This week Microsoft made an announcement that they’re going to be opening a “small number” of stores, and they’ve hired 25-year Wal-Mart veteran, David Porter to handle the retail deployment. There has been plenty of discussion and jokes as to the viability of such a venture.
Microsoft’s previous retail venture at the Metreon in San Francisco was a bust, but it’s unclear what the purpose of that store was. They didn’t seem to be selling anything. There was no experience. It had the look of a museum where you just looked at things and didn’t buy anything. It was on the second floor of the Metreon which is essentially a ghost town. For those of you who haven’t been to the Metreon in San Francisco. It’s not set up like other malls. There are huge portions of it that people simply don’t go to.
Apple, Best Buy, and Fry’s seem to be the only retail electronics stores still standing. Apple has hands down the best experience, and they’re obviously paying for it with a very high employee to customer ratio, In return, customers pay for that experience by paying Apple’s premium prices. Best Buy and Fry’s aren’t so lucky. That’s because they’ve positioned themselves as being a meta-store for all electronics. So their brand is intrinsically tied to multiple brands.
The amount of money Microsoft can make from a handful of stores will truly be negligible. It’s obvious this effort is all about building brand. I know it’s been hip to slam Microsoft, especially if you’re an Apple lover, and Microsoft is well aware of its public image. It’s not a secret.
I think Microsoft is launching stores to make a personal connection with its customer base.
Putting a face on Microsoft
When you think of Microsoft, what’s the first face that comes to mind? Most definitely Bill Gates, maybe Steve Ballmer. But the image of Bill Gates is fading away as he’s distanced himself with the day-to-day operations of the company. Microsoft and almost all other tech companies have been accused of using stock photos of “Genericans” or general Americans. Nobody truly identifies with these people.
Conversely, when you think Apple you strongly think of Steve Jobs and then you think of those smart young adults that work at the Apple store who are eager to see you and help you out. THAT’s what Microsoft needs. And the value of personal interactions and word of mouth satisfaction will be huge for Microsoft’s brand. Microsoft simply needs more positive human interactions to be associated with its brand and its technology.
Can you pull it off with just software?
While I’ve always believed that software sells hardware (e.g. Milton Berle sold televisions. Who wants a box in their living room? No, but that box will let you watch “The Milton Berle Show.”), people come to retail stores to see gear. And Microsoft is a software company that made small ventures into hardware. They have a handful of peripherals (e.g. keyboards, mice) and the Zune and the XBOX. I don’t think that’s enough to get them to walk through the door. I’m very interested to see what kind of experience they pull off or if they partner with other hardware manufacturers like HP or Dell and sell their products alongside Microsoft products. We’ll see.
For advice on how to pull off a great electronic retail experience, read Robert Scoble’s piece on FastCompany. He goes through a thorough analysis of what works and what doesn’t in retail electronics.
Disclosure: Microsoft has been a client of Spark Media Solutions.
This news item is for the Spark Minute week of 2/16/09 which can be heard daily on Green 960 and 910 KNEW in San Francisco, CA.
