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Microsoft retail stores could be successful
I just read an editorial on The Mac Observer in which John Martellaro writes that Microsoft Retail Stores would fail. He bases his conclusion on the poor reception Vista has had in the market so far, specially among consumers, and the fact that Microsoft seems to have lost interest in that segment of the population.
I totally disagree. For starters, Microsoft currently produces one of the most successful consumer electronics device, the XBox 360. Microsoft could easily fill up any Apple Store just with Xbox 360 games and accesories. Then there is the Zune. Sure, that MP3 player isn’t nearly as sexy as the iPod touch but I could see more people buying it if it were properly showcased. Microsoft could also sell phones based on Windows mobile made by their hardware partners. Those phones are certainly not state of the art but they (almost) work as advertised and appeal to a segment of the population. Microsoft also produces some PC hardware that includes keyboards and mice which are quite popular. And then obviously there is software, Windows and Office of course, but let’s not also forget that there is much more, like the Microsoft Expression Suite which is a decent collection of products and finally highly popular PC games like Age of Empires or Flight Simulator. So, the perception that Microsoft does not have products that are compelling for consumers is totally wrong.
People also tend to assume that Microsoft would be unable to match the Apple shopping experience. I am not sure what they mean by that. Sure, Apple’s sales force tends to be nice and knowledgeable but having run a small chain of Apple retail stores for three years about ten years ago, I know that this is relatively easy to achieve when you only handle a small number of SKUs. The secret of Apple’s success has to be found somewhere else. You want to know what it is? Easy. People go to the Apple Store because it is usually one of the only stores in the mall that appeals to men (although not exclusively), and because there is free internet access. That was the genius behind choosing malls to open stores. People usually don’t go to Best Buy or Fry’s to just hang out, instead they go to a mall where there are more entertainment and food options. And where do men go when they are tired of watching the women apparel that their wives or girlfriends want to buy? That’s right, they go to the Apple Store. WHy? Because there simply aren’t many other options (and it could get even worse if The Sharper Image goes out of business.
There is a reason that explains why Apple hasn’t yet opened stores in Germany, France or Spain. Those countries haven’t embraced the retail shopping mall model like the US, the UK or even Mexico. It has to do with expensive and scarce real estate in downtown areas where affluent people use to shop. In those countries you may find malls in the suburbs but they will usually not house luxury or premium brands. You could argue that not all Apple Stores are located in malls, and you would be right. In fact all flagship stores (San Francisco, New York, Chicago. Tokyo and London) are on busy streets, but only major markets support that model. The problem is finding great locations for smaller stores. Nothing prevents Apple to open a flagship store on the Champs Élisées in Paris or Serrano in Madrid but where does Apple grow from there if there are no (suitable) malls?
Apple has great products but analysts and Apple enthusiasts must understand that many of those who enter the company stores do it often simply because of a lack of better options. That is great for Apple because it generates a disproportionate amount of foot traffic, but most of those people would probably welcome a little competition. I love Apple but I also like to spend some time at a Sony store, specially if the alternative is spending time at Zara or Coach. I am sure that if Microsoft decides to open new retail stores and like Apple places them in malls, they will be able to get a fair share of that traffic. Wether Microsoft deserves it or not is a different matter.