Microsoft to open flagship store in NYC

The Microsoft Store plans to take a bite out of the Big Apple with a flagship store set to open on Manhattan’s Fifth Avenue sometime next year.

The store will be located at 677 Fifth Avenue, south of Apple’s flagship at 767. Microsoft’s move into New York has been part of the company’s plan ever since it opened its first retail store in Scottsdale, AZ in 2009, according to a post by David Porter, corporate vice president, worldwide retail stores for Microsoft, on the company’s official blog,

"Our Fifth Avenue location will be much more than just a Microsoft Store. In addition to retail, there will be experiential space for Microsoft as a company to further engage with our customers and partners in new and innovative ways," wrote Mr. Porter. "This is an important milestone for Microsoft overall, our stores team and millions of our current customers, as well as the millions to come. We could not be more excited to join one of the most visited streets in America."

Today, Microsoft has 104 retail stores in the U.S., Canada and Puerto Rico. It plans to open an additional 10 locations in the U.S. and Canada before this year’s holiday season. The company has also made a big push with its store-within-a-store concept at some 600 Best Buy locations.

Microsoft Store

Microsoft’s retail operation, as several reports have pointed out, is seen by CEO Satya Nadella as a supporting venture and not part of the company’s core business. The decision to expand its retail footprint with a high-priced Manhattan location appears to be a positive sign for the business, particularly in light of the strategic downsizing that has taken place followng Mr. Nadella’s appointment to his current post back in February.

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Discussion Questions

How do you expect New Yorkers and tourists to take to a Microsoft Store on Fifth Avenue? Is the pace of new Microsoft Store openings an encouraging sign for the business going forward?

Poll

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Max Goldberg
Max Goldberg
9 years ago

I think the New York Microsoft store is a curiosity, something to be compared to the Apple store. The problem is that Microsoft, with the exception of Xbox, does not have products that people want. Its phones have flopped, and its million dollar deal with the NFL for Surface has had little impact, as TV announcers call them iPads.

Frank Riso
Frank Riso
9 years ago

The location near the Apple store is a good idea, but if they wanted more tourists, they should have looked at Times Square. New Yorkers are the ones who shop Fifth Avenue but many more tourists visit the Times Square area. Many retailers are in Times Square and use the location to create an awareness of the brand and most likely make little or no profit there. I do hope they do well but arriving late to the game means they have to do a lot more work to get the tourists into the store.

Alexander Rink
Alexander Rink
9 years ago

As a brand, Microsoft just does not generate the same excitement as Apple. A lot of that has to do with all the baggage we associate with the Microsoft brand from buggy operating systems and feature-bloated applications. I think they would be better off focusing their stores on their products that have generated more excitement, such as Xbox and Kinect. We keep saying that one of the biggest draws for shoppers is the experience; well, consider the experience of going in to buy traditional Microsoft products vs. a store that is specifically focused on, let’s say, its gaming environment and products.

When I pass by Apple stores, they are almost always very crowded. Microsoft stores? Crickets. I don’t see how rolling out more stores makes much economic sense until they figure out the formula to get more buzz and shoppers into their stores.

Ryan Mathews
Ryan Mathews
9 years ago

As always, we’ll have to see what they REALLY do with the space. If, in the end, it’s just another store front—good luck.

As to the second question I think the answer is no. Feels a little more desperate than that to me. If the stores were really, truly innovative spaces that were changing and advancing the brand I might feel differently, but they aren’t.

Chris Petersen, PhD
Chris Petersen, PhD
9 years ago

I think the question for Microsoft is—what is the purpose of the NYC store?

Satya Nadella has been very clear that Microsoft Stores are not a core business, but the stores are a key part of supporting Microsoft’s “cloud and connected” strategy.

If the NYC store is in fact a flagship for Microsoft to introduce its technology and tell its connected story, then I would agree with Frank Riso that Times Square would be a much better location to reach consumers shopping from around the world.

But perhaps the ultimate question is whether Best Buy and other key tech retailers can sell the Microsoft connected story to consumers. If Best Buy can not sell the Microsoft OS across devices beyond computers, then Microsoft has a much bigger dilemma than where to locate an NYC store.

Gajendra Ratnavel
Gajendra Ratnavel
9 years ago

I was walking through Yorkdale mall yesterday. This is one of the, if not the busiest mall in Canada. It has an Apple Store as well as a Microsoft Store fairly close to each other.

It is not hard to see Microsoft is not yet caught up to the level of customer service or attractiveness that the Apple Store has. What is clearly evident is the amount of money Microsoft has put into their stores. I would guess easily two to three times what Apple has just on digital signs.

Just throwing money at the problem doesn’t seem to work here.

What is also interesting is Tesla’s store there. Very well run, incredible customer service, layout, etc.

Steve Montgomery
Steve Montgomery
9 years ago

The natural and immediate comparison will be between the Apple and Microsoft flagship stores. This is a comparison I expect will find the Microsoft Store coming up short.

Why? Because many of Microsoft’s hardware devices have not had the same success as comparable products from Apple. The good news is that the Microsoft store is likely to be carrying products from various PC manufacturers.

Camille P. Schuster, Ph.D.
Camille P. Schuster, Ph.D.
9 years ago

A one-time visit will be on the list of many people. Whether there is a second visit depends upon what consumers find in the store. I am not sure the rate of store openings says anything about Microsoft’s business except that they want or need the exposure.

Paula Rosenblum
Paula Rosenblum
9 years ago

I agree with Frank Riso 150 percent. When I first read the release I thought “Why there? They should be in Times Square.” In fact I assumed it was until I read more carefully.

Wrong move for wide appeal.

Lee Kent
Lee Kent
9 years ago

I have several friends who work for Microsoft so I hope what I have to say does not offend any of them. You see, Microsoft to me is a business platform. Their success has been in their ability to own the business market. (I don’t know their % of market) and that in itself is a pretty good feat!

With that said, IMHO, Microsoft is not a tourist attraction. It is a business attraction. Reminds us of work, not fun. Their foray into mobile phones, tablets, again, is more about the software and not the device. Nothing jazzy enough in that to get the tourists attention.

So, for my 2 cents, this was not a smart move.

Craig Sundstrom
Craig Sundstrom
9 years ago

I think the most common phrase you’ll hear in this store will be “one block north,” as in a response to the question, “Isn’t this the Apple Store?”

I have to go along with pretty much everyone else here in that the only thing this shows is Microsoft (still) has a lot of money and can spend it freely on things that “(are) not part of the company’s core business.” MS sells hardware? Really, who knew? But more importantly, does anyone care? We’ll have a chance to find out.

Cathy Hotka
Cathy Hotka
9 years ago

Microsoft did have a Times Square location a few years ago when the Surface first came out. I can only guess that its closing meant that it didn’t have the anticipated impact.

Tom Redd
Tom Redd
9 years ago

All will depend on how Microsoft leverages the location as a stage. Lots of stars and popular people hang in NYC and using them as an attraction will do wonders. Many retailers use their stores as stages for promotion, awareness and brand strengtheners. Apple does this too. Their stores support their retail power engine — their online store.

Good work Microsoft. I will visit — just as I visited the Scottsdale store.

Karen S. Herman
Karen S. Herman
9 years ago

I consider Microsoft the “quiet giant” of tech and their marketing team has an agility and cunning that is impressive. I’ve watched the Microsoft Pop Up Store in my local mall for over a year and consistently been impressed with the ease of access to test products and friendly, knowledgeable sales staff.

Microsoft was smart to explore the retail space with Pop Up Stores in New York City, too, and the time is right for a flagship retail store, not surprisingly, located down the street from the Apple Store.

I’m betting this flagship store’s experiential space, where customers can engage in new and experiential ways with products, will be the game-changer that sets it apart from the Apple retail model. So much is happening in technology with AR, VR and gamification that it just makes sense to offer a virtual place to explore and play.

Martin Mehalchin
Martin Mehalchin
9 years ago

This is a long overdue move. The brand value of a NY flagship is immeasurable, plus all the tourist traffic could make this location very profitable. I disagree with the other commenters who are advocating Times Square. 5th Ave gets plenty of tourist traffic, especially the blocks close to Rockefeller Center. Times Square gets even more traffic but it has a downmarket feel and reputation that would have been a bad fit for the brand as a whole. They should do an XBox specific store experience in Times Square — that would be a perfect demographic fit.

Dave Wendland
Dave Wendland
9 years ago

I’m more bullish than most about this latest entry — and first full retail store — for Microsoft. Therefore, I’m going to withhold my judgment until I see exactly what is in-store to meet their goal of opening their first “experiential space.”

It is apparent to me that Microsoft recognizes the importance of seamlessly bridging the gap between the virtual world and brick-and-mortar. This is an unscripted area that deserves praise rather than ridicule.

Ed Rosenbaum
Ed Rosenbaum
9 years ago

Let’s see what happens after the store is up and running. Having a location near the Apple Store is important from a competitive standpoint. Like others have said, let’s see if this is going to be a business for profit or a curiosity. I am having a problem visualizing it as a curiosity leading to sales later.

Chuck Palmer
Chuck Palmer
9 years ago

Microsoft has an opportunity to send a strong message with this location. New York flagship locations are part and parcel above the rest of the fleet. This store could be the place to elevate and deepen consumer experiences with Microsoft-branded products (phones, tablets) but also leverage their hardware partners and associated properties.

I would love to see Halo tournaments played in a Microsoft store on that great ribbon of digital merchandising.

Their stores always feel like poor interpretations of something else. They should take a cue from Verizon and what they did at Mall of America. Turn the category on its head and leverage things that no competitor can: scale, reach and the shear number of Microsoft operating systems being used each day.

You know, someone is going to want to pay for their purchase with their Apple Watch using Apple Pay.

Kai Clarke
Kai Clarke
9 years ago

This is not a heralding retail effort. Microsoft is not a retailer, it is a manufacturer. Furthermore, Microsoft’s efforts to manufacture hardware have yet to be successful. They are a software supplier, but this is better focused on their partnership efforts, including supporting their retail partners rather than competing with them.