John C. Dvorak: On Morgues and Microsoft Stores

aNewDomain.net — I’d been putting it off, but as a proponent of computer retailing, I had to visit a Microsoft Store and see what was right and wrong.

This was triggered by a friend of mine telling me that the new store in Corte Madera, CA was like a morgue.

So I went. I went to check out the morgue.

First of all, there were a lack of customers and a lack of excitement. There were two customers and I was one of them. I counted eight employees.

The place was overstaffed. So if you were interested in anything, you’d get plenty of attention.

I thought the store was tasteful and slick and represented the company well.

So what was the problem?

Well, first of all, the Microsoft Store has the exact same vibe as a Verizon or any of the dull phone stores found in any mall around the country.

And indeed the front of the store looked like a phone store — with a bunch of Nokia phones running Windows Phone OS. These things were tethered and the tether was so short that as I picked one up to look at it closer it quickly came to the end of its rope and flew out of my hands landing hard on the counter.

All the best-selling Nokia 1020 phones were there but only available with a contract through AT&T. I thought that was going to be a deal killer for many.

How about selling an unlocked phone for people who are not idiots?

The next thing you’d see at the store were a lot of Surface tablets. On one side were some non-MSFT-branded laptops all with touch screens running Windows 8. This included the stunning Sony Vaio Pro 13.

Over to the side there was a big Samsung touch screen monitor that was quite nice with some sort of low-smudge coating.

The good news is you never felt creeped-out by being the only customer in the store and I think that was due to the large and chatty staff contingent. It was almost identical to an Apple store with some variation. There was a mini theater in the back for demos or something.

I did grill the one guy who welcomed me. He told me that people mostly come in to look at the Nokia 1020 and the Surface tablets. He, and the rest of the team, were all very pleasant and courteous without being annoying.

Photo: John C. Dvorak for aNewDomain.net

What was wrong with the store was the phone store character because of the emphasis on the phone. It was boring. If there were some large virtual displays of the phone screen playing Angry Birds or some such thing it would have been better.

All the large displays were way in the back (you can see them in the photo) where the Xbox and the Kinect were found. This display of these products needs to be re-examined. I felt no compunction to even fiddle with any of these products, which were awkwardly displayed.

The Xbox and Kinect should have been up in the front where they could excite the customer. They were de-emphasized in a very peculiar manner as if they were the company embarrassment.

In fact these are the only products where Microsoft has an edge over Apple. But Microsoft has become so stuffy that it would rather be associated with a phone store than an exciting E3 booth.

Nobody wants to hang out in a phone store.

One of the first rules of marketing is over-promoting the most-exciting and hottest products. Milk them good.

Those hot products are chosen by the public not wishful thinking. Microsoft has never understood this and this store exemplifies the problem.

When the public rejects a Microsoft product, the company thinks it did a poor job of selling and redoubles its efforts. Ballmer recently said that as far as he is concerned the Microsoft phone is something with huge upside potential. The company just needs to spend more money.

The Kinect is the hot item insofar as public perception is concerned. Why is it buried in the back while the lackluster phones, which are distinct failures in the market, are up front and emphasized? This is like Bentley dealerships spending all their efforts trying to sell used Borgwards.

Microsoft’s naïve “If it is not selling, let’s spend more money on it” approach permeates the firm which just tells me the company is clueless if not nuts.

I would also point the finger at the guy who heads up the entire retail operation. While he seems like a pleasant-enough fellow on his LinkedIn page, was he the best retail guy Microsoft could find? And did Microsoft even try to poach Ron Johnson from Apple who went over to JCPenny’s shortly thereafter? Johnson had plenty of chops spearheading the Target branding initiatives after coming out of Mervyns.

It wasn’t a stretch to hire him at Apple. It would not be a stretch to poach him. David Porter was the Microsoft choice. Before being picked to run the Microsoft retail operations, he was running product distribution for DreamWorks Animation. Really? How does this make him a start-up expert to roll out Microsoft retail?

Before that he did indeed work in retail heading up the home entertainment department at Wal-Mart as the GMM (General Marketing Manager) for 23 years!

I just do not get the connection between his resume and what Microsoft thinks it is doing in retail.

Porter was smart enough to study the Apple stores and clone them to some extent, but these stores are depressing by comparison. I’m more and more reminded of the Henry’s Hamburger chain which is now defunct as such.

Henry’s was a clone of McDonalds that was always found near a McDonalds. While in High School, I went to one that was in San Jose during the era when downtown San Jose was one of the target strips for car cruising.

The products were identical to McDonalds with few and inconsequential variations. But there was something a little off that you could not put your finger on. Like, for example, they never had any customers to speak of.

These empty storefronts might do as well as any empty phone store does by gouging the clientele. But I do not believe that is the idea.

The company is now advertising for people to work on the retail side for a roll-out of more stores in China. They’d better liven up the stores here first.

Read this Wiki on the history …

For aNewDomain.net, I’m John C. Dvorak.

John  C. Dvorak is co-founder with Gina Smith and Jerry Pournelle of aNewDomain.net. An award-winning commentator, he  discusses these sorts of issues with Adam Curry on the No Agenda Show. Check it out at www.noagendashow.com , and follow John @theRealDvorak. He writes Tech Stock Corner for aNewDomain.