Microsoft to Open Retail Stores

Microsoft this week has talked openly about opening Retail Stores and even hired a seasoned Retail exec to lead the effort. From WSJ.com:

Microsoft Corp. said it hired a former Wal-Mart Stores Inc. executive to help the company open its own retail stores, a strategy shift that borrows from the playbook of rival Apple Inc.

The Redmond, Wash., company said it hired David Porter, most recently the head of world-wide product distribution at DreamWorks Animation SKG, as corporate vice president of retail stores for Microsoft.

In a statement, Microsoft said the first priority of Mr. Porter, who is also a 25-year veteran of Wal-Mart, will be to define where to place the Microsoft stores and when to open them. A Microsoft spokesman said the company's current plans are for a "small number" of stores.

Microsoft has been quick to state the purpose of these stores which is to build brand and connect with consumers directly unlike Apple which opened stores more for Distribution (although I think Apple stores drive brand experience the best). Microsoft Pri0 blog had Robbie Bach, head of the Microsoft Entertainment and Devices Division stating the same:

Q: Can you give us your thoughts on moving into retail? You guys have a lot of important partners, especially who resell products from your [Entertainment and Devices Division]...

Bach: "The way you have to put this in context is you have to think of it as just a natural evolution of what's going on in the market and it's a natural evolution of what's going on as we develop our brand.

"And I don't think -- I saw some of the commentary that this was designed to be the same as Apple or whatever. You should think about it, I think, quite differently.

"Apple's approach was about distribution. People forget that when they entered their stores [in 2001], this was quite a while ago, they didn't have distribution for Macintoshes, so they created their own distribution.

"We have plenty of distribution. These stores for us are about building our connection to customers, about building our brand presence and about reaching out and understanding what works and what improves the selling experience.

"So Apple you would think of as a volume distribution play. You should think of ours as much more of a brand and customer relationship investment more than anything else."

My take, this is great news coming from Microsoft. Microsoft few know have a very strong Retail Industry Practice where they have been working with various partners and have just launched the Retail Experience Center which blends, Microsoft's merchandising strategies as a consumer goods company and its solution capabilities as a technology provider for the retail industry.

This knowledge and a proof of concept store means a lot for the Microsoft Retail initiative. Think about the possibilities of Surface tables, Windows 7 with it’s Multi-touch features on big LCDs and Interactive Shopping Carts. Think about Store assistants telling you product features by keeping the product on the table which reads the tags and builds a rich interactive experience on the table. The only thing Microsoft should be wary of and will need is Execution and I am sure Microsoft would be working on that. They would learn from Apple Stores success and apply their own Retail Practice knowledge to make this a killer retail store, something we have so far only dreamt of and seen as Proof of Concepts only.