Bill Gates still wants to be Steve Jobs — even though Steve is dead.
How else can we explain why Chairman Bill (or rather, his trusty sidekick and CEO, Steve Ballmer) is opening a new Microsoft (NASDAQ:MSFT) store today in Valley Fair, the same Silicon Valley mall as one of the earliest Apple (NASDAQ:AAPL) stores — the store where the media go to take photos of people lining up to buy an iPhone.
Today’s opening marks the 12th Microsoft store. (With a decade-long head start, Apple now has more than 300.) In 2009, Microsoft bragged it would open up retail stores “right next to Apple,” and 6 miles away from Apple HQ certainly counts.
However, Microsoft is bribing people (or rather celebrities) to generate traffic at both ends of the age spectrum. On Thursday, the QB of the first decent 49er team, 55-year-old Joe Montana, is making a 5pm appearance. On Friday, the 30-something duo The Black Keys is performing a free concert (free to customers, not to Microsoft) while on Saturday one of the teen heartthrob Jonas Brothers is doing the same.
I don’t see the point, but then I’ve never seen a Microsoft store and (other than an office suite) I haven’t used their products for a decade. However, after visiting the LA store, Greg Sandoval of CNET wrote:
Offering techies a stage to show off power points isn't a bad way to get people in the store.
Still, Microsoft has a long way to go before challenging Apple. Not only does Apple dominate in the number of stores, but some doubt whether Microsoft possesses Apple's sense of style or can create the same first-class shopping experience—even with all the mimicking. There's also this: consumers shop at Apple because for decades now they have loved Apple products.
Microsoft hasn't been anywhere near so successful at duplicating that kind of customer loyalty.
Some “experts” claim we should want our kids to emulate Bill and not Steve. I think Steve did a better job of understanding — and more importantly, anticipating — what excited people, while Bill produced credible incremental improvements funded by monopoly rents. Now Bill is semi-retired to count his money and (ala Carnegie and Rockefeller) burnish his reputation for posterity.
Apple sans Steve Jobs will eventually lose that élan. That’s little consolation to shareholders of Microsoft, who’ve watched Steve Ballmer (charitably) lead the company sideways since taking over as CEO.
The retail strategy that worked for Steve Jobs is not going to work for Steve Ballmer. Apple store’s worked because (as Elaine Misonzhnik put it ) “The stores are experiential rather than simply a machine for moving goods.”
Sony (NYSE:SNE) failed at retail stores because its products failed to excite people. With the important exception of Kinect, Microsoft has also failed to excite people as customers slowly defect from its platform to the Mac, tablets, Android, the iPhone and other non-Windows platforms. Among the 4Ps, Microsoft needs to focus on product, not place.
Disclosure: Long EMC, EMR and INTC,