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In its next step to connect with consumers, Microsoft will open a number of stores in select markets

Microsoft announced plans to open its own retail stores in an effort to connect with customers and better compete with the extremely popular stores from Apple.

"The purpose of opening these stores is to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy," Microsoft said in a statement on its website.

The company also said it has selected David Porter, former DreamWorks animation global product distribution manager, to serve as corporate vice president for the retail stores.  Prior to his stint at DreamWorks, Porter also served as in store ops, merchandising and IT of Walmart for more than 25 years.

Microsoft did not publicly disclose how many stores it plans to open, what markets will be targeted, or which products will be made available.  It's likely PCs will be sold with Microsoft Windows Vista loaded with other company software, with the store also used to be an advertising platform for Windows 7.

Porter will be in charge of deciding where stores will open, and how they'll market products to the public.  

"This is an exciting time with our strong line-up of upcoming product releases," Microsoft CEO Kevin Turner said in a statement.  "There are tremendous opportunities ahead to create a world-class shopping experience for our customers."

Apple, one of Microsoft's biggest competitors, has more than 200 stores worldwide, which helps draw in new Apple customers.  Microsoft's latest advertising campaign featured former CEO Bill Gates and comedian Jerry Seinfeld -- and although most PC fans were skeptical from the beginning -- the ads flopped horribly, and forced Microsoft to go back to the drawing board.

There are now 144 Microsoft employees serving as in-store "gurus" to help teach customers in electronics chain stores about Microsoft and its products.

Despite having the popular Xbox 360 video game console and Zune MP3 player, Microsoft has still had an extremely difficult time reaching out to owners of Microsoft products or potential customers.  Furthermore, the Vista operating system was not received very well by PC users, and Apple continues to chip away at the PC market while its iPod MP3 players already control the market.



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Looks like...
By amanojaku on 2/13/2009 1:22:19 PM , Rating: 2
MS hasn't learned from Gateway, Dell or any other company that's opened B&M stores. Good luck with this, MS, because you'll need it. Competition is stiff, and B&M's are a waste today.




RE: Looks like...
By rudy on 2/13/09, Rating: 0
RE: Looks like...
By waffle911 on 2/14/2009 4:27:59 PM , Rating: 2
quote:
There are now 144 Microsoft employees serving as in-store "gurus" to help teach customers in electronics chain stores about Microsoft and its products.

Looks like they're two steps ahead of you. Granted, they could stand to increase the number of these "gurus" to have at least one in every Best Buy at any given time.


RE: Looks like...
By mcnabney on 2/15/2009 5:03:41 PM , Rating: 2
This could actually be a very good thing.

If...

1. They stock it with the full line-up of MS accessories, common upgrades, and networking equipment.
2. They employee people who actually know Windows and PCs in and out. Answering simple questions. Upselling casual customers into a new wireless mouse..
3. Stock the entire lineup of X-box and 'Games for Windows'

This could compete directly against Best Buy, and likely win if they do #2. So this could be a PR, marketing, and sales win.

Plus - this could assist in rolling out some of the lesser known MS products like Home Server.


RE: Looks like...
By xphile on 2/15/2009 9:58:46 PM , Rating: 2
Hmmm - I foresee a PC loaded with every conceivable piece of Microsoft software as a sales gimmick / bonus, and I ask myself will we have 32 cores and 64GB ram standard to run by then or not?


RE: Looks like...
By TomZ on 2/13/2009 1:35:48 PM , Rating: 5
On the other hand, Apple is being pretty successful with that model. Whenever I pass the Apple store in the local mall, there are a lot of customers in there, even when the rest of the mall is pretty empty. The question is whether Microsoft can generate enough buzz to get people to come in. If they can, then the education/marketing opportunity would be worth it. Otherwise...


RE: Looks like...
By RamarC on 2/13/2009 1:51:29 PM , Rating: 2
Apple stores sell PCs, monitors, and iPod stuff and software. I wouldn't be surprised if an Apple store sold $20K in a typical week and had in store sales of over $2M a year. That's what makes a retail presence profitable.

But MS doesn't sell computer hardware (other than accessories like mice/keyboards/webcam/etc) and the zune has no rabid followers. From a software standpoint, most of MS' sales are in the corporate arena. Even with the xbox 360, I don't see how an MS owned and operated store could turn a profit.


RE: Looks like...
By TomZ on 2/13/2009 1:56:51 PM , Rating: 4
Stores like this don't need to turn an operating profit themselves if they serve a larger, more valuable marketing purpose. After all, Microsoft as a whole is more than just a retail chain.

I'm not arguing that I think this is a great idea, I'm just saying I think it is interesting. Microsoft is obviously pretty clueless about Marketing, so this could just be another bad idea...or who knows, maybe it will work?


RE: Looks like...
By bighairycamel on 2/13/2009 2:32:43 PM , Rating: 2
quote:
Microsoft is obviously pretty clueless about Marketing, so this could just be another bad idea.

I don't know, the "I'm a PC and I'm 4 and a half" commercial went over pretty well; my wife will attest to that.

Plus that little thing called the XBox 360... seems to me like the marketing was fairly successful on that one.


RE: Looks like...
By StevoLincolnite on 2/13/2009 11:31:08 PM , Rating: 2
I agree, they could open the store with a large chunk dedicated to the Xbox 360, Accessories and games, and offer deals that rival that of EB Games, probably add some booths where you could play the Xbox on Xbox Live! with mates at the same time.

Then you have the Zune, you could offer users the ability to buy from the Microsoft website and download the song to there player as well.

Probably throw in all there Keyboards, Mice, Controllers etc.

And then have a nice range of machines ranging from Netbooks to gamer orientated desktops and it would be awesome.

Hell they could even build an Internet Cafe into the store as well, so people can check my space while having a coffee.

Still I hope they come to Australia in full force, I would love to have a store full of Xbox Games finally, as the closest EB games is a good 6 hours away.


RE: Looks like...
By gstrickler on 2/13/2009 11:38:55 PM , Rating: 2
quote:
Hell they could even build an Internet Cafe into the store as well, so people can check my space while having a coffee.
Don't you mean Hotmail, I mean MSN, I mean Windows Live, I mean Yaa-who, ...?


RE: Looks like...
By Pirks on 2/13/2009 2:46:26 PM , Rating: 4
It may work third time, as usual with MS

So give it a few more years


RE: Looks like...
By gstrickler on 2/13/2009 11:21:29 PM , Rating: 3
Think different.

The Microsoft way.

---
Back to reality for a moment. Does anybody else see the absurdity in the new Microsoft advertising slogan?

"Windows - Life without walls"

If you don't have any walls, why in the heck do you need windows and where would you put them?


RE: Looks like...
By callmeroy on 2/13/2009 1:58:02 PM , Rating: 2
The MS stores will sell computers too. I don't know what the DT article said (I didn't read it because I read the story already from another source and I figured it would be redundant)...but from the report I read the stores will sell MS software and merchandise (of course) but you'll also be able to buy computers there as well -- naturally all Windows based machines.

I just mainly think its ridiculous in the current economy to do this now....I mean in such un-certain times isn't it wiser to just save any "extra" cash you have and for now just pay the bills you need to survive -- like buying food, your utilities and your mortgage? You'd think a corporation would think with like logic as well.


RE: Looks like...
By TomZ on 2/13/2009 1:59:53 PM , Rating: 3
quote:
I just mainly think its ridiculous in the current economy to do this now
A recession is a GREAT time to one-up your competitors, who might be in "survival mode" as you are suggesting.


RE: Looks like...
By callmeroy on 2/13/2009 2:10:07 PM , Rating: 2
Well i suppose one could say that but its a weird concept to me still, after all this isn't just a run of the mill recession this is a pretty bad one. Unemployment rates alone tell us that, let alone forclosure and consumer confidence data (although January they say retail sales actually were up a bit).


RE: Looks like...
By MarcLeFou on 2/13/2009 4:06:48 PM , Rating: 2
Actually, I read somewhere that the retail sales were higher in january than december. If that's true this is a really good sign as I've never seen a good january at retail ... ever.


RE: Looks like...
By TomZ on 2/13/2009 4:18:44 PM , Rating: 3
They weren't higher in January than in December, but January's sales were higher than January one year earlier. And most importantly, that figure was up when many economists thought it would be down.


RE: Looks like...
By jeff834 on 2/14/2009 2:05:13 AM , Rating: 2
Seems like making stores creates jobs which is never bad for unemployment. I work for Sprint right now which has been pretty good pay and benefits, but if MS is hiring for a B&M store and offered decent pay and benefits I'd jump ship and go over there in a second. As for business moves, frankly I think MS has a better chance of weathering a bad economy than Apple does, I mean when you're unemployed how many $3000 laptops do you buy?


RE: Looks like...
By JAB on 2/14/2009 6:44:24 PM , Rating: 2
quote:
As for business moves, frankly I think MS has a better chance of weathering a bad economy than Apple does, I mean when you're unemployed how many $3000 laptops do you buy?
Apple has a better ROI 11 billion in the bank and sales are growing- though very slowly. MS and their mission to be compatible with nearly every imaginable piece of hardware ever made is not easy or cheap. Apples bankruptcy was the best thing that ever happen to them. they got in the habbit of dropping things that cost too much like legacy support. This obviously has some issues with business sales and tinkerers but it does help out their profitability.

Stores like these are often never intended to make a profit in the short term they are living R&D centers.


RE: Looks like...
By callmeroy on 2/13/2009 2:04:07 PM , Rating: 2
Another thing I left out -- unless MS offers discounts (why are you laughing?) at their stores...seriously why do I want to go to their stores than Best Buy that I'm used to and in some sense "comfortable" with. I mean the only reason I hate best buy is because Geek Squad is pathetic and ridiculously over charge folks for the simplest of things that I feel bad seeing folks who know nothing get so ripped off, that and crowds..i hate crowds.

But they do have a lot of stuff under one roof and its close to my house. And lastly Best Buy is the hands down best place to buy DVDs near my house - the selection destroys any other store.


RE: Looks like...
By austinag on 2/13/2009 2:36:58 PM , Rating: 5
You guys are all forgeting one thing; all of you/us posting on this website represent a pretty computer/tech/OS savy bunch. This kind of store is aimed at picking up the kind of consumer that needs to be walked through the process, doesn't understand menus or F keys.
You know, Apple users.


RE: Looks like...
By PogoThePrez on 2/13/2009 9:24:51 PM , Rating: 1
I'd like to see the lesson on how to right click


RE: Looks like...
By melgross on 2/15/2009 6:05:54 PM , Rating: 2
And most PC users.

Gateway did real well with their stores.


RE: Looks like...
By Pirks on 2/13/2009 2:53:44 PM , Rating: 1
quote:
I just mainly think its ridiculous in the current economy to do this now
Apple's most recent earnings call pretty much contradicts your words.


RE: Looks like...
By randomposter on 2/13/2009 2:51:27 PM , Rating: 2
quote:
Apple stores sell PCs, monitors, and iPod stuff and software.

quote:
Even with the xbox 360 ...

You know, this raises an interesting question: Why hasn't Apple tried their hand at gaming consoles? It seems like exactly the kind of market that suits their business model: shiny electronics, brand/franchise loyalty, and strong vendor lockdown of content.


RE: Looks like...
By GeorgeH on 2/13/2009 3:15:14 PM , Rating: 5
Because they'd have to make a controller with more than one button.


RE: Looks like...
By MonkeyPaw on 2/13/2009 5:32:42 PM , Rating: 2
No, they'd just make a white version of the original Atari joystick. Then all they'd need to do is market the complex nature of the "other" controllers out there, and how the Apple controller "just works."


RE: Looks like...
By zerocool84 on 2/13/2009 6:38:41 PM , Rating: 2
Ahahah and they'd get a pantent on the Atari joystick and sue anyone trying to make 3rd party games and hardware for it.


RE: Looks like...
By MarcLeFou on 2/13/2009 4:09:46 PM , Rating: 2
Apple and gaming have not been so succesful in the past ... although that is slowly changing with the iphone apps.

When one of the 3 console maker exits the market, I wouldn't be surprised to see Apple try to take its place ... but they do have a Nintendo in the console market which I see as doing the Apple "recipe" very well ... perhaps even better than apple.


RE: Looks like...
By bighairycamel on 2/13/2009 4:32:20 PM , Rating: 2
Oregon Trail and Number Crunchers were like crack for me back in '91.


RE: Looks like...
By melgross on 2/15/2009 6:03:08 PM , Rating: 2
The figures Apple gave for the lst quarter was $7.5 million average per store. Of course, some big stores do much more than that, and so that skews the figures, but still...


RE: Looks like...
By Smartless on 2/13/2009 2:14:56 PM , Rating: 2
True its about the buzz. Take a look at what Microsoft can directly offer from their store.
1) Zune - Never an Ipod killer
2) Xbox 360 - Hmm why buy one from the store?
3) Keyboards and Mice - Probably one of the only accessories they actually sell.

So I have to agree, unless they do beta-testing for the general public in these shops, I don't see it being a success.


RE: Looks like...
By Master Kenobi (blog) on 2/13/09, Rating: 0
RE: Looks like...
By amandahugnkiss on 2/13/2009 5:27:26 PM , Rating: 2
Not to mention it's a great venu for them to demo new and upcoming products in the way they deem appropriate or in a way that greater utilizes certain capabilities of new tech. A pretty simple example would be an in-store demo of a complete home entertainment system that integrates Home Server, Win7, XBOX, Zune, IPTV, AVRs, etc... A quick look online shows they have a larger product catalog than 'just' the Zune, 360, and input devices. They have a massive software catalog and they could include vendor items such as PCs and WinMobile devices. I'd be happy just have access to a Surface unit that wan't sporting the UI available at the AT&T stores.


RE: Looks like...
By VoodooChicken on 2/13/2009 5:43:54 PM , Rating: 1
Maybe if they stick a Jamba Juice inside each store and establish a "countertop of experts." At the very least it might be able to make use of a bunch of laid off Firedogs. Not like they have busy calendars.


RE: Looks like...
By Keeir on 2/13/2009 2:15:28 PM , Rating: 3
Its would be intesting if the "Sony Style" stores are actually doing well...

But in the end, it seems like Apple and Sony are both marked up extensively for brand image... A microsoft computer/electronic store would need to compete with Best Buy... which didn't work for CompUSA or Circuit City


RE: Looks like...
By crystal clear on 2/14/2009 2:16:31 AM , Rating: 2
quote:
On the other hand, Apple is being pretty successful with that model.


Apple had a product line up that proved extremely attractive to the mainstream consumers/buyers.

From the the ipod to the iphone Apple used these best sellers to promote in their stores the Macs & Notebooks.

Apple had products like the ipod & the iphone that enticed prospective buyers,namely the mainstream buyers & NOT the I.T. crowd. to enter & browse around the attractive display & interior of the Apple store.

Does Microsoft have that sort of a product lineup to attract cuctomers ?

Like you rightly said-

"The question is whether Microsoft can generate enough buzz to get people to come in".

And you correctly end your comment with

Otherwise...

This is not the first time Microsoft has taken this retail venture,they failed the last time.

Did Microsoft Learn From Its Last Retail Experience?


RE: Looks like...
By nilepez on 2/14/2009 8:15:21 AM , Rating: 2
The question is does apple generate tons of sales via their stores, not whether or not they generate foot traffic.

Average people go to Apple stores? Great, but is that why they buy an iPod or an iPhone? What they do offer, which I think is useful for computer users, is classes to use the Macs. My mother was going to go Mac, and a friend, who'd recently switched told her not to do it, because there was no Apple store near my mother and her friend felt that the switch to OS X was too difficult without classes (and both are people who've used computers for 20+ years).

So from an education POV, the store for MS makes sense, just like it does for Apple.

Otherwise, I'm a bit skeptical of the idea, but we'll see what it looks like


RE: Looks like...
By crystal clear on 2/14/2009 8:34:08 AM , Rating: 2
With the retail strategy, Microsoft said it hopes to articulate and demonstrate its innovation and value proposition. It will pass on "lessons it learns" from the stores to its retail and OEM partners.

Microsoft can loose millions & then simply write it off by calling it a good learning experience.


RE: Looks like...
By invidious on 2/13/2009 1:39:43 PM , Rating: 2
M$ doesnt sell computers, they are nothling like dell or gateway. The stores are for product support and software licencing. If you think people are too smart nowadays to need on site support then you haven't worked in the industry before.

Tech support is an obsurdly large market. Its actually more profitable than salels in some respects sense you do not need spend any developement fees. Right now most windows support in the private sector has been 3rd party, why wouldn't they want to reclaim it?


RE: Looks like...
By Machinegear on 2/13/2009 1:40:15 PM , Rating: 5
This was my initial thought as well.

Instead of boring brick and mortar product stores I think MS should get creative by opening up Xbox360 internet cafes near government schools to steal away the youth market Apple enjoys. Then staff these cafes with nice looking gals to get rid of that nerdy ‘PC guy’ image. :)

Heck, now thinking about what I just suggested, I might even spend my lunch break in a place like that!


RE: Looks like...
By clovell on 2/13/2009 4:15:50 PM , Rating: 2
I disagree. I tend to think this will help boost Microsoft's image, and maybe even encourage more third-party accessory vendors to develop for Microsoft (Think Altec Lansing, not MadCatz - there are currently a total of two speaker docks available for use with the Zune - which is a superior peice of hardware compared to the iPod).

One can only hope.


RE: Looks like...
By phxfreddy on 2/13/2009 10:33:22 PM , Rating: 2
Sounds attractive. The BM store!


RE: Looks like...
By mmcdonalataocdotgov on 2/17/2009 11:53:15 AM , Rating: 2
But they have learned from Apple - a direct competitor, who is having great success with their stores. MS is not selling white boxes, per se, so not doing what Gateway, Dell and others did. Perhaps they should.


"And boy have we patented it!" -- Steve Jobs, Macworld 2007

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