Notes on The Microsoft Store

I teach an undergraduate class at the University of Wisconsin-Milwaukee (about retailing management), and recently asked the study groups to recommend strategies for Microsoft as it opens its own retail stores. The class focused on Microsoft’s target market, store format and competitive advantages.

There was no “right answer” to the question, but there were some common themes that emerged:

1. Microsoft’s current target market is so broad that it needs to be more focused as it opens stores. Don’t try to be “all things to all people” within the four walls of a store, even if this is one of the company’s strengths. It may be possible to appeal to “techies” or to customers with a lower comfort level with technology, but not necessarily both customers under one roof.

2. Most students recommended a high degree of interaction (like an Apple Store), and thought Microsoft should leverage some of its unique “hardware” items (the Xbox, the Zune, and so on) that might not get enough credit today. They also recommended a high level of customer service, also similar to the Apple Store experience. The challenge is not to wind up as a “me-too” shopping experience.

Microsoft’s key advantage may be its position as a solutions-based provider, rather than as a builder of hardware. How to communicate this in a bricks-and-mortar or e-commerce experience? Competitors like Google are transforming the delivery of “solutions” at a faster pace than just about anybody else (read about Google Phone in today’s New York Times), so a traditional retail format could look dated very quickly unless Microsoft is prepared to be more nimble than its history suggests.

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