Microsoft jumps into the retail store game

It’s official: Microsoft has answered Apple’s challenge in retail store sales. Locations and opening dates have not been specified yet, but it appears the number of stores will be small, with a focus on building brand awareness and excitement for Windows products. The effort is being spearheaded by a former Walmart executive, David Porter, who was most recently head of worldwide distribution for Dreamworks SKG. It would appear that the Apple Store’s runaway success in luring consumers has finally made enough of an impact on Microsoft that they feel the need to respond—eight years late, but better late than never, right?

The concept of a Microsoft retail store leads to several interesting questions. First and foremost, just what, exactly, will the stores sell? Microsoft makes mobile devices, the Windows OS, business software, Office, entertainment consoles (Xbox, anyone?), and some hardware devices such as mice and keyboards. Many of these items are separate, standalone brands, such as XBox. Worse still, many of these items are utilitarian. For example, to many consumers, Windows isn’t really a brand, it’s just what came with the computer. Do you know what brand your steering wheel is? Car seats? No? For many users, Windows is simply what they see when they turn the computer on; it’s not a hip brand name. Neither, for that matter is Macintosh. But while Apple has built an association between Macintosh computer around the iPod brand, Microsoft has no easy point of entry. (Zune? Windows Mobile? Anyone?

In addition to selling the coolness of the iPod, Apple can also sell computers in their stores. The Mac OS (‘Books, iMac, etc.) sells Apple computers—often to people who came in only to buy an iPod. What will Microsoft sell? They do not control their own PC manufacturing, and selling Dell or Lenovo or HP computers would mean extra supply chain headaches and inconsistent branding. Everything in an Apple store either carries an Apple logo or is supporting hardware/software (often in packaging that emulates Apple). Nobody else sells many of these items, so the Apple Store or online retailers are the only choices. By contrast, anything Microsoft introduces will be cannibalizing existing sales. Xboxes are sold at Best Buy, as are most brands of computers,and you need no store to buy a Dell. So the question of inventory remains uncertain at best.

In addition to unadulterated coolness, Apple stores offer something more: lasting support for buyers. This is one of the keys to both the financial and consumer success of the stores. Need help with something you’re doing? The Apple store has one-to-one sessions. Broken iPod? Schedule at the Genius Bar. Personally, most of my iPod accessory purchases have been while waiting for a Genius appointment—good for Apple’s bottom line, and great for impulse buyers like me. Apple has succeeded in doing something web developers have sought for years; they’ve made their stores “sticky.” No, not like a puddle of dried soda on the floor sticky, but sticky in the sense that customers return to the store regularly for many needs.

In a statement, Microsoft explained the purpose of their stores, which is “… to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy.” This makes consumers sound like bacteria in a scientist’s petri dish, and it says nothing about why these consumers will return to the store. “Deeper engagement” is great business buzzword-speak, but it will be crucial to the success or failure of the stores that the consumers actually get something more than some cool-looking surface tables and Windows 7 demos.

What do you think? Will Microsoft be the next Apple in the retail business, or will it go the way of the Gateway store? Or, will the Microsoft store be like the next Sonystyle—an interesting store with some cool stuff, but ultimately not a big sales draw? And do you ever imagine a line outside the Microsoft store like the lines for the iPhone 3G?

Via [WSJ]