In October of 2006, I wrote a Switched On column entitled "Rebooting Retail in Redmond" in which I noted how much Microsoft's consumer business had changed since the days of the original microsoftSF store in Sony's Metreon. This was a world before Windows XP, before Zune, before rich touch interfaces on Windows Mobile devices, before Media Center, and before the original Xbox. I concluded that column by noting:
Microsoft's consumer lineup today is far more compelling, sophisticated, media-rich and, with a growing group of hardware products, tactile than it was back in the 20th Century. The marketing strategy of Windows Vista -- with its various usage scenarios -- presents a nearly perfect foundation from which to structure showcase environments. The entertainment products that Microsoft wants to bring into the consumer's home would benefit from a home of their own.
That argument will be even more relevant in 2010 as Windows 7 begins to roll out and Microsoft takes its "Life Without Walls" campaign to the next level by highlighting the integration of the desktop, the mobile phone and the Web. We are already seeing a sneak peek at this via the MyPhone service that Microsoft is rolling out for Windows Mobile.
Microsoft stores will be in a unique position versus nearly every other physical direct technology channel. For while Microsoft certainly has its own consumer products such as Zune, Xbox 360, keyboards, mice and boxed copies of Windows and other software, a key charge of these establishments will be to highlight the promise of the digital lifestyle as powered by Microsoft in products produced by its partners or developers..
On one hand, that provides an excellent opportunity to bring the company's long-cherished emphasis on choice to the people and, as Apple has done with its stores, to help third parties that complement its message. One example is highlighting cutting-edge PC designs – notebooks ranging from the ultra-thin to ultra-powerful and beastly gaming rigs that would tax their overclocked processors with the rage of being placed next to some bland budget box at a big box store.
On the other hand, education can go only so far in overcoming legitimate consumer preference. For all its prowess and control, Apple has not been able to use the stores to transform Apple TV to something that has been embraced in the way the iPod has. Microsoft will surely face the same challenges with third-party Windows Media Extenders. What Microsoft can do, though, is expose consumers to how well its own Xbox 360 – which might be bought primarily for other reasons – functions as a Media Extender.
Finally, while almost all of the comparison that we will see around the Microsoft stores in terms of competition will be centered around Apple, but Microsoft is far more concerned about another competitor: Google. Microsoft stores will also provide an opportunity to showcase the capabiilities of Windows Live.
If Microsoft is really planning to drive messaging around "three screens plus the the Web" in 2010, this is a deeply challenging message for most retailers where those screens are scattered in different sections of the store. Convincing consumers that Microsoft's broad reach finally provides a practical approach to tying together their digital needs is the greatest opportunity for Microsoft's return to retailing.
Ross Rubin is director of industry analysis for consumer technology at market research and analysis firm The NPD Group. Views expressed in Switched On are his own