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MSFT Puts Big Retail Store Push on Backburner

By - Source: BusinessInsider | B 15 comments

Steve Ballmer has reportedly put Microsoft’s plans for a large chain of brick and mortar stores on ice.

Microsoft started opening retail stores in North America in 2009 and the company is believed to have had enthusiastic plans to match the number of Apple retail outlets. However, it seems CEO Steve Ballmer has been convinced to put plans to match or surpass Apple’s 300 stores on hold. 



Business Insider reports that, while Ballmer and Microsoft COO Kevin Turner are both eager to push ahead with plans to build more stores, Redmond is having a hard time making money from them because the merchandise sold in-store is also available at tons of other retailers around the country. This is something many people, including our own readers, highlighted as a possible issue when reports of the first ‘Microsoft Store’ arose. Why would people feel inclined to buy a peripheral or a copy of Windows from the Microsoft Store when it’s just as easy to go to a store like Best Buy or even order online?

Still, that’s not the only reason Microsoft is putting the brakes on store plans. BI reports that the stores have also proved extremely expensive to build and that this, coupled with the difficulty in setting itself apart from other electronics stores, has helped convince Ballmer that backing off is the right move.

Business Insider sources say if the stores start to turn the corner -- or if Microsoft decides it needs a retail front to sell products like Windows Phone 7, which compete for shelf space in places like the AT&T store -- the company may decide to ramp up the number of Microsoft Stores. For now, though, it doesn’t exactly look good.

Microsoft’s first store opened at Fashion Square Mall in Scottsdale, Arizona in October 2009. Employees made headlines shortly after opening for a choreographed dance routine to the Black Eyed Peas’ hit song “I Got a Feeling.”

Microsoft Employees Get Down

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  • -1 Hide
    Maxor127 , April 9, 2011 6:26 AM
    Not surprised. It was a horrible idea to begin with.
  • -1 Hide
    rmmil978 , April 9, 2011 6:43 AM
    So pointless. I could buy a copy of Windows 7 from the MSFT store...or, buy it from ANY major retailer in the country, or do a digital download from...MICROSOFT!!
  • 1 Hide
    godnodog , April 9, 2011 6:53 AM
    If I was at the shop when they started that I would just leave...
  • 3 Hide
    godnodog , April 9, 2011 6:54 AM
    I just gave my self a -1,. in my previous comment, lol
  • -1 Hide
    Ragnar-Kon , April 9, 2011 7:37 AM
    Alright so Microsoft is a software company, with the exception of the XBox 360, the Windows 7 Phone, and the Zune. BUT, seems to me the Zune will be phased out and its software will be implemented in Windows 7 phone updates.

    So this leaves us with the XBox 360 and Windows 7 Phone. Most people purchase their phones through their phone carriers, so now all we have left is the XBox 360.

    So... lets open an entire store to sell the XBox 360? Yeah, not seeing the point.
    I mean, I guess they sell boxes of their software, but software is moving away from "go to the store, buy the disk, and install" and heading toward the "download and install" method. So again, sounds pointless.
  • -2 Hide
    Benihana , April 9, 2011 8:01 AM
    Keep going MS, you gotta match Apple in sheer number of stores. Who cares that you have nothing of interest to showcase IN the store that people don't already have or see daily, just keep cranking them stores out!

    Might as well as open a store around Pee-Wee Herman. That'd get more hits than the MS store...

    @godnodog: Haha! I love that you -1 your own comment, so I +1 your second comment. :) 
  • 0 Hide
    LuckyDucky7 , April 9, 2011 9:23 AM
    Though 300 stores is a bit unrealistic, the stores still need to exist for the next 40 years or so at which point there will be no point since everyone in North America will know how to use a computer anyways.

    The only real boxed product that seems to be sold in Microsoft stores is, well, Windows and Office- both of which you can get online. Any other developer tool that you would buy there is also downloadable.

    The real attraction is, really, to buy a computer.
    All needed software? Already installed.
    All crapware? Removed.
    All stickers and other traces of OEMitis? Removed.
    Would I suggest to someone to buy a computer from there for a 25 to 50 dollar premium over the same computer in Best Buy?
    Of course I would- if I couldn't do that work right away.

    Also, classes on "How to use a computer 101" are the second main attraction. Office use? Covered. How to perform basic maintenance tasks? Covered. How to not screw up your computer? Covered.


    Xbox 360's? Unless you're selling games I see no point in getting one from a Microsoft Store vs. a gaming store where you can pick up games (you know, the things you play on an Xbox 360?) right away.

    Microsoft Surfaces are apparently pretty cool but unless you have some for sale, well...

    The issue is that the youth market is lost.

    For smart people, it's Windows, and these people don't need the store since they already know how to use a computer to buy things online and know how to fix one when it 'breaks'. These people have also been around computers enough to know how to get tasks done and don't need a tech to ask questions.

    For hip people, it's Apple. These people don't care to know how to use a computer and need a tech to whine to when the machine breaks/see something they don't want to learn to use.
    That, incidentally, is why Apple makes a killing on margins since the hip user can make do with the crappiest machine possible in terms of hardware specifications as long as it looks good- it never appears slow to the user since the user never does any real work on one anyways: and Office applications aren't slow anyways.

    The issue, though, is that those who don't know how to use a computer and physically cannot learn how need this help. And they've been around long enough to know that Apple isn't financially smart for them. So, Windows is it- and they need the services that the Microsoft store provides. They need a crap-free computer that runs perfectly with everything they need, and they also need to know who to ask when they need help when it breaks.
  • 0 Hide
    Anonymous , April 9, 2011 12:17 PM
    Hard to believe that C-Level people can be so stupid. Stock-holders find that these knuckle heads are worth the hundreds of millions they pull from companies every year????
  • 0 Hide
    zelog , April 9, 2011 12:25 PM
    rmmil978So pointless. I could buy a copy of Windows 7 from the MSFT store...or, buy it from ANY major retailer in the country, or do a digital download from...MICROSOFT!!


    It's not like the article didn't state exactly this already

    Ragnar-KonMicrosoft is a software company, with the exception of the XBox 360, the Windows 7 Phone, and the Zune./citation]

    ... and mice... and keyboards... and joysticks... and microsoft surface... and extra controllers... and kinect... and webcams... and notebook accessories... and Microsoft Games. But other than those minor things, you're absolutely right; They have nothing they could possibly sell in a store.
  • 1 Hide
    gruntlord6 , April 9, 2011 3:22 PM
    zelogIt's not like the article didn't state exactly this already
    Ragnar-KonMicrosoft is a software company, with the exception of the XBox 360, the Windows 7 Phone, and the Zune./citation]... and mice... and keyboards... and joysticks... and microsoft surface... and extra controllers... and kinect... and webcams... and notebook accessories... and Microsoft Games. But other than those minor things, you're absolutely right; They have nothing they could possibly sell in a store.

    and computers running windows.
  • 0 Hide
    11796pcs , April 9, 2011 4:12 PM
    I agree with LuckyDucky7- the Microsoft Stores could definately help computer illiterates understand how to use their computers better. The idea of a Microsoft Store is "cool" but not practical due to the low number of products Microsoft sells for the average user that cold be found elsewhere. I would love to have one of those stores in my area but most people would just go to Best Buy.
  • 0 Hide
    tonydu , April 9, 2011 7:44 PM
    I wonder what Microsoft asked in exchange from Apple? Perhaps that is why Steve is abandoning Flash -- so that Microsoft can try to make Silverlight a serious development platform.

    I was at Oracle when we abandoned the preloaded Linux hardware in exchange for Microsoft abandoning their plans to move SQLServer into the enterprise space. And I was at SCO in the early days when we abandoned our new office suite in exchange for Microsoft abandoning network support and multiuser support in their OS. So I've learned that these things are usually done to split up a market -- so that the companies can keep charging premium prices without any real competition in their segment.
  • 0 Hide
    falchard , April 10, 2011 2:55 AM
    The Business Insiders are idiots. Microsoft does not need its own chain of stores, they already have shelf space in many retail outlets. A Microsoft store actually ruins their integrity with these partners and the openess of their platform.
  • 0 Hide
    cookoy , April 10, 2011 3:25 PM
    MS doesn't need their own stores. they will just be competing with their retail customers. the video makes my head aches. did they use Windows Phone 7 to capture the video? sure the employees are saying, "I Got A Feeling this store won't last long so let's just enjoy the moment."
  • 0 Hide
    pwrntspd , April 11, 2011 6:49 AM
    Ive actually visited the store in Mission Viejo, CA and i found it to be kinda nice. I got to see and test a bunch of laptops that you normally would have to buy online without even getting to touch them. Plus they carried brands like MSI, Lenovo, and ASUS, as well as a variety of hardcore gaming laptops. It was just nice to see that i could actually test hardware before buying something relying only on what other people had to say about it.