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Microsoft’s stores and the value of customer feedback

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by John C. Dvorak, 06 Dec 2012Features
Microsoft’s stores and the value of customer feedback

Over in the States, Microsoft cannot open retail stores fast enough and it recently dawned on me that these stores can provide immediate feedback from customers in ways that a focus group cannot.

If you go into a Microsoft Store and walk out empty-handed, that tells you something.

Microsoft discovered some of this with its first foray into retail, its old pre-Apple store in the Metreon building in San Francisco. It was generally empty, with few sales, if any. It was just selling boxed Microsoft products and various over-priced peripherals.

It must have been a huge shock to Microsoft when Apple began opening stores left, right and centre. The executives in Redmond must have looked at their own experience and also thought of the Gateway stores and laughed to themselves. But by hiring some of the best retail consultants around, Apple put together an astonishing chain of outlets that has the highest retail sales per square foot in the world.

So, Microsoft took another crack at it using the Apple method. Now it can go one step further and use the stores as both a test marketing operation and a research vehicle. By giving visitors a small discount coupon or some trinket, it could pull aside potential customers and ask them questions about the store, the products, and the experience. Apple, of course, could do the same thing, but why bother? Could Apple be doing any better?

This comes to mind because of the situation with Nokia. I was quite off with my predictions about the future of Nokia and its relationship with the Windows Phone OS. I was convinced that the company would just do lip-service testing and once it saw that the OS was not about to set the world on fire, it would wisely switch to Android and be on its merry way.

Well, no one foresaw that Nokia would tie its future to an unproven phone OS from Microsoft and that when it did poorly, it would double down and kill its own company out of sheer stubbornness. But that's exactly what is happening. This week, we found out that Nokia is selling off its own headquarters. That is how bad it is for the company.

This may not have happened if Microsoft had already opened enough stores to test market the Windows Phone OS early on. Would you buy one? Why? Why not? For all Microsoft knows, the start-up colours of the tiles could be offensive to everyone.

Surveys and focus groups do tell us something. They show that people have opinions, and that they lie in focus groups and on surveys. They say one thing and do another. The only true indication is where the real money is spent. If nobody is buying, it's hard to pretend they are.

The Microsoft Stores will save Microsoft from obvious doom. Right now, the Xbox is apparently selling like hotcakes there. Well, the company did something right. Congrats. This coming week, I'll be visiting and analysing one of the stores (finally!) and I shall report back what I find. Stay tuned.

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