technological history already???
Posted by: Quix | February 16, 2009 12:35 AM
I am not sure that Apple copied their store concept from Gateway. Sure they are both retail outlets made to sell hardware and accessories directly from the company. But the experience of shopping there is what set Apple stores apart. Kind of like comparing Nobu to Cracker Barrel. Yes, they're both restaurants. But beyond that, not much comparison in the idea.
Posted by: Evan MacGregor | February 16, 2009 12:53 PM
Perhaps the Microsoft Expert can help me install Vista or XP on my MacBook :-P
Posted by: John | February 17, 2009 5:54 AM
So THIS is why Microsoft wants more H-1B visas. Cheap foreign labor for their stores.
Posted by: Anonymous Coward | February 28, 2009 12:22 AM
The move into retail appears to be wrong headed and I can't make sense of it, but who knows. If Microsoft keeps branching out into consumer electronics with vertically integrated solutions a la Zune or Xbox, it may need its own store to showcase the products. As already pointed out, the hiring of a Wal-Mart exec doesn't bode too well, though.
Posted by: Admiral Halsey | March 1, 2009 12:31 PM