The power of the Apple Store

Seems as though Apple's Regent Street store in London has transformed what was a relatively boring shopping corridor – I remember lots of Scottish tweed and humdrum cashmere – and turned it into one of the most sought after commercial streets in the UK. It's also the most profitable retailer in London.

Similar news came in some time ago that the NY Fifth Avenue location was it's most profitable location and is probably the highest grossing retailer, pretty astonishing considering the company it keeps – Tiffany, Gucci, Calvin Klein etc. Over 38 million people visited the store last year.

It's so funny to see these figures because when they first opened their stores, so many people crapped all over the idea. 'Waste of money,' they said. 'No tech company has ever built a successful retail presence,' they said. Ironically, I am sure it has been the Mac loyal that has helped build this franchise – reinforcing the importance of brand loyalty.

For a long time, I grew frustrated at the Apple experience. Shoddy stores, poor displays, über geek helpers who were more interested in besting your knowledge than actually helping you. Now the Apple experience is one of the best retail experiences there is. So much so that Microsoft is ripping it off, which basically says all that needs to be said about Microsoft.

The Microsoft next door

So Microsoft is opening their own branded stores. In many cases, the stores will be opened in close proximity to the incredibly successful Apple Stores.

On the face of it, it's smart. Microsoft has not shied away from going after Apple from a price standpoint and I applaud them for being aggressive.

However the problem that Microsoft has may not be solved by sticking their products in a snazzy casing. Let's face it. It's a Windows World. The majority of computers sold today contain Microsoft technology. One could argue that Microsoft has stores on every corner since retailers big and small sell Microsoft products. It's not for lack of exposure that the Microsoft brand is in trouble. It's lack of trust – Microsoft products are robust but also seen as complicated and insecure. A retail presence doesn't negate the user's experience at home or in the office.

Before Apple Stores were created, Macintosh products were often sold in dirty dingy strip mall stores that had limited appeal. It was a horrible customer experience and a far cry from picking up a tower or a laptop at the nearest CompUSA, where there was a broad selection of both software and hardware. It must have annoyed Apple to have so much work go into the product/industrial design only to have it marginalized in retail.

Personally the only way that I think the Microsoft stores will be successful is if they take on the role of product support. It's no secret that the Apple Stores are now the primary touchpoint between the user and technical support. Being able to take your device in and talk to someone about your problem goes a long way to improving customer satisfaction, an issue in the tech space.

If Microsoft is willing to shoulder the responsibility of tech support, then I think it will be a successful endeavor. But if the sole purpose is to show up Apple and turn the Microsoft store into a product museum, then I wonder what the difference is between a Microsoft store and the beautiful but essentially useless Nokia store in Chicago.

What is the consumer problem that they are solving? I can think of several but I'm not sure they will be solved by a storefront. Time will tell.

Online retailing is a drop in the bucket of US retailing

You know, for all the hype about online sales and how important it is, this number really reminded me that it's easy to live in a reality distortion field. Almost everyone I know shops online but apparently this activity is not universal. Just over 3% of total retail sales in the US are made online. 

It does make sense to me though. When I talk to consumers, I'm still surprised by how many people refuse to shop online, usually because of security fears.

Of course this data is in aggregate and is skewed by categories like white goods and automotive. And some categories are far more ecommerce focused than others. It's still a humbling number, though.