February 08, 2013

What's Behind Microsoft's Push for Brick-and-Mortar?


Microsoft's plans to launch new retail locations seem almost counter-intuitive in an age where more and more commerce is done online, either from a desktop or from a mobile device. But even in 2011, Microsoft showed off plans to launch 75 new retail locations by 2014's end. That's got more than a few people wondering what's up with Microsoft's plans to bring out more stores, and the early analysis suggests interesting possibilities.

Microsoft's plans to open more retail locations have been proceeding apace for quite some time now, including the recent announcement of several more stores set to open in the near term, going so far as to give Microsoft its first retail presence in Michigan with a store at the Somerset Collection. But a closer look at possible explanations for the expansion yields some exciting possibilities.

Some have projected that Microsoft is, essentially, trying to take its case to the users. While there's little doubt that Microsoft's enterprise hegemony is in no risk, the consumer side of the equation has been changing rapidly. With tablets, smartphones, and the growth of the “bring your own device” (BYOD) movement in some workplaces, more users are turning to the smaller and more portable devices rather than bigger laptops or mostly immobile desktops. Microsoft's lineup of pre-holiday pop-up stores, seen in that light, makes perfect sense in retrospect; it's out to better connect with the end user.

The recent launch of Windows 8 is also showing that point off. While the launch did very well indeed--approximately matching that of the launch of Windows 7--the hardware sales haven't seen a boost to match. That's one point Microsoft is likely looking to fix with storefronts, taking a page out of Apple's book to show off its products in more intimate and hopefully connectable settings. Potentially, it may also be taking advantage of the practice known as "showrooming", in which users turn to a brick-and-mortar store to get hands-on information about products before turning to the Internet to find the best price on an object.

Some have wondered, however, if this move may not ultimately hamper Microsoft. Microsoft has put a lot of time and money into promoting its Windows 8 devices by making them look cutting-edge, but this may be a dangerous conflict of strategies in the end. Putting cutting-edge devices in a medium that's seen as old and tired--or worse, an Apple knockoff--will hurt the perception of the cutting-edge devices in a kind of negative halo effect.

It's a difficult balance to strike; people are still quite clearly using brick-and-mortar locations to find out more about products, so closing them runs a risk of shutting off a key purchasing motivator. But by like token, done improperly, the stores represent not only an expense that isn't getting recouped on sales but also a potential impact to the product line itself that Microsoft has been so carefully cultivating as top of the line. Microsoft has its work cut out for it in keeping consumers in the Microsoft camp, but only time will tell if it can ultimately succeed.




Edited by Rich Steeves



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