Long time tech giant Microsoft ($NASDAQ:MSFT) is eliminating all but four of their traditional Microsoft Stores, it officially announced today. The company's "new approach to retail" talks about the logistics of closing down hundreds of stores, doesn't get into the specifics of reallocating all of those employees yet, but does hint at its strategy going forward: "With significant growth through its digital storefronts, including Microsoft.com, and stores on Xbox and Windows, the company will continue to invest in digital innovation across software and hardware."
The Microsoft Stores as you knew them are gone. Get ready for Microsoft Experience Centers! Experience Centers do not sell products, so they aren't stores. If you're left scratching your head, so are we; maybe they'll be temples to the brand, where you can pray to Bill Gates, who knows.
A mixture of things led to this drastic decision; retail stores are increasingly becoming irrelevant and outdated, COVID-19 makes it almost impossible for non-essential stores to stay open and thrive, digital distribution is overwhelmingly the option most customers prefer, and cutting retail jobs saves a ton of money. This decision is shocking because of the timing (there's a big console launch Microsoft is leveraging their gaming division on later this year, might be smart to have an Apple Store competitor to promote your new technology releases). But it isn't surprising, given the above reasons.
One might rightfully ask why Microsoft decided to cut so much fat this week, on top of the demise of Mixer earlier in the week. All we can do is look at the fallout and think how Microsoft is going to piss away almost a million Twitter followers.
Apple is having a similar problem with its stores (temporarily) closing, but isn't giving up on retail entirely like Microsoft is. Below are all the domestic stores out of business, besides one in New York City and one on the Microsoft campus in Redmond, Washington. You can scroll over to Australia, but again, that Microsoft Store is closing and will become an Experience Center. Where hopefully experiences can be had, whatever that means.
Microsoft Corporate Vice President David Porter laid it all out, so here's a de facto obituary for Microsoft Stores: “Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location. We are grateful to our Microsoft Store customers and we look forward to continuing to serve them online and with our retail sales team at Microsoft corporate locations.”
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