Microsoft To Close All Physical Stores, Will Focus on "Experience" and Virtual Stores


Level 23
Sep 13, 2018
Coronavirus Ripple Effects. The Article in its entirety:

Microsoft has decided to revamp their customer interaction priorities. The company has recently announced they will be closing off all Microsoft physical stores and doubling down on its digital storefronts - the company is looking to start offering new services such as one-on-one videochats, where customers can converse with Microsoft employees when making a purchase - effectively digitizing one of the salient aspects of brick-and-mortar stores. Stores which have been closed since March this year due to the Covid-19 pandemic.

The decision rolls back o Microsoft's continued work on deploying physical spaces where its products can be admired, touched, and tested by prospective buyers. It looked like Microsoft was looking to recreate the Apple Store experience - adding a more premium, more personal touch to their products. However, physical stores are both more expensive to upkeep and vulnerable to more liabilities than digital-only storefronts, and it seems Microsoft has decided the stores just weren't cutting, whether financially or in brand image. No mention on layoffs was made by Microsoft in the announcement, so it seems that most of these workers will be moving on to other endeavors inside the company - likely some of them to the aforementioned 1:1 digital shop customer service. Just another step in an increasingly digital world. The closing of Microsoft Store physical locations will result in a pre-tax charge of approximately $450M, or $0.05 per share, to be recorded in the current quarter ending June 30, 2020. "

Personal note: I think its Times Square spot will be transformed into an "Experience Store" but time will determine that. Comments follow the article.
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