Monday, February 16, 2009

Microsoft to Open Retail Outlets: Fatal Error?

I'd like to give a Darwin award out to one of my new favorite non-awesome companies. Hooray, Microsoft! Yes, pesky Apple is stealing away valuable Gen Y college students and young professionals. However, does this mean that you really want to open brick and mortar retail outlets? I have a prediction for you; fail.

In case you haven't heard, the AP reported Microsoft plans to open its own stores to improve the PC-buying experience. I don't really want to describe any more of the article because it almost makes me angry, but you can click on the link to read more if you'd like.

The fact I'm angry isn't because someone wants to invest in retail. So many companies, including Apple, LaCoste, Nike, and countless other companies have recognized the value of retail stores and controlling your product at the final stage of consumer interaction and purchase. However, the fact is that Microsoft is doing it all wrong. As much as I laugh at Apple's ads mocking a faux-Bill Gates, I am starting to believe Microsoft and their senior board may actually be as unintelligent as Apple shows them to be.

There are three fatal erros that Microsoft already made...and they haven't opened any stores yet! I'm going to outline them below, but feel free to add your own; I'm pretty sure there are plenty more to discuss.
  1. Illogical choice in retail leadership: Hiring David Porter as the corporate VP of retail stores does not do the trick. As a 25-year veteran of Wal-Mart and most recently with Dreamworks as the head of worldwide product distribution, this is fatal error #1. What does a man who produces big-box stores or distributes DVDs know about improving the PC buying experience? What experience does he have with small boutique retail spaces compared to big box stores? What on Earth made them think a man with experience in distribution and supply chain knows anything about pimping the retail world with cool boutiques that improve shopping experiences? Then again, maybe Wal-Mart shouts original and creative store design and improved customer experience over its competition to everyone but me and my friends who refuse to shop there. Seriously, Microsoft, what were you thinking?
  2. Poor timing: Microsoft spent its time as a wholesaler pushing its operating systems and products to retailers. They operated a low overhead and low operating expense business (comparatively). Now, Microsoft wants to enter the high overhead and high operating expense game of retail during the worst economic downturn since the Great Depression. Really, Microsoft...let me know when you have your bake sale with $10,000,000 cookies to compensate for your recession-affected retail stores.

  3. Confusing brand image: Microsoft is an operating system. Their OS support business, creative media, and games. How do you put this into one retail space? What do you have your associates wear? What trend do you follow? Business attire certainly doesn't reflect the gaming side of Windows, and black tee-shirt wearing Apple clones won't give respect to the business functionality of Windows. Microsoft is so broad in its application and functionality, it will be difficult to capture this into one cohesive theme for its stores.
Long live Apple; at the rate Microsoft is going, it won't be too hard for Apple to continue its growing streak and take market share from the big boys. With the decisions Microsoft is making, I think they deserve to lose it to a more intelligent competitor.

1 comment:

Jenna said...

I think Microsoft should save themselves the money they would invest in retail stores and stop outsourcing their technical support. I just had the WORSE experience with them...Yet still debating between purchasing a Mac or a PC. Thoughts?

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