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Best Buy To Carve Out Space For Microsoft Stores
UnknowingFool writes "Best Buy and Microsoft will launch 600 Microsoft stores within Best Buy retail locations in a store-within-a-store concept. The Microsoft stores will occupy 1500-2000 sq ft within each location. The terms of the deal are not announced, but I assume it benefits both as Best Buy would likely charge rent to help with declining revenue. For Microsoft, they may get cheaper facilities than building their own stores. The last I heard, MS had a very ambitious plan to launch hundreds of stores a year. I have doubts about the success of this venture, considering anecdotally almost every MS store I've seen in my travels was nearly empty. Since they all were located near Apple stores, the stark difference in foot traffic was apparent. The only exception was the MS store near Redmond, which had a decent crowd."
I think this is clearly a sign that the old "Big Box" stores of the 90s and 00s are on the way out. Best Buy is slowly realizing that they'll never be able to compete with Amazon on price, and they don't want to serve as Amazon's showroom, where customers check out the products and head online to actually buy it. But they realize this trend, and how Apple can have a showroom in their Apple stores, and not care if someone ultimately buys it in the Apple store or on Apple.com (or even an Apple product in Best Buy) -- Apple gets paid either way. So by teaming with Microsoft to get them to put a store inside their store, they get to charge them rent, and Microsoft gets paid whether the customer buys the Microsoft product in the store or later on online. I'd almost expect Best Buy to do this with other companies, like having a Sony Store inside, which would ultimately effectively make Best Buy a "mini-mall" of electronics instead of a stand-alone store competing against amazon and walmart (two companies that are difficult to compete against). Microsoft could be a guinea pig here.