Microsoft’s “New Approach” to Retail

Which means *quitting* retail and taking a ~$500M write-down

Todd Haselton for CNBC:

Microsoft on Friday announced it will permanently close its 83 Microsoft Store retail locations. It will instead focus on its online store at Microsoft.com, where customers can go for support, sales, training and more.

I’ve long poked fun at Microsoft’s retail stores, mainly because I’ve seen a dozen or so of them over the past decade and they’re always ghost towns. So you’d think I shouldn’t be surprised by this move, yet I am because it just sort of feels like given what Microsoft is focused on these days, they should have their own stores.

In the early days, these stores made little sense. The company was trying to say they weren’t competing with their OEM partners with products like the Surface — and then would open stores to compete with their OEM partners. Time has seemingly healed those wounds a bit and the Surface line seems to be doing well. And Microsoft has expanded into other hardware lines, like headphones. And, of course, Xbox remains a focus with a new generation coming later this year.

But perhaps it speaks to the flop that was Windows Phone. Clearly, much of Apple’s success with their own stores is from the iPhone (and the iPod before it), and Microsoft has nothing comparable to offer. They can attempt to copy both the look and feel of Apple Stores all they want — as well as the locations! — but if they don’t have this truly massive product to bring people in, they seemingly won’t come. Or, at the very least, won’t buy anything. To quote someone, “The design is not just what it looks like and feels like. The design is how it works.”