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Microsoft Retail Stores Meant to Clarify Brand

Microsoft Corp. isn’t out to undermine its existing channel and retail partners with its just-announced plan to create branded standalone retail stores. Rather, the idea is to clarify Microsoft’s brand image in the marketplace and better understand how to connect products with users.

“We have plenty of distribution. These stores for us are about building our connection to customers, about building our brand presence and about reaching out and understanding what works and what improves the selling experience,” Robbie Bach, head of the Microsoft’s entertainment and devices division, told the Seattle Times.

And no wonder: despite “store-within-a-store” initiatives with Best Buy and the creation of a team of experts to act as a kind of personal technology shopper for potential customers, the behemoth from Redmond has had trouble explaining its place in the market.

Part of that might be thanks to the complexity of its product line. New unified communications agreements with Nortel Networks, plenty of talk about cloud computing, the ill-fated Vista and the unfortunate Seinfeld-Gates commercials: all have served to elevate Microsoft into Joe Public’s consciousness beyond just being the company that provides one’s word processing and Internet browsing software. However—it hasn’t been done with any sort of clarity. Perhaps Microsoft’s biggest success in connecting with the public would be the big advertising push for Windows centered around the catch phrase “I’m a PC” – the latest iteration being the commercial with the adorable 4-year-old e-mailing a digital picture of her pet fish. The ads, however, have done nothing to explain what Microsoft specifically can offer users in today’s Web application-centric, multimedia world, where the lines between business and home life are blurring.

And to that point, Microsoft is also worried about shoring up profits thanks to an ongoing move away from traditional PCs and a trend toward sub-$500 netbooks and devices like the iPhone, as mobile data use and cloud services are becoming increasingly mainstream. Microsoft is still seen largely as a desktop software provider.

And so, the idea is “to create deeper engagement with consumers and continue to learn firsthand about what they want and how they buy,” Microsoft said in a statement.

The branded retail stores will be small in number at first, launching in a select number of cities worldwide, and will sell Microsoft software and hardware, including the Xbox 360. It’s unclear whether it will sell partner products and PCs as well.

David Porter, who spent 25 years at Wal-Mart, will head up the effort. He is leaving his job in charge of product distribution for DreamWorks Animation to take the position.


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