Windows© of Opportunity?
While Best Buy is still the world’s largest consumer electronics chain, it’s no secret that the brand faces big questions about store size, format, and long-term viability in an evolving brick-and-mortar retail landscape. I found the recent announcement that Microsoft and Best Buy had reached an agreement to roll out dedicated Windows “stores” in 600 Best Buy locations across North America this summer to be somewhat surprising, but certainly in line with the needs of both companies.
The plan for each Windows mini-store is to offer a full range of PCs, tablets, accessories and support from Microsoft-trained staff all in a well-defined in-store space of around 1,500 sq. ft. to 2,200 sq. ft. On one hand, this seems like a great move for both Microsoft and Best Buy. Microsoft does not really have that many points of physical distribution (with around 70 existing Microsoft stores) so creating a 600-store network is a pretty big deal. Keep in mind, this comes on the heels of Samsung announcing a similar store-within-a-store deal with Best Buy in April — which would open dedicated Samsung spaces in 1,400 Best Buy locations — and on top of an existing Apple store-within-a-store presence.
What does it mean for Best Buy (and brick-and-mortar retail)?
This raises what I think are some fascinating questions about how this degree of brand-focused segmentation within the store will benefit Best Buy. Financially, it seems like a surefire winner — at least in the near term. That said, this represents a fairly significant shift in strategy (or, at least, a fairly significant expansion of what was formerly an Apple-only domain) and it remains to be seen how this plays with consumers. There’s a good argument to be made that, if it’s executed well, this model could help Best Buy become more experiential and better utilize its large store footprints.
As far as the manufacturers are concerned, using Best Buy as a new channel to interact with their customers has clear benefits. At the very least, it’s a way for brands like Samsung and Microsoft to get into or quickly expand their physical presence without the risk of sizable investment of opening their own stores. If we see a name like Sony pop up next with a similar announcement, it might be a sign that this category competition within the broader consumer electronics experience might be a real trend.
What does it mean for Microsoft?
Essentially, Microsoft is trying to take back some control of their brand, which is particularly difficult with the variety of companies that generate Windows-driven products. Apple/Microsoft comparisons are always lurking, and, with Best Buy splitting their operating system and software offerings between them, the companies may be directly competing for consumers within each store’s physical layout. Apple has traditionally been very succinct in their product and OS offerings, and this move gives Microsoft a retail opportunity to organize their products and services in the same way. The key difference is that while Apple has always had the hardware, Microsoft has always been a software company — so they’ll never maintain as much control of the complete consumer experience.
The Best Buy-Microsoft announcement prompted me to go back and look again at a piece I wrote in October 2009, when I had the opportunity to visit the new Microsoft Retail Store at its opening in the Scottsdale Fashion Square Mall in Scottsdale, Ariz. I wrote about my experiences and impressions afterward, and, while I was largely impressed with the aesthetics and the overall store experience, I was left with a lingering concern that Microsoft was suffering from what I described in the article as a kind of “brand identity crisis.” I wrote about how the walls were “lined with a wide variety of other manufacturers’ products.” including desktop PCs from companies like HP, Dell, Sony and Acer, a large number of laptops and netbooks, and mobile devices from several carriers, including Verizon, AT&T and Sprint. My takeaway from this cacophonous brandscape was this:
“On the surface, everything seemed great. What I could not quite resolve, however, was the nagging feeling that Microsoft’s retail initiative faces an underlying structural obstacle that Apple does not: the challenge of clearly defining the Microsoft brand. With the exception of Windows, so much of Microsoft’s product line is hidden from the customer. Computer chips and operating systems are not as memorable or as compelling as clearly labeled and instantly recognizable gadgets and machines. In contrast to the iconic iPhone and Mac computing products in an Apple store, the Sony, Dell, HP and other brand names presented in the Microsoft store cannot help but water down the physical presence of the Microsoft brand.”
What strikes me today is that the words I wrote almost four years ago still ring true. I’m not sure that Microsoft has solved that underlying structural problem of software versus hardware, but this still may prove to be a useful Band-Aid for both companies.
I’m curious to get your feedback on this one: Will the new Best Buy Windows “stores” solve or improve that brand identity crisis, or is the fact that we now have both Microsoft stand-alone stores and Windows “stores” a sign that the problem persists? Join the conversation by leaving a comment below or feel free to e-mail me at [email protected].
Click here for past columns by Jeff Green.
Kohl’s to keep Milwaukee zoo patrons wild for theater
MENOMONEE FALLS, Wis. — Kohl’s wants to keep its Wild Theater program at the Milwaukee County Zoo alive and well, so it plans continued support through a $1.5 million donation throughout a three-year period to the Zoological Society of Milwaukee County.
Kohl’s Wild Theater program is a live, interactive, participatory theater that uses drama, puppetry and songs to bring conservation messages to children and families. The funding will allow Kohl’s Wild Theater to expand its show repertoire to include a total of 15 unique shows, add new puppets for stage and exhibit performances and make improvements to the stage and theater area at the zoo, including a raised stage floor, shaded stage area and a theater green room for the cast. The donation comes from the Kohl’s Cares cause merchandise program, which sells special merchandise, including plush toys and books, and donates 100% of the net profit to benefit children’s health and education initiatives nationwide.
Recognized as one of the country’s finest zoological attractions, the Milwaukee County Zoo serves more than 1.3 million people each year. Through an initial $1 million donation from Kohl’s Cares in 2010, the Kohl’s Wild Theater program was created and has quickly grown to become the country’s largest zoo theater program. Kohl’s Wild Theater performances are free with admission to all zoo attendees. Performing teams also travel to schools and local community events at no charge.
“Kohl’s is proud to continue our partnership with the Zoological Society of Milwaukee County to bring lessons about conservation, wildlife and natural animal habitats to life for Wisconsin kids,” said Kevin Mansell, Kohl’s chairman, president and CEO. “The Milwaukee County Zoo is a well-known family destination in our hometown community, and at Kohl’s we share their commitment to enriching the lives of area children and families through educational programming like Kohl’s Wild Theater.”
The Kohl’s Wild Theater program consists of two main components. One is Kohl’s Wild Theater, which is located in the children’s area of the zoo and hosts performances focused on conservation and the importance of caring for the animals and the environment. Zoo performances take place during the summer months. The other is a year-round community outreach program wherein Kohl’s Wild Theater performers travel into the community to give 30- to 45-minute performances at various venues, including schools, libraries, community centers and major special events.
“Kohl’s Wild Theater has become one of the best zoo theater programs in the country thanks to Kohl’s tremendous support,” said Dr. Bert Davis, president and CEO of the Zoological Society of Milwaukee County. “We’re thrilled to continue our partnership with Kohl’s and provide quality programming designed to inspire children to care more about conservation and learn ways to help animals.”
Established in 1910, the Zoological Society of Milwaukee County is a private nonprofit organization whose mission is to conserve wildlife and endangered species, educate people about the importance of wildlife and the environment and support the Milwaukee County Zoo. The ZSM has about 54,000 member households and gave $6.6 million in support to the Zoo in 2011-12.
Williams-Sonoma hires former Hallmark exec; announces management changes
San Francisco — Williams-Sonoma has hired David Jimenez, former VP of visual store design and merchandising for Hallmark, as senior VP of visual store and experience. Prior to Hallmark, David worked at national retailers including Gap Inc., Restoration Hardware and Pottery Barn.
“At Williams-Sonoma we are committed to offering unique in-store experiences to our customers,” said Janet Hayes, president of the Williams-Sonoma brand. “David is the right person to drive this focus and will lead us toward new innovation and continued growth for the brand.”
Williams-Sonoma has also shuffled and expanded the roles of three existing VP-level executives. Peter Sassi has been appointed senior VP, stores of the Williams-Sonoma brand. In his new role Sassi will continue to focus on customer relationships and evolving the in-store experience. For the past 10 years, Sassi has served as senior VP, inventory management, for the Williams-Sonoma brand.
Jeff Howie will now serve as the senior VP, inventory management and finance of the Williams-Sonoma brand. Howie brings more than 10 years of experience with the company, most recently as senior VP, inventory management, for the Pottery Barn Kids and PBteen brands. He has managed major company-wide projects, including the launch of the company’s global franchise operations.
John Trifoso is expanding his current role as senior VP, Pottery Barn inventory management, to lead the inventory management teams for the Pottery Barn, Pottery Barn Kids and PBteen brands.