Store Wars: Microsoft vs Apple

Microsoft: plucky underdog or retail road kill? Microsoft opened 2 stores last October in a timid challenge to Apple's hit chain. Storage Bits revisits one and an Apple store to see how it's working out.

Location, location, location 50% of the world's Microsoft stores are in Scottsdale Arizona, a mere 120 miles from Storage Bits' mountain home. Monday I revisited the store I first wrote about last October [see A visit to Microsoft's first store].

To compare I also checked out a nearby Apple store in a 3/4 empty Scottdale shopping center. The Great Recession has hammered Phoenix - where homebuilding was 30% of the jobs - and Scottsdale Quarters has only a few open stores.

Great expectations Microsoft is planning to open 2 more stores - 1 in Denver and another in San Diego. That's a leisurely rate for the world's most profitable corporation: in their 1st 7 months Apple opened 27 stores.

Microsoft stores look like Apple stores: they were designed by the same architects. Microsoft uses flat screen displays while Apple has static illuminated graphics. Otherwise not much different.

[See pictures of both stores here.]

The Microsoft store The Microsoft store has a young, friendly and helpful staff wearing bright colored t-shirts. It looked like the staff outnumbered the customers at 4pm on a 112℉ Monday afternoon.

Most of the customers appeared to be high school age, many of them playing games or web-surfing. I spoke with a staffer who'd been with store since it opened and asked about how the store had changed. He said there were a couple of areas.

For one, they'd reduced the staff from a peak of 100 to about 40, with most of the 60 transferring to the 2 new stores. Further, they'd shifted their focus from soccer-moms to small business.

He pointed out a table that had an HP dual-screen knowledge-worker configuration in the corner. It reminded me of my home office system.

The store has an answer bar and a training area in back. Normally the store does hourly intro sessions, but business was slow and they weren't running. I didn't see anyone approach the answer bar in the 20 minutes or so I was there.

A guy from Microsoft corporate was there, taking pictures. Wonder who sees the pictures?

The Apple store Apple was busier than Microsoft despite the surrounding empty storefronts. The age range was broader - a young crowd but fewer high schoolers and more parents and business people.

The Genius Bar was serving 1 or 2 people while I was there and the Studio Bar had a small crowd. Customers moved among the display tables, picking up iPads and checking out Macs.

It wasn't crowded - check out the video - but there was a steady stream of activity and people coming and going.

The Storage Bits take Microsoft isn't rolling out new stores as fast as Apple did, but why should they? Back in 2001 Apple's retail presence was pathetic.

You'd find a couple of dusty Macs in a corner with a few grubby apps. Ask a simple question like "can I use a different keyboard?" and clueless sales people would likely give you the wrong answer and steer you to Wintel. Apple had no choice but to take control of their retail presence.

Microsoft thinks they have a different problem: amping their cool factor. Remember last year's ads on how much cheaper Wintel is than Mac? They started making Wintel cool again with their cinema verite style and hip actors.

Microsoft's retail stores flow from the same impulse: make Microsoft cool. But that isn't Microsoft's big problem. The problem: Wintel merchandising hasn't changed in 15 years.

Compared to Apple's classy stores and market-leading service, the average Best Buy, Staples or computer store looks like a discount auto parts store: rows of stuff on shelves and very little help. Each shopper is expected to be their own integrator. Throw in uneven services, impenetrable warranties - "don't call us, call anyone else" - and a confusing array of choices and it is no surprise that most folks buy on size and price.

But Microsoft doesn't control their retail strategy. Their OEMs do. If they want to compete with Apple's retail stores they have to encourage their OEMs and their retail partners to up their game.

Its another spin on Apple's integrated approach vs. Microsoft's reseller approach. When Apple shipped the iPad, all their stores had the same product, displays, messages and trained sales people within a week.

When Microsoft ships Windows Mobile 7, their resellers will take it and sell it however they like. Microsoft will attempt to position the product through costly advertising, but when you go to your local phone store WM7 will be jumbled in with everything else.

Bottom line: Microsoft's stores aren't going to make Microsoft cool. Microsoft has to get its entire retail channel to make Microsoft cool. They could open 500 stores next year and it wouldn't matter.

With their immense profits and huge market share, Microsoft can afford to wait for Apple to make some mistakes - which they've already started to do. And all Apple has to do is keep pumping out hits, year after year, to a fickle consumer market.

Ask Sony how that's worked for them.

Comments welcome, of course.