Microsoft Takes A Giant Leap Into Retail
February 13, 2009 11 Comments
Microsoft has been contemplating a new frontier…
Over the past couple of years, Microsoft has recognized that it needs to take a more active role in the retailing of it’s products. It can no longer leave in-person merchandising and selling to retailers. What’s driving the urgency in Redmond to get into stores?
Apple has radically changed the paradigm for retailing in technology. Rather than relying on retailers to deliver in-person experiences, Apple stores have revolutionized both the sales model and the service model for technology retailing.
That’s why it’s no surprise that Microsoft just hired a former Walmart executive to open a chain of retail stores. This effort will report into Kevin Turner, Microsoft’s COO (and a former Walmart executive) who says the aim is to
Transform the PC and Microsoft buying experience at retail by improving the articulation and demonstration of the Microsoft innovation and value proposition so that it’s clear, simple and straightforward for consumers everywhere.
This follows Microsoft’s recent unveiling of its huge Retail Experience Center in Redmond. I actually visted the center last year while doing some work with Microsoft on its retail strategy; it’s quite impressive.
My take: The technology market is maturing. Mainstream consumers are now the largest market; not techies. There’s a broad base of customers who want to buy technology products (PCs, phones, MP3 players, TVs, etc) who don’t understand anything about the underlying technology. So the listing of speeds-and-feeds (along with other technical specs) is an outdated retail marketing approach.
Unfortunately, retailers have not kept up with this shift. If you look at the 25 retailers that we ranked in Forrester’s Customer Experience Index, three of the bottom four were electronics retailers (Best Buy, Circuit City, and Radio Shack). This might also explain why stores like Circuit City and Tweeter are going bankrupt. So manufacturers like Sony, Apple, and now Microsoft are taking a lead in finding the right approach.
Here’s some of the things that mainstream technology users need:
- Plain language about feature benefits to enable trade-offs (why should I care about 60 HZ or 120 HZ when buying an LCD TV?)
- Products that are easy to setup and provide very simple interfaces for making common configuration changes
- Easy-to-use decision making tools for narrowing potential products
- Human advice (through trained employees and social media forums) for making product decisions
- Access to help for setup, repair, and usage questions
The bottom line: The electronics retail experience is overdue for a makeover