Stuck in a stock price and consumer doldrums as competitor Apple has zoomed by in recent years in both, Microsoft will try to spice things up with more touch and sales points, opening 75 new Microsoft stores in the next two to three years.
Microsoft's chief operating officer, Kevin Turner, told an audience of 15,000 at Microsoft's 2011 Worldwide Partner Conference in Los Angeles that the company has learned a lot about consumers from its retail stores and that the company will embark an aggressive expansion, challenging Apple on that front.
Microsoft will also open stores outside of the United States once the initial wave of its retail store expansion is well underway. Microsoft has only 11 retail stores in the United States currently, so the expansion of 75 new stores is a big shift in strategy. The company will concentrate its new stores in the two to three year expansion in the northeastern United States, California, and Florida.
Apple has more than 320 retail stores and almost 90 abroad.
At one time, Microsoft actually had more retail stores than Apple but the company essentially walked away from that strategy 10 years ago. But Apple has grown fast, due mostly to its successful relationship with customers, and its retail stores have been an important part of that strategy. Many Apple (NASDAQ: AAPL) stores are busy throughout the day, and some have experienced lines out the door when new products like the iPad have been launched.
Customers can see, touch and feel, and even experiment with retail products in the stores.
Microsoft (NASDAQ: MSFT) got back into the retail store business in 2009 after walking away from the strategy in 2001. Apple's retail store success had everything to do with the company's return to the business.
Microsoft's stock price hasn't advanced much in recent years. It trades at a multiple of only 10.57 at $26.61, but even though it's not far off a 52-week high, that's not saying much since the company's stock hasn't been about $40 per share in five years. Apple, on the other hand, trades at a price-to-earnings multiple of 17, and the company's stock price is up almost seven times what it traded at five years before.
Apple, of course, has had robust sales in consumer products, including the iPhone, iPad and laptop computers, and its retail stores have been an important part of that success.