Aug. 9, 2012 at 1:28 PM ET
(Updated 5:15 ET)
Microsoft reportedly is expanding its retail footprint in advance of its big reveal of Windows 8. Analysts say it’s a smart move even as some question whether the company can generate enough buzz to make Windows a viable alternative to the iOS-Android duopoly in the mobile device market.
“They’ve got to give consumers a reason to go out there and upgrade,” said Israel Hernandez, senior analyst and managing director at MKM Partners LLC.
Tech media site The Vergereported that job ads seems to indicate that the company plans to open a dozen pop-up stores in major markets — including some where it doesn’t already have a retail presence, like New York City and San Francisco — as showcases for items like its flagship Surface tablet and new smartphones. Previously, Microsoft announced it will sell the Surface only through its own brick-and-mortar and online stores, so 12 more stores — albeit temporary ones — will give the company a boost during the crucial holiday shopping season.
A Microsoft representative confirmed via email that the company does plan to open pop-up stores for the holiday season, but did not confirm the number or locations of stores.
Pop-up stores are an effective retail strategy because they create an "urgency to buy," said Nancy Liu, a retail strategist at consulting firm Kurt Salmon.
The limited distribution of the Surface might seem to put a drag on Microsoft’s ability to grab mobile market share right out of the gate, but scarcity can be an effective tool to generate interest and demand, she said. "Microsoft's choice to sell it dirctly in their own stores is creating this exclusivity... because you can’t get it anywhere else."
"They’re trying to create some buzz... I think they’ve got a lot of work to do in terms of convincing consumers." Hernandez said. However, he added, "If they build that momentum, it can sustain itself."
Branded stores will let Microsoft show show that Windows 8 is a multitasking platform capable of connecting a user’s media, gaming and social activities across a slate of devices, said Yun Kim, an analyst at ThinkEquity LLC.
“Because Microsoft is [leaning] so much on its OEM partners, the overall consumer expereince they try to deliver to the market has been lost,” he said. “I think consumers today, if they think of Microsoft, they think of Windows and Office.”
In its own stores, Microsoft can control both users' experience and that branding message. If these resonate with consumers — a big "if," analysts acknowledge — its retail presence will help it better compete with Apple. Liu said the pop-up stores will be a good place for the company to try out new layouts, services or designs.
The success of Apple’s retail empire shows that letting people play with new tech toys is an effective sales tactic. Liu said Microsoft should take a page from Apple’s playbook and augment the tactile experience with services like tech help or mobile checkout.
"Not selling through others is a problem only if you have too much inventory you need to sell," Sucharita Mulpuru, an analyst at Forrester Research, said via email. "Otherwise, it's a great way to generate demand and excitement."