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Microsoft Opens First Retail Store

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Microsoft has jumped into the retail arena and opened its first store in Scottsdale, Ariz., featuring interactive technology and a sleek modern design. This is the first of several planned stores for the software giant, the next opening on Oct. 29 in Mission Viejo, Calif., and is being celebrated by the company as an opportunity to connect with customers and elevate the Microsoft brand. But some analysts see this move into retail, and even the design of the stores, as derivative of archrival Apple.

Massive LCD screens line the walls, displaying scenic panoramas (including of the local Arizona landscape) as well as Microsoft products. Below these screens PCs set up with Zunes, Xbox consoles and headphones are available for visitors to try out, and a “gaming zone” offers giant screens on which customers can play popular games including Rock Band and Halo.

“Our customers have told us they want choice, better value and great service when shopping for technology, and that is what we will deliver through our Microsoft stores,” says David Porter, corporate vice president of Microsoft Retail, in a statement. “We want to showcase what’s possible with the full Microsoft brand.”

The opening came in time for the company’s new Windows 7 operating system and these are prominently displayed along with the PCs, Xbox consoles and range of other software and hardware that flank both sides of the stores.

But much of the clean, simple look of the new store bears a striking resemblance to Microsoft rival Apple.

“Launching a Microsoft retail store, these guys are playing catch-up to whatever Apple does,” said Rob Frankel, branding expert and author of the book “The Revenge of Brand X.” He points to the design as looking different, but really just a variation on the Apple store’s sleek and simple design. “Microsoft has no brand. They have an identity and they have very high awareness, but try asking two people why they insist on Microsoft and you’ll rarely get the same answer.”

Microsoft is emphasizing the personalization that the new stores will offer, with consumers able to customize their hardware with external “skins” and create an original ring tone for their Windows mobile phone. When a customer purchases a computer, they will have a 15-minute session with one of the employees to get set up their applications, passwords and personal preferences. The store includes a Microsoft Answers Suite, where technical advisors offer assistance to patrons with tech issues.

“The idea of customizing a product on a mass scale, there’s a branding experience about that and there’s a connection with the customer—all that stuff is usually good,” said Scott Testa, professor of business at Cabrini College. But Testa supports Frankel’s outlook on Microsoft’s originality as a brand: “Microsoft copies everything from Apple, so why wouldn’t they copy their stores?”

Testa believes that in opening stores when it has, Microsoft followed the company pattern of waiting until something was “tried and true” before jumping in. Nonetheless, he believes that entering the retail arena will be a good thing for Microsoft, and that it is better late than never.

“I don’t think they see it as a big profit driver. I think they see it as a brand-building experience and marketing experience more than anything. This will be a grain of sand on the whole beach of Microsoft’s revenues and operations,” said Testa. “But from a branding perspective it makes a lot of sense. The timing’s good, they get some press for the stores, Windows 7 is coming out and the holiday season is coming up. It makes sense.”