Will Microsoft’s Stores Be More Like Apple’s or Gateway’s?
Microsoft is moving forward with its plans to copy a page from Apple's playbook and open a chain of retail stores. Today the company announced the locations of its first two shops, which will be in shopping centers in Mission Viejo, California and Scottsdale, Arizona. Both stores will open this fall.
Redmond, which announced its retail ambitions in February, has said it plans to set up shop near Apple's retail stores. That head-to-head competition will occur at The Shops at Mission Viejo, which has an Apple Store, but not at Scottsdale Fashion Square, which doesn't.
Naturally, Microsoft-at-the-mall has led to plenty of wisecracks and skepticism, much of it understandable. Why? Because unlike Apple, Microsoft sells many of its most profitable products to consumers indirectly. If you buy a PC, you get Windows (unless you buy a Mac). Microsoft Office? Perhaps it came preinstalled on your PC. Or maybe you've used Office at work for years and figured you might as well buy it for the home too.
In other words, you're not crazy about Microsoft products. You're comfortable with them. Or maybe you don't like them, but you use them anyway.
Which leads me to wonder: Will Microsoft's shops succeed? Will they be wildly successful like the Apple Store, or a retail fiasco like the Gateway Country store?
A bit of background: PC maker Gateway launched a chain of retail shops in 1996. At one point it had more than 300 stores across the U.S. The Gateway Country outlets offered software, services, and hands-on training. They sold hardware too.
After the tech bust of 2000, Gateway's fortunes fizzled. The company began closing its retail shops, which proved to be money-losers. In 2004, it shut the last of its Gateway Country stores. The PC maker was bought by Acer in 2007.
So will Microsoft's stores be losers like Gateway's? Certainly, Redmond is a much bigger company than the Gateway of old. It has deep pockets and plenty of consumer products, include the Zune and Xbox.
But unlike Apple, Microsoft doesn't have a rabid fan base. The enthusiasm isn't there. Sure, some geeks somewhere will line up to buy the first retail copies of Windows 7, but most of Microsoft's consumer customers really don't care all that much. In that sense, Microsoft is more like Gateway, which sold a respectable if uninspired lineup of PCs and TVs. There wasn't a compelling reason to enter a Gateway Country store. Will Microsoft do better?
For its retail-store strategy to work, Microsoft will have to find a way to whip up enthusiasm among its millions of customers.