Microsoft taking a small bite out of Apple stores
Julio Ojeda-Zapata/St. Paul Pioneer Press
Looking to modernize the Richfield grade school where she works, and flush with a cash for a major technology purchase, Tonicia Abdur-Salaam went in search of classroom computers at the Mall of America not long ago.
First she stopped in the Apple retail store there, but found that “they weren’t very friendly,” she said. “They weren’t very responsive in terms of forming a relationship. Relationships go a long way.”
Then she went into the Microsoft store directly across from the Apple store, and “I just hit it off” with Microsoft staffers, she added. “They were so respectful and so excited to have the opportunity to work with me.”
Such stories are rarely heard amid the hype about Apple’s popular products, hipster image and its hugely lucrative retail stores.
Microsoft’s outlets were widely ridiculed as Apple-store copycats and over-the-top tech circuses when they emerged in 2009. To a degree, they still are the butts of jokes.
One problems was that Microsoft was always seen as a software company, so unlike Apple, it was not known for products one can touch and play with.
Microsoft’s Mall of America store, which opened in November 2010, took an unusual amount of heat because of its high visibility — and proximity to Apple.
Top tech blogger Mike Elgan foresaw doom for that store. “I predict that the Microsoft Store will fail spectacularly,” he wrote.
Yet, two years later, the Mall of America’s store and its 26 U.S. brethren show no sign of going
away. Four more stores are scheduled to open in the next month, including one in San Juan, Puerto Rico, and another in Toronto.
Microsoft opened its first store in Scottsdale, Ariz., in October 2009. Apple’s retail effort dates to 2001, when it opened its first stores in McLean, Va., and Glendale, Calif. It now has about 400 stores, dwarfing the Microsoft effort.
To better compete, Microsoft is opening 34 temporary or “pop-up” stores across the country through the holidays — partly to hype new products such as the Surface tablet and the Windows 8 operating system, released late last week, along with its Windows Phone 8, due later this year.
Microsoft does not disclose financial information about its retail chain, so it is unclear whether it is making money. But the tech giant has a history of sticking with cash-bleeding projects until they hit the big time. Its Xbox 360 console, now the leading such device, is an example.
The stores are earning the grudging respect of longtime tech observers.
“They’re focused on doing what made Apple stores successful: showing you the best products,” said Stephen Baker, the vice president of industry analysis at the Port Washington, N.Y.-based NPD Group.
And, “clearly, they are doing well,” Baker said. “We have no independent numbers, but I believe Microsoft has been clear that this is not a toy or a marketing vehicle. They want these to be real stores, to be profitable and stand on their own.”
Microsoft is “trying to deliver an experience,” said Tim Nelson, president of the Chicago-based Tris3ct advertising agency, which has retail-industry clientele. “Microsoft, as a brand, has long needed to be an experience. Retail is a way to do that.”
He compares a Microsoft store to an Apple outlet, which “is not a store — it is a temple for true believers who want to immerse themselves in a brand they believe in.”
In this sense, Microsoft still has work to do, Nelson added.
He remembers visiting a Southern California Apple store, which “was packed.” Walking around the corner, he found a Microsoft outlet that was nearly empty — and this was at the height of a holiday shopping season.
At the Mall of America, the Genius Bar tech-assistance section in the Apple store has grown so popular that the company has had to institute an advance-registration system, and to position a worker in front of the counter to check in visitors, from morning to evening.
Those needing help at the Microsoft store’s answer desk can often walk up for immediate attention.
Retail analyst Jeff Green believes Microsoft stores have logged sales of $1,500 per square foot on average per year. But the head of Phoenix-based Jeff Green Partners compares that to his Apple-stores estimate of $6,000 per square foot per year.
About 15 million people have visited Microsoft stores, according to Ted Ladd, communications director for the company.
This has been a boon for the company’s “brand favorability” among consumers, he said.
After all, much more than Apple, Microsoft’s products are ubiquitous among technology users. Even Apple die-hards have to interact with Microsoft in some form in their daily lives.
As a brand, Microsoft tends to be seen favorably by about 79 percent of folks surveyed, which Ladd said is not too shabby. But the favorability rating spikes to 97 percent among those who have visited one of the retail stores, he added.
A QUESTION OF SERVICE
Abdur-Salaam of Richfield’s Partnership Academy K-5 charter school recently bought more than two dozen desktop PCs for the computer lab, along with a laptop for every staff member — and the store threw in several Xbox 360 consoles for free.
Afterward, a store staffer helped set up the computers and gave other forms of technical assistance. That was “phenomenal,” Abdur-Salaam said, “just phenomenal.”
Melissa Flores-Fiorvanti of CLUES, a metro provider of behavioral health and human services, recently invested in Windows-based tablets so therapists could consult electronic records more easily while moving from patient to patient in-house or at schools.
Flores-Fiorvanti, CLUES’ senior director of behavioral health, took this step after having bought her own device at the Microsoft store and coming away impressed with the service she received.
What’s more, the store dipped into its fund for community organizations to sweeten the CLUES deal, donating keyboards and mice to use with the PC-like tablets, Flores-Fiorvanti said.
She said the store’s staff listened carefully to give her what she needed, was “communicative during the whole process,” and gave postpurchase, on-site technical assistance at no extra charge.
“We’ve learned that you can’t underestimate friendly service, a white-glove experience,” said Microsoft’s Ladd.
What’s more, Ladd said, “we have deeply embedded ourselves in the communities” where the stores are based. They even turn over their back-of-the-store theaters to community groups, such as Girl Scout troops, to use for activities having nothing to do with Microsoft products or store sales, he noted.
Microsoft’s stores are having a coming-out phase of sorts in coming weeks with the release of the much-ballyhooed Surface tablet. It is a direct competitor to Apple’s hugely popular, recently upgraded iPads — including the brand-new iPad mini.
Microsoft’s permanent and pop-up stores, and its online store, are the only ones selling the Surface, in fact. The Surface, along with the Xbox 360, is a rare instance of Microsoft making, marketing and selling its own hardware, which is Apple’s approach.
And the stores underwent their biggest-ever reorganization last week to properly show off the tablet, along with other touch-based computers running the new, colorful Windows 8 software. Virtually every computer on display in Microsoft stores this holiday season and thereafter will have a touch screen, Ladd said.
Other big changes for the holidays include tables along the walls for staffers to configure any just-purchased PC, and to ease the owners into the unfamiliar world of Windows 8.
As for the Mall of America store’s competitor across the way, Ladd will say only, “It’s good to have competitors in this space. Competition makes us better.”