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NEWSFACTOR BUSINESS REPORT - Microsoft, Finding Success, To Add More Retail Stores

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Microsoft, Finding Success, To Add More Retail Stores

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  By Jennifer LeClaire
  December 26, 2012

Microsoft has plenty of customer resonance through Xbox, Surface and its software, said retail analytics executive Greg Petro. New Microsoft stores may be a challenge to Best Buy, especially if Microsoft can offer the type of experience Apple does. "Microsoft has always been the brand. But you see great brands opening retail stores now," Petro said.

They may not be as crowded as the Apple store, but Microsoft  is reporting its company retail stores are finding success with customers. So much so, in fact, that Microsoft is following up a "momentous year" with plans to open new stores in 2013.

In the face of skeptics, Microsoft opened 51 new full-line and specialty stores during the last year. And not just in the U.S., either. Microsoft opened stores in the Canadian cities of Edmonton, Burnaby, Vancouver and Toronto in just the last year.

"We know our customers' shopping needs greatly differ, whether it's a teen who wants the hottest video game or a parent who wants to ensure their family is safe online," said Jonathan Adashek, general manager of communications and strategy for the Sales and Marketing Services Group at Microsoft.

Six New Stores Planned

Adashek wrote in a Microsoft blog post that store associates work hard to personalize every customer 's experience in making recommendations, and helping with PC setups and other services, so customers can walk out the door with a product that's ready to run. This is a similar strategy to the Apple store, and it appears to be paying off for Microsoft.

Microsoft plans to open six new retail store locations in early 2013: The Shops at La Cantera, San Antonio, Texas; Dadeland Mall, Miami, Fla.; Beachwood Place, Beachwood, Ohio; Westfield San Francisco Centre, San Francisco; City Creek Center, Salt Lake City; St. Louis Galleria, St. Louis.

Microsoft is also extending a majority of its specialty store locations into the New Year and even transitioning some of those specialty stores into permanent, full-line stores based on their popularity with consumers.

Should Best Buy Be Worried?

Greg Petro, CEO of retail analytics provider First Insight, said when a brand like Microsoft has strength and influence with consumers, it makes sense for the company to control the entire value chain and the customer experience in the store.

"That's just what Apple did. Apple had a great brand and a lot of resonance with the customer base so they took that brand and brought it all the way to the consumer through the in-store channel," Petro told us. "They were selling previously through other channels and continue to do it to some degree through Walmart and Target and Best Buy."

Petro said Microsoft has plenty of customer resonance through Xbox, Surface and its software products. As he sees it, that may be a challenge to the likes of Best Buy, especially if Microsoft can offer the type of experience Apple does at the store level.

"Microsoft has always been the brand. But you see great brands opening retail stores now," Petro said. "There are a lot of interesting pieces to what I would call the high-tech and software world coming to the consumer and shortening the distance between the consumer and the brand experience."