The company will “reimagine” four of its existing stores, specifically ones in London, New York City, Sydney, and its Redmond campus, but those won’t necessarily be retail outlets.
Microsoft is pulling the plug on its retail store experience. After launching its first physical store more than 10 years ago, the company is permanently closing all its physical retail outlets across the world, except for four that will be “reimagined” as new spaces, David Porter, corporate VP for Microsoft Store, said in a LinkedIn post on Friday.
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“As part of our business plan, we announced a strategic change in our retail operations, including closing Microsoft Store physical locations,” Porter said. “Our retail team members will continue to serve customers working from Microsoft corporate facilities or remotely and we will continue to develop our diverse team in support of the overall company mission and objectives.”
In announcing the decision, Porter said that Microsoft’s hardware and software sales have been shifting online, while its lineup has evolved to digital products, including Microsoft 365 as well as content for gaming and entertainment. Porter touted growth in traffic to Microsoft.com and the company’s digital Xbox and Windows storefronts that see as many as 1.2 billion monthly customers across 190 markets.
Further, the coronavirus lockdown seemed to show Microsoft that it could provide sales and technical support to buyers and customers without maintaining a physical presence. The company’s shift to a remote workforce due to COVID-19 still allowed it to support individuals and organizations.
“Our retail sales team helped small businesses and education customers digitally transform; virtually trained hundreds of thousands of enterprise, government and education customers on remote work and learning software; and helped customers through support calls,” Porter said. “The team supported communities hosting more than 14,000 online workshops and summer camps and helped more than 3,000 schools and 1.5 million students celebrate virtual graduations.”
In line with the store closures, Microsoft employees will offer sales, training, and support from their corporate offices as well as remotely, Porter said. The company also aims to enhance its digital storefronts where people can buy products, receive training, and get technical support. One new service slated for these online storefronts will be 1:1 video sales support.
The four stores in London, New York City, Sydney, and the Redmond campus will be reimagined as new spaces, according to Porter. But there was no indication that these would still be used as retail outlets. Microsoft also plans to co-locate engineering, sales, support, envisioning centers, executive briefing centers, and retail spots to maximize available space.
Borrowing a page from Apple, Microsoft opened its first retail store in the US in October 2009 to sync with the launch of Windows 7. Over the years, the number of US stores climbed to 72 locations across 31 states. Expanding beyond the United States, Microsoft kicked off stores in Australia, Canada, Puerto Rico, and England, for a total of 82 worldwide.
The Microsoft store was an attempt to sell products and services, offer support and training, and provide customers with a more personal one-on-one approach. But unlike Apple, Microsoft failed to squeeze much success or profitability out of its retail store experience. One factor lies in a core difference between the two companies.
Apple designs and sells its own hardware and software, mostly for individual consumers who can enjoy and benefit from an in-store experience. Microsoft is a more nebulous company that creates and sells software to run on devices from other vendors, while its direct target audience consists of enterprise customers less likely to venture to a store for sales or support.
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Editor’s note: This story and headline have been updated to clarify that the remaining four stores won’t necessarily be retail centers.