Microsoft is now taking a u-turn on its decision not to go the brick-and-mortar retail store route nearly a decade ago and is now planning to hit the high street again with 75 new retail stores across America over the next 3 years.
The announcement was made at Microsoft’s 2011 Worldwide Partner Conference this week in Los Angeles. With Microsoft explaining that having stores provides the company with a great insight into their consumers’ needs and requirements. The 75 retail stores will join Microsoft’s existing chain of 11 retail stores which have been built over the last two years.
The Strategic Importance of Retail Stores
Microsoft’s decision to expand its retail presence is a strategic move aimed at enhancing customer experience and engagement. By having physical stores, Microsoft can offer hands-on experiences with their products, such as Surface tablets, Xbox consoles, and various software solutions. This direct interaction allows customers to make more informed purchasing decisions and fosters brand loyalty. Additionally, these stores serve as a venue for customer support and services, providing a more personalized touch that online platforms may lack.
Moreover, the retail stores will act as a hub for various community events and workshops. These events can range from coding classes for kids to business seminars for professionals, thereby positioning Microsoft not just as a product vendor but as a community partner. This approach aligns with the company’s broader mission to empower every person and organization on the planet to achieve more.
Challenges and Competition
Even with 75 stores appearing over the next 3 years, Microsoft still has some way to go to match Apple’s 320 international stores, which have significantly contributed to Apple’s retail success. Apple’s stores are not just places to buy products; they are designed to be experiential spaces where customers can explore and interact with the latest technology. In the first quarter of 2011 alone, Apple made $3.2 billion in retail sales, showcasing the immense potential of a well-executed retail strategy.
Microsoft will need to differentiate its stores to compete effectively. One way to do this could be by offering exclusive in-store experiences or products that are not available online. Another strategy could be to integrate their retail stores with their online presence seamlessly, offering services like in-store pickups for online orders or virtual consultations with in-store experts.
Furthermore, the location of these stores will be crucial. High-traffic areas such as shopping malls and city centers could provide the visibility and foot traffic needed to make these stores successful. However, this also comes with higher rental costs, which Microsoft will need to balance against the potential revenue gains.
In addition to Apple, Microsoft will also face competition from other tech giants like Google and Amazon, who are also exploring physical retail spaces. Google’s pop-up stores and Amazon’s bookstores and cashier-less convenience stores are examples of how the retail landscape is evolving. Microsoft will need to stay ahead of these trends to ensure its retail strategy is successful.
In conclusion, Microsoft’s plan to open 75 new retail stores over the next three years marks a significant shift in its retail strategy. By focusing on customer experience, community engagement, and strategic differentiation, Microsoft aims to create a retail presence that not only competes with but also complements its online offerings. While challenges and competition are inevitable, this move could provide Microsoft with valuable insights into consumer behavior and preferences, ultimately driving growth and innovation.
Source: Venture Beat
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