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February 12, 2009 3:55 PM

Microsoft opening retail stores

Posted by Benjamin J. Romano

After years of rumors, Microsoft today confirmed that it's delving into retail. The company is hiring an executive "to create a better PC and Microsoft retail purchase experience for consumers worldwide through the development and opening of the company's own retail stores," according to this news release.

To lead the effort, Microsoft hired a retail executive with 25 years of experience at Wal-Mart. David Porter, most recently head of worldwide product distribution at DreamWorks Animation, will report to Chief Operating Officer Kevin Turner, who rose from checkout clerk to chief executive of Wal-Mart's Sam's Club division. Turner joined Microsoft in September 2005.

[Updates throughout, 5:04 p.m.]

Microsoft has taken tentative steps into retail in recent months. As part of its broad Windows marketing campaign, the company launched "Windows-branded sales environments and store-within-a-store concepts" at Circuit City and Best Buy. It created a team of "Microsoft Gurus," similar to Nordstrom's personal shoppers to help people shop. It also built a "Retail Experience Center" in a Redmond warehouse to study PC buying.

It will be up to Porter to determine the when, where and what of the retail stores. A spokeswoman said via e-mail the company will target "a small number of high profile experience stores in a few major cities around the world."

The purpose of the stores, according to Microsoft's release, "is to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy."

As far as products, expect the stores to carry Microsoft software and hardware -- including the company's Xbox 360 game consoles. Microsoft is still determining whether the stores will sell PCs and other products from the company's partners.

As bluejava2 pointed out in comments on this post, Microsoft had an earlier retail presence in San Francisco's Metreon mall.

The store was called microsoftSF, according to the spokeswoman. "The space was owned and operated by Sony Retail Entertainment," she added via e-mail. [Update, 5:42 p.m.: Check out this news release from June 1999 that describes the microsoftSF store in greater detail. It carried "everything from software to sweatshirts."]

Of course, people are immediately comparing Microsoft's retail efforts to Apple, which has had immense success with its retail stores. The Apple Stores, like the company as a whole, have a following that borders on the religious. The ifoAppleStore blog covers every detail of Apple's retail outlets, including how the company arranges the table displays.

And today's report on ifoAppleStores underscores just how tough a comparison it will be: "Apple plans to entirely reorganize and refocus space within the stores to emphasize customer education, and software over hardware. ... The front section of the store will promote, 'Why You'll Love a Mac,' catching visitors when they first enter the store. The section will have signage and brochures pointing out the advantages of a Mac over a Windows PC."

Some initial reaction to Microsoft's retail moves:

Mary Jo Foley: "I've been very vocal in complaining about the dwindling number of retail stores where users can evaluate Windows PCs from different vendors, side-by-side. ... I'm doubtful Microsoft is going to be able to pull off anything as sleek and hip as Apple has with its retail stores."

Sam Diaz: Gateway, "[t]he once-strong PC maker, which is now part of Acer, tried desperately to make a retail store work years ago. It added training classes, a service department and even made room on its shelves for other electronics devices that interacted with a PC - such as mp3 players and digital cameras. But nothing paid off. I don't know if Microsoft - which really has no brand cachet for physical products other than Xbox (and maybe Zune, too) - can pull off a retail model any better than Gateway."


More, 5:32 p.m.: Joe Wilcox reminds us that he has prodded Microsoft to open retail stores for two years running. "There will be fear of channel conflict. But c'mon. CompUSA is gone. Circuit City is going. Who can guess which Microsoft retail partner is next. Microsoft is right to open stores. It's retail partner ranks are shrinking."

Emil Protalinski notes that Fudzilla actually reported this rumor in April 2008. His take: "A store full of software and PCs running them isn't enough to keep me interested. A fun-filled lounge-like environment though, I could see working quite well in Microsoft's favor." He also dug up the image above from The Simpsons.

And while we're watching cartoons, check out this clip from a recent episode of The Simpsons sending up the Apple Stores:

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