In a surprising decision, Microsoft has opted to permanently close its physical stores. On June 26th, the company released a statement citing its plans to move towards a fully digital experience for its retail solutions. According to reports, Microsoft’s physical stores don’t seem to have the best profit margin. However, the decision is still puzzling because customers usually relied on these physical stores to gauge the value of a product.
Even more surprising is the timing of this decision. Slated to release in Holiday 2020, Microsoft’s newest XBOX Console, the Series X would have benefited from its availability in stores. There are a few theories concerning the baffling choice.
1) Firstly, Microsoft is a household name. Even with some less desirable products, the company is among the highest tier of quality control for its technology. With an undeniably great track record, customers won’t be skeptical when buying a product from the company. During the release of a new XBOX, there will undoubtedly be early reviews from industry professionals, influencers and tech YouTubers across the internet. Judging from their confidence in the Series X so far, Microsoft will benefit from the trust the media will generate with the product.
2) Additionally, with the holiday season as its launch date, the XBOX Series X will see a lot of purchases during this period. Physical stores are expected to be packed during this season, so the long lines can be expected at local retail outlets. As Microsoft is the manufacturer, it is a wise decision for the company to leave the physical sales to stores like Walmart or BestBuy at launch. Instead, they can prioritize what they do best, as there is a natural preference for their support services, rather than regular sales.
3) In a more dissenting train of thought, Microsoft’s total migration to online services might be pushing for a total revision of the way tech products are distributed. In a similar vein to Apple’s decision to abandon the headphone jack in 2016, Microsoft could be ushering a new age of retail. Within their operations, the tech giant has prioritized training its staff for optimal online services. Therefore, we can expect world-class customer services in online support. When users experience their reliability, other tech companies might feel pressured to engage in fully digital support services.
Here are some advantages of a fully online support system:
- Larger pool of staff to attend to customers
- 24/7 support with staff from different time zones
- Quick responses
- Support in most languages
- Better Quality Assurance with support staff thanks to rating systems
The biggest downside is physical user testing for products. Nothing beats the experience of feeling the comfort, build and experience of a product before purchasing it. However, there are still local retailers that offer user testing. But, the experience will vary for different stores.
Even with the clear benefits of this, it still feels like a huge risk to make this decision. We can only trust that Microsoft has the best data scientists and engineers to support the potential benefits of a fully online retail experience.
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