Microsoft Corporation (MSFT) Digs Deeper Into Retail

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Microsoft Corporation (NASDAQ:MSFT) announced this week that it will open five new stores in 2013, in addition to the six it already announced back in December. The new stores allow Microsoft to represent its own products to consumers, but the company has an uphill battle to win over retail customers.

Microsoft Corporation (NASDAQ:MSFT)Microsoft Corporation (NASDAQ:MSFT) has a total of 51 stores (some are pop-up specialty stores), which is about two-thirds of the way to the company’s goal of opening 75 stores by 2014. The company announced the five new stores will open in the following cities by this summer:

  • Natick Mall, Natick, Mass.
  • Ala Moana Center, Honolulu, Hawaii
  • Pioneer Place, Portland, Ore.
  • The Somerset Collection, Troy, Mich.
  • Woodfield Mall, Schaumburg, Ill.

Microsoft significantly trails Apple Inc. (NASDAQ:AAPL)‘s 250 retail stores in America, but that’s to be expected considering Apple opened its first retail store back in 2001. Apple opened up 28 international stores last year and Microsoft Corporation (NASDAQ:MSFT) has only four international stores as of right now, with one more scheduled to open next month. Apple plans to open about 35 stores in 2013, making it even more difficult for Microsoft to catch up.

Just a few days ago, the Surface Pro was introduced at some Microsoft retail stores and customers were able make reservations to purchase the product at the retail locations. The lack of Microsoft Corporation (NASDAQ:MSFT) stores hurt initial sales of the Surface tablet because the product was launched exclusively at the company’s limited retail locations. If Microsoft decides to launch future products in the same way, then the company could definitely benefit from increased store locations.

What’s still to be determined is whether Microsoft will enjoy the same success Apple stores have brought the Cupertino company. Microsoft hasn’t released any information that helps investors know how its stores are doing, so it’s difficult to predict how the new retail locations will help Microsoft Corporation (NASDAQ:MSFT) in the near future.

In a financial analyst meeting back in 2010, Microsoft CEO Steve Ballmer said this about the company’s first steps into retail:

The goal here is not, per se, to sell all the world’s PCs, but we do sell PCs in the store. But much as we engage on the enterprise side, in consulting, in services and support in order to make sure that we can be at the leading edge, we can really get close to our consumer, the customer, the enterprise. We want to do the same thing with the consumer customer with devices. We want to be absolutely sure that you can see the latest and greatest not because we’re going to dig some big profit hole. I don’t believe in that, Kevin doesn’t believe in that, but in a way that may not be the number-one profit driver for the company, but certainly that doesn’t lose money, we have a touch point and a distribution point and a showcase point with consumers.

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