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Microsoft closes retail stores, focuses on e-commerce

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Microsoft says it will permanently close its retail chain of Microsoft Stores across the globe, as it looks to focus on its e-commerce business and provide virtual technical support to customers.

In a statement, the American multinational technology giant says all but four of its stores will shut down – retail stores in London, New York, Sydney and its Redmond campus locations will be transformed into Experience Centres that will only showcase its products.

Microsoft says it will continue to invest in its digital storefronts on Microsoft.com, and in its Xbox and Windows e-commerce platforms, which reach more than 1.2 billion people every month across 190 markets. Its global retail team members will continue to serve customers remotely, providing sales, training and virtual support.

“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,” says David Porter, VP of Microsoft Corporate.

“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’s 83 brick-and-mortar stores, which competed with Apple’s 510 iStores, were primarily based inside malls across the globe. In SA, its main store is in Bryanston, Sandton.

According to industry insiders, Microsoft stores were never a strong rival to Apple stores, as Apple has a wider range of popular hardware and devices, and a huge customer base which is loyal to the brand.

The tech giant’s shops across the globe were temporarily shut in late March in response to the coronavirus pandemic. Microsoft says, since then its retail team has seized the opportunity to innovate in its customer engagement approach, having hosted more than 14 000 online workshops and summer camps, helping small businesses and education customers to digitally transform.

In an April blog post, Microsoft detailed how nearly 80% of its workforce worked from home in a new Emergency Remote Operations model covering five areas: serving SMEs and education customers; training enterprise customers; selling Surface, Cloud and Microsoft 365; supporting customers of all types; and delivering virtual community workshops.

The closing of Microsoft Store physical locations will result in a pre-tax charge of approximately $450 million, or $0.05 per share, to be recorded in the current quarter ending 30 June, according to the company.

With significant growth through its three main online stores – Microsoft.com, and stores on Xbox and Windows – the company says it will continue to invest in digital innovation across software and hardware.

Its newly introduced services include 1:1 video chat support, online tutorial videos and virtual workshops, with more digital in the pipeline.

“We deliberately built teams with unique backgrounds and skills that could serve customers from anywhere. The evolution of our workforce ensured we could continue to serve customers of all sizes when they needed us most, working remotely these last months,” adds Porter.

According to Porter, there are no planned retrenchments at this stage, with retail team members continuing to serve consumers, small-business, education and enterprise customers remotely.

“Speaking over 120 languages, our workforce’s diversity reflects the many communities we serve. Our commitment to growing and developing careers from this talent pool is stronger than ever.”

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