Microsoft Needs Amazing Stores to Compete With Apple, Itself

Last Updated Jul 29, 2009 3:00 PM EDT

Microsoft is coming closer to its much-anticipated retail launch, which is touted as a direct assault on Apple's highly successful retail stores. But the software giant faces a formidable challenge -- to woo customers away from Apple Stores its roll out must be super impressive, and it needs to convince PC consumers that they can purchase products at the Microsoft stores that they can't find at a better price someplace else, like Best Buy or the discount chains.

Microsoft's first new stores will open this fall in Misson Viejo, Calif., and Scottsdale, Ariz. As promised by Microsoft Chief Operating Officer Kevin Turner, the Mission Viejo location is entering a mall that already has an Apple store, the Simon Property Group-owned Shops at Mission Viejo.

Microsoft's new store design leaked onto the Web earlier this month when tech site Gizmodo posted some images. Stephen Baker, a retail analyst for the NPD Group interviewed in Computerworld, said that the design is a bit overwhelming: "Microsoft is trying to incorporate all of the areas that they have a play in, and create an ambiance, but I miss where it all ties together. It's a little too techie."

If Microsoft really wants to compete with Apple, the stores should pop. The Apple stores are known for innovative architecture and striking designs that lure in shoppers. Apple is also very good at making the stores interactive, giving customers access to its products by allowing them to try out laptops and other devices before buying. And don't forget the Genius Bar, an area of the Apple stores where customers can get their hardware and software problems solved.

While we still don't know much about Microsoft's new stores or its overall expansion plans, the company did make a good move earlier this summer when it hired George Blankenship, Apple's former real estate director. And the director of Microsoft's retail ambitions is David Porter, a former Wal-Mart executive. The software maker also has the right personnel in place to execute effective store location and expansion.

But maybe even more problematic for Microsoft isn't competition from Apple, but competition from itself. Microsoft products are sold everywhere, unlike the situation Apple faced when it started its retail push early this decade. As this Mac Observer columnist points out: "The vast majority of the company's business comes from Windows and Office, and having its own retail locations won't help peddle those products."

Of course there is talk that Microsoft is using the spaces more to showcase its products rather than become a major retail sales force, and a spokesperson is often quoted in articles lately saying that the main goal is for the company to get a direct physical point of contact with customers. That's fine, but if shoppers don't have a reason to show up and spend, we're not likely to see Microsoft shelling out the cash to occupy high-profile retail locations with hefty rents for very long.