It’s Good for Microsoft, but Are New Windows Stores a Smart Bet for Best Buy?
When Microsoft and Best Buy this week announced the forthcoming launch of 600 Windows Stores within its retail locations, much of the initial analysis centered around what this means for Microsoft’s retail strategy. As fellow AllThingsD editor John Paczkowski explained, the partnership for Microsoft “is a savvy move — an easy way to dramatically increase its retail footprint via an established big-box player.”
But what about Best Buy, the retail giant looking hard for a turnaround, as it tries to fend off Amazon and other online-only electronics sellers?
First, from a financial point of view, it seems to be a no-brainer.
“If you offer a retailer some money, they typically will take it,” Stephen Baker, vice president of industry analysis at The NPD Group, said in an interview.
The two companies did not release any financial details of the deal, but it’s a safe bet that Microsoft is spending handsomely to help redesign Best Buy’s PC departments into Windows Stores and train 1,200 Best Buy employees to man the new outlets.
Second, the appearance of the new stores appears to be fresher, a bit of an upgrade from the current Best Buy experience. The devices sold within them might be the same, but new wrapping won’t hurt.
Third, adding Microsoft to a roster of mini-stores that already includes Apple and Samsung may push other consumer electronics manufacturers to pursue a similar deal with Best Buy. A brand like Sony, for example, has the breadth of devices that could make sense for a mini-store, Baker told me.
Fourth, it’s a vote of confidence — albeit from a company with its own issues — that brick-and-mortar retail still matters. If you want to take a customer away from a competitor, you do it in the real, physical world.
With these moves, Best Buy is starting to look a little bit more like a tech mall within a store — a setup not uncommon overseas in cases where retailers essentially lease out part of the store to a manufacturer. The difference here, according to Baker, is that Best Buy is still maintaining most of the control, such as deciding how their floors are stocked, making it less likely that the new arrangements will hurt the Best Buy brand.
Will the branded stores within Best Buy alone lead to that massive turnaround? Of course not. As it is, we already know the company has work to do when it comes to its digital presence.
But the new look of the mini-stores — the Windows Store being the most recent example — brings some necessary excitement to a company desperately in need of some. And that certainly counts for something.