Fake Store? Get Real, Microsoft!

[Editor's Note: I've got lots of topics to cover, but also Windows 7 Beta 1 testing to continue. Posts will be shorter than usual.]

This morning, Michael Gartenberg started a Twitter discussion on the topic: "Thinking about the ramifications of what a Microsoft store would mean. Do you think MSFT should go into retail?"

GOT A TIP OR RUMOR?

Kevin Pedraja responded: "Apple needed retail. They weren't getting placement/support anywhere in meatspace. MS doesn't. Won't hurt, but it's not a need."

Jack Schofield tweeted similar sentiments: "No MS in retail! It's OK for Apple to screw its dealers, but Microsoft depends on partners to sell its stuff. Channel conflict."

I'm sure that other folks outside my group of Twitter followers had more to say. It's a good discussion, but there is only one answer: Microsoft must open retail stores, at least a dozen, this year. No. 2 on my list of 10 things Microsoft should do in 2009: Open Microsoft retail stores. Now. I made the same recommendation for 2008, but the urgency is greater this year.

There's no reason for Microsoft to become a major retailer, on the scale of Apple, unless the sour economy ruins too many retailers. What Microsoft needs, at least for now, are a dozen flagship stores. I recommend: Beijing, Berlin, Boston, Chicago, London, Los Angeles, Moscow, New York, Rio de Janeiro, San Francisco, Sydney and Tokyo (or Seoul).

Nokia and Sony successfully have stores without creating too much channel conflict with retailers. Microsoft can do the same, if the will is there. I believe it is. Three reasons I see for Microsoft's fake store:

• Microsoft is showcasing some of its retail technologies in the form of a store.
• The fake store is a prototype showing Microsoft retail partners how to sell a technology lifestyle.
• It's a trial balloon, so to speak, which Microsoft floated out to gauge reaction.

Microsoft has embarked on an ambitious lifestyle marketing campaign around Windows 7, Live and Mobile. I'm a huge fan of lifestyle marketing. The most successful brands sell a lifestyle. But retailers have other priorities than Microsoft, as Apple long ago learned. Microsoft responded to Apple's "Get a Mac" commercials with "I'm a PC." It's not good enough. Apple retail stores sell a Mac lifestyle and reinforce the brand. Microsoft has got to move into retail, if for no other reasons than to reinvigorate its brand and to respond to Apple's success.

Some retailers will complain, but many other partners will support Microsoft. The company store will sell their hardware. I think the greater channel conflict would come not from retailers but OEM partners arguing over who gets into the stores. I've long advocated that Microsoft play favorites among its hardware partners. They don't all execute equally, so why treat them to same? Microsoft retail stores would be the place to showcase the company's wares and only the best stuff from OEM partners.

To be clear: I would advocate later expansion to more stores. But a dozen is a good start,also putting retail partners on notice. If they don't sell the Microsoft lifestyle, Microsoft will.

[Please send your tips or rumors to watchtips at live.com].