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Microsoft Pri0

Welcome to Microsoft Pri0: That's Microspeak for top priority, and that's the news and observations you'll find here from Seattle Times technology reporter Matt Day.

June 13, 2013 at 9:06 AM

Microsoft launching 600 stores within Best Buy and Future Shop [updated]


Microsoft and Best Buy have formed a partnership to open hundreds of Windows Stores within Best Buy locations. (Photo from MIcrosoft)

Microsoft last fall launched a vastly redesigned operating system with Windows 8, which the company hoped would launch it boldly into the mobile-devices arena.

The problem was many users found Windows 8 confusing. And the devices Windows 8 was designed to work best on —- touch machines or hybrid/convertible tablet-laptops — either weren’t available or added to the confusion about which one to to purchase.

Best Buy, meanwhile, is facing its own struggles in an increasingly competitive consumer-electronics market, with everyone from Walmart to biting off big chunks of that market.

A solution that both companies hope may address those woes: Teaming up to open 600 Windows Stores within Best Buy and Future Shop stores in the U.S. and Canada.

These stores-within-stores will include a range of Microsoft devices and products, including Windows tablets and PCs, Windows Phones, Office, Xbox and more.

The products will include Microsoft’s own branded Surface tablets, as well as those from Lenovo, Dell, Asus, Samsung and Nokia.

Ranging from 1,500 square feet to 2,200 square feet, these Windows Stores will essentially become “the computer department inside Best Buy,” said Chris Capossela, Microsoft’s chief marketing officer.

About 1,200 Best Buy employees, who will be trained by Microsoft, will staff the Windows Stores, which are scheduled to open beginning in late June and running through September.

Additionally, some elements of the Windows Store — such as having an “innovation table” that highlights the newest and best Windows technologies or a table devoted to Microsoft’s Surface tablets — will be rolled out to an additional 800 Best Buy stores.

Both Best Buy and Microsoft declined to disclose the terms of the partnership.

“We’re both coming to the table in a major way,” Capossela said.

The announcement comes as Microsoft is in the midst of transitioning from a traditional software company to one that offers devices and services.

As part of that transition, the company is emphasizing the notion that it produces a “family of devices” with a range of software services — including Office 365, Xbox Live and Skype — that work across those products.

The Windows Stores within Best Buy, then, won’t necessarily increase Microsoft’s retail presence, since many of the same machines have been sold at Best Buy even before the Windows Stores open.

Rather, they’re more about organizing and presenting the Windows-based PCs, tablets and smartphones in a more coherent fashion, letting customers get hands-on experiences with them, and trying to clarify any customer confusion.

“For us, as we transform Microsoft into a company that builds a family of devices within integrated services, we really wanted to reinvent not just the products. We also wanted to reinvent the way consumers interact with those products while they’re shopping,” Capossela said.

The Windows Stores will be distinct from Microsoft’s stand-alone retail stores, which are called Microsoft Stores.

There currently are 68 Microsoft Stores. That includes the larger Microsoft Retail Stores (including ones in University Village and Bellevue Square), as well as the small Microsoft Specialty Stores, which are essentially kiosks within malls.

Microsoft is still committed to growing the numbers of those stores, Capossela said.

The Microsoft Retail Stores are averaging sales of about $1,500 per square foot, estimated Jeff Green, a Phoenix-based retail real estate analyst. That’s much higher than the sales of $500 per square foot experienced by the average mall tenant, but lower than the $6,200 per square foot for Apple Stores, Green estimated.

Mini-Apple Stores have existed for several years now within Best Buy. And, in April, Samsung had announced that it would be opening its own Samsung Experience Shops within all 1,400 Best Buys this summer.

The Windows Store partnership with Microsoft is a continuation of a strategy to partner with vendors to “reinvigorate the customer experience,” said Best Buy spokesman Jon Sandler.

The Windows Stores will be larger than the Samsung and Apple mini-stores. The Samsung shops, for example, are about 460 square feet, Sandler said.

Green called the partnership “a plus for both sides,” though, he wondered: “Who needs the other more.”

“For Best Buy, it brings in another strong name to associate it with at a time when they’re struggling in terms of what size their store should be, what they sell, and how they compete in a very competitive electronics market,” Green said.

For Microsoft, he added, the partnership is a way to more clearly push its brand and story at “1,400 points of distribution.”

Here’s a video from Microsoft about the Windows Stores:


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