Microsoft's retail store chain flounders in stark contrast to busy Apple Stores

Posted:
in Genius Bar edited October 2015
Nearly six years have passed since Microsoft began opening retail outlets patterned after Apple's blockbuster retail locations. However, the now 116 Microsoft Stores are still a pale imitation to Apple's own retail network of 460 locations, often featuring more employees than customers as the firm's products have failed to excite and attract buyers.


Microsoft Store, Chicago


Microsoft opened its first retail chain outlets about 8 years and six months after Apple introduced its first stores. Back in 2001, the first Apple Store retail outlets were met with predictions of doom, largely due to the ongoing failure of retail stores run by PC makers ranging from Palm to Sony to Gateway.

However, the first Apple Stores achieved profitability almost immediately, and subsequently played a major role in helping to launch new products ranging from iPods to iPhone and iPad over the next decade.

Microsoft hoped to emulate Apple's success with stores featuring virtually identical layouts, display furniture and features such as its own version of the "Apple Store Genius Bar," but has never really attracted the same kind of excitement.

In part, Microsoft Stores have been hobbled by the fact that they initially served as a place to buy other maker's Windows PCs, products that can in many cases be obtained for cheaper elsewhere. Microsoft has also failed to introduce new products of its own to drive retail sales, instead releasing a series of duds including the Zune, Windows Phone and Windows 7 and 8.

Even efforts to pay customers to bring in their used iPads and MacBook Airs an exchange for a Microsoft hybrid product have fallen flat.

The San Francisco Microsoft Store is located in a high traffic mall near Apple's own flagship Union Square store just across Market Street, but while the Apple Store is usually always packed with shoppers and customers seeking assistance with their products, Microsoft's store typically has only a few shoppers at a time, and a significant proportion seem to only be there to play on a display Xbox.

That was the case even over the holiday season last year, when San Francisco's Microsoft Store remained largely empty alongside equally dismal popup retail locations for Samsung Galaxy products and Amazon's beleaguered Fire lineup.

Apple vs Microsoft retail in Portland, Oregon

A similarly stark contrast can be observed in Portland, Oregon, where Apple recently moved its store from its original location inside an indoor mall downtown to an adjacent spot on the street, at the crossroads of two light rail lines and a block from the popular Pioneer Square.







The new Portland Apple Store, similar to locations in Stanford, California, Omotesando, Japan and Aix-en-Provence, France, features a dramatic glass wrap-around wall suspended below a minimalist ceiling, which itself is covered by a green roof of plants. The large Pioneer Square store appears to be packed at all times, with virtually no unused space at any of the series of display tables most of the time.





Portland, Oregon Apple Store


Just a block away, a Microsoft Store under the adjacent parking garage was built shortly before Apple's new store was finished, but it sits virtually empty, with more employees than customers. Similar looking tables sit vacant and nobody was even playing on the Xbox.





Portland, Oregon Microsoft Store


The operational costs of leaving Microsoft Stores open must be enormous, but the company doesn't detail its retail operations in its financial reports, preferring instead to lump the retain chain into its "Device & Consumer Other" category that also includes everything from its video game studios to Bing search and display advertising to consumer Office software sales and online software sales.

After 13 years of reporting its retail operations in detail, Apple announced a shift for fiscal 2015 (which began the last calendar quarter of 2014) that moved retail sales from its stores into geographical segments instead.

At the time, the company explained that "management believes collaboration across its online, Retail and indirect channels is integral to better serve its customers and optimize its financial results," adding, "The Company's reportable operating segments will consist of the Americas, Europe, Greater China, Japan and Rest of Asia Pacific operations, and the Retail segment will no longer be classified as a separate reportable segment."

This will serve to obscure the results of operational changes made under Apple's new head retail executive Angela Ahrendts, while offering less operational information to its retail competitors, most of whom--like Microsoft--already refuse to disclose any information about how much they are spending to keep their stores open.

In parallel, Apple also stated last year that it wouldn't be breaking out revenue, profit and unit sales for segments including Apple Watch and iPods, and Apple Pay, which will be included in "Services" alongside iTunes, software and other services.
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Comments

  • Reply 1 of 108
    Same thing at the mall near where I live -- there's an Apple store and a Microsoft store. I always make a point to walk past the Microsoft store to see if there is any real traffic in there. Never more than maybe 5 customers in there and they're outnumbered by the employees. I don't even know how they break even on the retail space in this mall, as it's very expensive in that mall. OTOH, the Apple store is always packed -- weekdays or weekends, doesn't matter.
  • Reply 2 of 108
    mrshowmrshow Posts: 151member
    Hope they don't work on commission. haha
  • Reply 3 of 108
    chris_cachris_ca Posts: 2,543member
    Wait, what?
    They aren't doing so well?
    Who’d a thunk, eh?
  • Reply 4 of 108
    calicali Posts: 3,495member
    Hey there's someone in there!

    Oh that's just a tumbleweed...
  • Reply 5 of 108
    freediverxfreediverx Posts: 1,407member
    I can always guess the author just from the story titles...
  • Reply 6 of 108
    kpluckkpluck Posts: 500member

    If you want to buy Apple stuff there are relatively few places ago. The stuff Microsoft sells in its store are available everywhere. There simply isn't a need for them to have stores like there is for Apple.

     

    -kpluck

  • Reply 7 of 108
    The one in Bellevue is always full but that's probably due to Microsoft having offices within a block of the mall and Redmond only five minutes away....
  • Reply 8 of 108
    If I ever want to feel sad, all I have to do is look at a picture of a Microsoft store.
  • Reply 9 of 108
    cornchipcornchip Posts: 1,290member

    I don't get it. Microsoft is a software company. The enormous majority of their products can be downloaded. For them, opening retail stores never made sense to me.

  • Reply 10 of 108
    bobschlobbobschlob Posts: 1,074member

    This almost seems cruel.  <img class=" src="http://forums-files.appleinsider.com/images/smilies//lol.gif" />

  • Reply 11 of 108

    I stopped by once to ask about the difference between Office 2013, Office Online, and Office 365; some question like that. They wanted to pay me $15 to take a survey but I declined.

  • Reply 12 of 108
    kpluck wrote: »
    If you want to buy Apple stuff there are relatively few places ago. The stuff Microsoft sells in its store are available everywhere. There simply isn't a need for them to have stores like there is for Apple.

    I believe it's just as easy to buy Apple stuff, even in my city with no Apple-owned store. We have two Apple-cetric stores (3rd-party-owned) and a Best Buy store. Also, I can buy on-line at MacMall and others... This isn't the previous century any more.

    I think the Apple stores are crowded because people just LOVE the experience of going there... It's like a chocolate factory for adults.
  • Reply 13 of 108
    markbyrnmarkbyrn Posts: 608member
    Just you wait - the new Surface slabs will bring in the M$Sheep by the truckload. I know this because the supposedly agnostic tech press is just slobbering over the latest MS offerings and calling them Macbook killers.
  • Reply 14 of 108
    quadra 610quadra 610 Posts: 6,743member

    If their retail stores are floundering, and these stores are full of Microsoft devices (Surface, Windows Phone, etc.), what in the name of all that is holy does that say about demand for these devices? The very places where they are being SHOWCASED, there to try, are virtually DEAD.

  • Reply 15 of 108
    bdkennedy1bdkennedy1 Posts: 1,459member
    See that Surface poster in the window? There's nothing sexy about that fatty.
  • Reply 16 of 108
    It's so nice to see "beleaguered" used with other companies than Apple. Anybody who remembers the late 90s will know what I'm talking about.
  • Reply 17 of 108
    testudines wrote: »
    I stopped by once to ask about the difference between Office 2013, Office Online, and Office 365; some question like that. They wanted to pay me $15 to take a survey but I declined.

    Microsoft wanted to find out what was so wrong with your brain that you'd come into one of their stores... Normal people just don't Do that!
    brakken
  • Reply 18 of 108
    dewmedewme Posts: 2,025member

    Those Microsoft Store employees sure look lonely. Maybe we should bring them some donuts and let them play with our iPads to cheer them up. 

    brakken
  • Reply 19 of 108
    "...instead releasing a series of duds including the Zune, Windows Phone and Windows 7 and 8."

    Zune predated Windows store by several years. Calling Windows 7 and 8 as duds makes OSX really sux.

    I have no doubt Apple stores are much busier than most Microsoft stores. But, for the author to behave as a prevaricator is not necessary to make a point. It only devalues the articles overall credibility.
  • Reply 20 of 108
    robin huberrobin huber Posts: 3,253member
    freediverx wrote: »
    I can always guess the author just from the story titles...

    Oh, is it gratuitously dump on Dilger time again so soon? I completely lost track of time!
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