WASHINGTON: Microsoft said yesterday it will close its stores around the world, moving its retail operations online and keeping only four locations that will be transformed into “experience centres.”
The move means the estimated 100 Microsoft stores closed due to the coronavirus pandemic will not reopen as the tech giant enters “a new approach to retail,” according to a statement.
“Microsoft will continue to invest in its digital storefronts on Microsoft.com, and stores in Xbox and Windows, reaching more than 1.2 billion people every month in 190 markets,” the statement said.
The four locations that will become Microsoft Experience Centres are in London, New York, Sydney and at the company’s Redmond, Washington headquarters.
A source with knowledge of Microsoft’s retail operations said this plan was originally in place for next year, but was accelerated by the Covid-19 pandemic. Microsoft’s Xbox Series X is launching this holiday, so it makes sense that the company had at least initially planned for the stores to make it that far. The dual-screen Surface Neo device that was also going to ship during the holidays has been delayed, though the Surface Duo is apparently still on track for this year.
Since many Microsoft stores are in shopping centres and malls, the continued closure hasn’t stood out as unusual. In US states that are taking a cautious approach to restoring retail operations – to avoid a resurgence of coronavirus – most malls remain closed.
In April, Microsoft outlined in a blog post how many retail store associates had shifted to remote work after their everyday jobs were sidelined. The company has continued to provide regular pay for team members through the pandemic.
Retail team members will “serve customers from Microsoft corporate facilities and remotely providing sales, training, and support,” the company said.
Microsoft said it will set aside $450 million to cover the costs of closing the locations.
“Our sales have grown online as our product portfolio has evolved to largely digital offerings, and our talented team has proven success serving customers beyond any physical location,” said Microsoft corporate vice president David Porter.
“We are grateful to our Microsoft Store customers and we look forward to continuing to serve them online and with our retail sales team at Microsoft corporate locations.”
Microsoft in recent years has been relying more on its enterprise services such as cloud computing, with the retail locations focusing on its Surface tablets and laptops as well as Xbox gaming gear. But the physical stores failed to gain the momentum of rival Apple.
Independent technology analyst Neil Cybart said the closings are coming because “the Surface business increasingly looks to be losing momentum in the consumer space.”
The Microsoft Store debuted in 2009 and closely adhered to Apple’s successful retail playbook. Each store is a showcase for the company’s Surface and Xbox hardware, plus a selection of third-party PCs. Employees were well-versed in all things Windows, and the company also offered in-store events, workshops, customer service, and repairs.
The stores were closed even before Microsoft’s latest hardware release cycle that included the Surface Book 3, Surface Go 2, Surface Earbuds, and Surface Headphones 2.