Microsoft plunges deeper into retail with flagship New York store

26 Oct 2015 | Author: | No comments yet »

As Microsoft opens new New York flagship, focus is on its products.

NEW YORK—When you first walk through the large glass doors and into Microsoft’s Fifth Avenue flagship store, which officially opens on Monday, you are immediately inundated with Microsoft products.

Most of the luxury brands on the storefronts of Fifth Avenue in Manhattan, one of the world’s most famous shopping thoroughfares, seem to belong together, like the notes of a song. Instead of the intricate stonework or mirrored glass of the surrounding shops you see giant clear glass panes, currently covered in the bright primary colors of today’s Microsoft; but on Monday, October 26th when the store opens to the public it will be one giant window, showing off everything going on in the store, as well as a giant modern art display they are calling their “Culture Wall”, where they will play “non-commercial digital art”. That’s in the company’s DNA, for sure, but as Microsoft works to distinguish itself from Apple, this design philosophy seems to apply more and more to the things it produces—including its stores.

Then you see the rows of Surface Books and you know you’re inside Microsoft’s first-ever flagship store. “Everyone who works in retail aspires to have a flagship store, especially on Fifth Ave.,” Microsoft Retail COO David McAughan told me as we stood below the store’s 30-foot tall video screen. The decision to build their storefront entirely out of windows, a curious irony as their reliance on Windows wanes, will invariably draw comparison to Apple’s glass cube store just a few blocks away, but it is the difference in approach that is truly interesting.

As we toured the store with Microsoft’s general manager of retail operations, Kelly Soligun, it became obvious that Microsoft is not planning to use their flagship store to primarily move product. Parallel to it in the middle of the floor is a sectiondevoted to “future” products including the new Band 2 fitness tracker and a developer version of Hololens, the company’s futuristic augmented reality headset, which is prominently displayed but sealed in glass. It does not take a detective to see that the foot traffic is often light at the Microsoft stores the company has opened — the Fifth Avenue store will be its 113th — over the last six years.

That could be about to change, though, thanks to a wave of new Microsoft products landing this week, all of them attracting more attention than the company’s holiday lineup has in years. The overall experience is like being in a slick new public library. “For us it’s about sitting down and educating you,” McAughan says. “It’s very similar to test driving a car.

The first two floors are devoted to retail and showcasing consumer products such as phones, PCs and Xbox, while the third is a business focused “experiential center” designed in partnership with Dell. We want to get deep into that conversation of what it’s capable of, why this would work in whatever use you need.” Apple wrote the script for designing retail spaces, especially ones slinging tech products, and there are signs of Apple’s influence throughout the store (and Microsoft’s other stores, as well): the street-facing facade is five stories’ worth of giant glass panes, making the store look like a huge transparent box. The mammoth displays, bright lights and open space creates a futuristic vibe, more showroom-y than a Best Buy — and all part of the company’s plan to showcase its latest products. “We’ve designed this store to be really inviting and very customer-focused. The comparisons to the Apple store are effortless to find, but they all made the Microsoft employees cringe, as it is obvious they are trying very hard to do something new, and where that is most apparent is the Answer Desk itself.

Microsoft said it isn’t locked into any particular store layout. “It was not even a consideration,” said McAughan when I asked about the proximity to their rival and sometime partner. “We were just really intent on finding the right location.” It’s a quest that really started when Microsoft opened its first store five years ago. They say that they are past caring about the user’s platform, but it was clear that they have just moved the definition of platform away from the operating system. The new flagship store is a massive billboard for Microsoft to tell consumers exactly that—as McAughan says, it’s “a physical manifestation of the brand.”

One of them is the Stuart Weitzman store, which is owned by Coach, a coincidence not lost on McAughan, who worked for the Coach brand for seven years before joining Microsoft three years ago. An Xbox set up in the front corner of the store — an area Microsoft calls the living room — lets people play Halo 5: Guardians, the science-fiction shooter game that goes on sale Tuesday. The presentation indicated that the focus would be to showcase Microsoft apps and services, and I would bet good money that their solution to Evernote not syncing between devices is to install OneNote. Big counters allow customers to plop down their devices for tech support sessions. “If you bring your iPhone in here, I’d love to show you how to use Office on it,” said Kelly Soligon, senior director of retail stores marketing at Microsoft. Microsoft’s chief executive, Satya Nadella, is showing more patience with the company’s stores than he has with other unfulfilled initiatives begun under his predecessor, Steven A.

Nadella shut down a Microsoft group that made television shows for people with Xboxes, and he cut the staff working on Microsoft’s phone hardware to a fraction of its former size. And while the stores of wireless carriers are good for putting smartphones in front of the public, category-bending tablets and laptops often require explanations from more-trained specialists. “I think the stores are an important part of interacting with our customers and having them realize the full breadth of what Microsoft brings end-to-end,” Amy Hood, Microsoft’s chief financial officer, said in a phone interview last week. After seeing how much of an open concept they are pushing, from a fully transparent store front to untethered devices and support staff that won’t question where you purchased your device, I wondered how long this will last. The focus on internet connectivity and customer usage seems a recipe for disaster, from the potential of Malware infections to pornography blazing through the store.

However, spending some time with Kelly discussing the future for retail at Microsoft showed how excited they are for their goals, and when questioned about the security issues she dismissed them with “All businesses have shrinkage”. Everything else, from the collection of Windows Phones on the left wall to the laptops from partner manufacturers like Dell, LG, Asus and MSI, are there for people to touch and try out. Much of the second floor is devoted to Xbox gaming experiences and a workshop area where people can take courses on everything from Minecraft, which Microsoft owns, to the Azure enterprise-level cloud computing platform. People can bring in their PCs, whether or not they were purchased in a Microsoft store, and get free tech support — to a point. “Extended services” a store manager told me, could incur a cost.

McAughan said he wants Associates to learn customers’ names. “They may be coming to the store to have some fun — shopping as a form of entertainment… That’s great, we’re happy to do that,” said McAughan. “If you look at many of the other retailers out there, they make the experience about the product.

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