Department of Déjà Vu: Last Microsoft Retail Store Foray Was a Bust
by Kara Swisher
Posted on February 13, 2009 at 6:00 AM PT
Displaying BoomTown’s advanced age and elephantine cache of meaningless tech memories, after news yesterday that the software giant was plunging into the retail market, I was surprised to find little mention that Microsoft’s last store effort ended in failure in 2001.
That’s not to say it’s a particularly good or bad idea to hire a former Dreamworks and Wal-Mart (WMT) exec named David Porter (pictured here) as vice president of retail stores to create Microsoft-branded stores–or as the company announced yesterday, “to create a better PC and Microsoft retail purchase experience.”
While Microsoft (MSFT) sells most of its consumer products via big-box retail stores like Best Buy (BBY), and the retail market for just about everything is weak, Apple (AAPL) has definitively proven that a well-designed retail store can be a powerful marketing tool.
The visually stunning and infectiously fun Apple stores, in fact, have been an important part of its recent surge in mainstream consumer appeal, becoming hubs of activity and even social life in its mostly big-city locations.
In fact, that was just the idea behind microsoftSF, which was located in San Francisco’s Metreon Sony Entertainment Center.
The huge 8,500-square-foot store, with 160 Microsoft products and related software and hardware from 30 partners, was billed in a June 1999 press release as “an interactive, hands-on retail environment in which people of all ages, from all walks of life and at all levels of technological expertise can explore the benefits technology can bring them. Far more than just another computer store, microsoftSF is a showcase for the latest technology from Microsoft and the hardware and software companies with which it collaborates.”
The microsoftSF store, which I visited several times (but bought nothing, although I was mostly a PC user at the time), was very attractive and the only such store in the world, with a “Road Warrior” arena, a lounge, a gaming area and more.
Said the press release: “To make all this possible, microsoftSF deploys Microsoft Windows and more than 100,000 feet of copper cable, 60 Sony PCs, 18 laptop docking stations, four dual-processor servers powered by Hewlett-Packard Net Servers, a Cisco Systems network, and an array of hidden audio speakers that create 16 individually controlled sound zones.”
And Microsoft CEO (then President) Steve Ballmer weighed in enthusiastically:
“We are delighted to be able to showcase in this one-of-a-kind retail environment the entire range of Microsoft software and hardware, as well as the technology of other companies who share the vision of how the PC and the Internet can empower people any time, anywhere. San Francisco and the Silicon Valley are home to the world’s largest and one of the most sophisticated high-tech audiences, so this was the natural place to create this site–dedicated to showing, in an interactive environment, the way technology can enhance our working, learning, living and playing.”
Not so much, as it turned out. The store closed in 2001.
But that does not necessarily mean that the new and much expanded efforts will have the same experience. The Metreon, which was sold off by Sony, was an odd mall then and still is, although its movie theater is successful.
And, in this effort, Microsoft will have control of the whole enchilada.
Plus, if well done, it is not such a bad idea to have a place–perhaps only in highly-trafficked locations in big cities–to show off its consumer wares, especially its popular Xbox 360 and other products (please, not the Zune!).
More importantly, given the disaster that has been the Windows Vista experience, it is probably a good idea to have a place to get people interested in Windows 7, especially its touch capabilities, when it rolls out this year.
Also, I still like the Surface interactive table, even if it is mocked in a popular video as a “big-ass table.”
Of course, only Apple stores have done well so far in this genre, as everyone, from Gateway (GTW), Sony (SNE), Nokia (NOK), Helio and Palm (PALM), has had rough retail experiences.
So, Porter certainly has his work cut out for him, at least judging from the press release from Microsoft yesterday:
“Defining the time frame, locations and specifics for planned Microsoft-branded retail stores will be Porter’s first order of business. The purpose of opening these stores is to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy.”
Said Porter: “There are tremendous opportunities ahead for Microsoft to create a world-class shopping experience for our customers. I am excited about helping consumers make more informed decisions about their PC and software purchases, and we’ll share learnings from our stores with our existing retail and OEM partners that are critical to our success.”
He’ll have to wait to see if the second time is a charm.
Comments
Other than the Board of GE, there has never been such a collection of empty suits around a conference table as Microsoft.
A couple of ideas for them: on suitable HD displays, a continuous loop of Ballmer jumping around on stage, made famous by uTube.
Posted by David Owens at February 13th, 2009 at 12:30 pmZunes prominently displayed, with marked down prices, this week only!
Tables full of cheap plastic computers, packed with crapware.
A Genius bar with guys dressed up like Bob.
An entire wall filled with various virus detection software.
Discontinued Motorola phones running Windows Mobile.
Sadly, you didn’t do much homework on the Metreon MS store or you would have found a much more interesting story about why it was closed. The Metreon houses the Sony Playstation store, and Sony kicked Microsoft out of the Metreon when Microsoft launched the Xbox and the last thing Sony wanted was to have MS hawking their game console next to Sony’s flagship store.
Posted by Trevor Plantagenet at February 13th, 2009 at 9:21 pmDavid Owens: You have a place reserved at that table… grab the ring!
But seriously, why does the world need something like this to demo software when they have places like Comp USA and Circuit City?
Oh, wait.
Yes, more and more people are getting their PCs through the mail or at deep discount stores that don’t have demos of anything. The price point of an “average” home user machine was in free-fall a few years ago after processor speeds stopped doubling every 20 minutes.
Those price points were rescued by throwing in terabyte hard drives, multiple laser based devices, cameras and monitors bigger than many people’s TV sets.
In the end, the hardware integrators are doing a lot of work to get MS products out there, and struggling to make a decent return in the process. Applications software companies too have withered in the shadow of Microsoft acquisitions, and the reality already is as David Owens suggests, that those few stores selling software are focusing on what people come in to buy: anti-virus, anti-spyware, network security and various Windows-speedup utilities.
Who has time to run applications?
PS: Don’t forget the Zune listening room!
Posted by Mac Beach at February 14th, 2009 at 5:26 pm@Trevor Plantagenet
Speaking of homework, according to this SF Chronicle article from 10/26/01:
“In the face of dwindling sales and attendance — the place has been a ghost town for months — Microsoft and Sony (Metreon’s landlord) have quietly agreed to close down the Microsoft store and replace it with, well, more of the same.”
“MicrosoftSF no longer fits with Microsoft’s or Sony’s core businesses,” Metreon spokeswoman Kirsten Maynard told me. “It would require a significant investment from both companies to keep going.”
In other words, business sucks.”
http://www.sfgate.com/cgi-bin/.....173923.DTL
Posted by Gary Seto at July 15th, 2009 at 4:00 pm