Retail Customer Experience: Microsoft’s Retail Experience Center – It’s all about connectedness

Apr 21, 2009

By James Bickers, Editor, Retail Customer Experience

a special arrangement, presented here for discussion is an excerpt of a
current article from Retail Customer Experience,
a daily news portal devoted to helping retailers differentiate the
shopping experience.

Last month, I was invited
to visit the Microsoft Retail Experience Center near the company’s headquarters
in Redmond, Wash. The store itself is a faux electronics store, replete
with big-screen TVs, laptops, Xbox games and boxed software. But beneath
the surface, the emphasis on connectedness bubbles up in some unique and
new ways.

Take the shopping cart,
with touchscreen integrated with the
store’s loyalty program. An interactive store map, with turn-by-turn directions,
not only delivers the shopper to the right place but builds an ever-growing
pool of behavioral data.

Most of the products
the shopper passes by in the store bear a Microsoft Tag, a technology that
Stephen Sparrow, Microsoft’s senior industry marketing manager for U.S.
retail, calls “leveraged capital” – a unique example of
an in-store technology that the customer paid for himself, the cell phone.
Giving a shopper a handheld scanner is one thing, but utilizing a device
that is already in his pocket is quite another.

Giant touchscreens dot the walls, allowing customers to browse
never-ending catalogs in a very intuitive fashion. Similarly, hands-on
experiences are served up by a Surface tabletop computer.
In each instance, the devices in the store are pulling from the same central
database, which not only insures a consistent experience, it saves the
retailer time and money – a screenshot or a product photo or a box
cover need only be scanned once, and can then be automatically resized
and repurposed for whatever touchpoint needs

At the back of the REC,
a desk bears a computer station with an RFID printer; as products come in the back door, a staffer prints a tag
for each one and applies it to the box. Boxes are walked through a pair
of reader gates, and from that moment on, the store is aware of each and
every product for sale in the house.

In the back office, the
database is mined through a data-rich but easy-to-understand
management dashboard. From a single location, a manager can see any idiosyncrasy
at the device level, and can make smart scheduling decisions. Color-coded
feeds give real-time sales data, out-of-stock alerts, camera arrays, and
even comparison charts detailing other stores in the network.

Mr. Sparrow said the
emphasis is on making the retail experience more connected.

“Disney used to
say, when you’re on a Disney cruise line, we’d better be able to recognize
you as someone who just dropped four grand on a cruise,” he said. “[We
want to] create a world where you have more transparency, where you can
deliver the right information and business insights to the right person,
in an actionable way, when they need it and where they need it.”

Discussion Question:
What do you think of Microsoft’s push into retail technology? What advantages
does its size and expertise bring? What challenges will it face against
established players? What will define its success in retail?

Please practice The RetailWire Golden Rule when submitting your comments.

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13 Comments on "Retail Customer Experience: Microsoft’s Retail Experience Center – It’s all about connectedness"

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Len Lewis
Len Lewis
13 years 1 month ago

This is all very interesting and certainly a response to increasingly prevalent online selling in consumer electronics.

However, the experience center is a one-shot. Let’s see them do it with 200 or 500 stores and still keep customers satisfied–something that isn’t “faux.”

Anne Howe
13 years 1 month ago

Intriguing concepts include the behavioral data collection as well as the use of the consumers’ cell phone. Both have implications that could allow for great enhancements to the shopper experience. But, both have the potential to be riddled with consumer privacy issues. My hope is that they continue to publish learning that the industry overall can benefit from. Wonder if they will?

David Dorf
13 years 1 month ago

The new technologies Microsoft demonstrates, such as camera-friendly tags, surface tables, and store maps are certainly feasible, but their proven ability to lower costs or increase sales is yet to be determined. But you have to start somewhere, and I think its great that Microsoft is getting serious about retail.

In my circle of friends, more and more are buying Apple computers. This can be traced back to two events: switching to Intel processors and opening Apple stores. Apple has learned to get close to their customers via the retail stores, and Microsoft needs something similar. Perhaps their employee store will blossom into a chain.

Max Goldberg
13 years 1 month ago

The important word inside Microsoft is convergence. Whether it’s convergence at retail or convergence inside the home. Being able to link actions is the future of retail and home lifestyle.

Microsoft is trying to give retailers, brands and consumers a way to better the shopping experience. Let’s hope it works, as consumers aren’t happy with the current experience.

Ryan Mathews
13 years 1 month ago

It was bound to happen but Microsoft has an uneven track record in markets where they are a late entry.

Camille P. Schuster, Ph.D.
13 years 1 month ago

Creating interconnectedness among retailers, consumers, and employees is critical for success. Technology is a tool to make this possible. How the technology is used and what is done with the information is another part of the solution. The timeliness of accumulating the data, analyzing the information, and deploying decisions is another part of the solution. Developing a testing center for experimenting with the technology is a great idea. Deploying what exists in a test center into a rollout for thousands of stores, employees, and consumers is the next step and a real challenge.

Ronald Levesque
Ronald Levesque
13 years 1 month ago

I think the proof in the pudding will come when you get 50 customers in the store, not all of whom will want a shopping cart, not all of whom will have a comparably-equipped cell phone, not all of whom will want to be tracked electronically, not all of whom will share their personal data, not all of whom will want the same exposure to products, etc, etc, etc. I still think trained and knowledgeable employees are light-years ahead of any technology.

John Lofstock
John Lofstock
13 years 1 month ago

David Dorf brings up an excellent point and that is, can this practice actually lower costs or increase sales? There have been a number of home runs, but an awful lot of failures in retail technology. Microsoft’s back-office setup sounds impressive and I applaud their effort, but can’t help but wonder if this could really work over a protracted period of time, spread over 100 or 500 stores.

John Crossman
John Crossman
13 years 1 month ago

I certainly like the idea. It seems to be a push to connect more to their customer and provide more service.

Ralph Jacobson
13 years 1 month ago

It’s not so much that MSFT is a late entry in retail, but look at it as they are expanding their channels to their customer. As their outlets grow, the customer will have more choices to find their stuff.

Marge Laney
13 years 1 month ago

As a “PC” I’m pulling for Microsoft to get it right. I like the idea of all the cool hands-on stuff in the store. I just hope there’s a friendly, well-trained associate nearby to help a techno idiot like myself get out of the messes I will inevitably find myself in.

Laura Davis-Taylor
Laura Davis-Taylor
13 years 1 month ago

I agree that each and every one of these technologies simply must have an activation strategy based on shopper needs (not the cool whiz factor) and they also must be able to generate a clear ROI. Finally, they must be somewhat simple to design into new stores and retrofit into old ones without blowing store costs sky high–which is the most challenging element.

These tools are change agents and they are very exciting. But, I feel they will likely be implemented slowly and carefully by retailers. They are expensive and complex and each one has to stimulate a financial win before they will ever see full roll-out. They must also be optional for shoppers, as pointed out above.

John Saywell
13 years 1 month ago

The retail sector should be applauding Microsoft’s efforts at their REC. Small businesses world wide are Microsoft-centric and without MS driving the standardisation of hardware, operating systems and software over the last 20 years it is unlikely that in-store systems would be as affordable or ubiquitous.

Microsoft knows that most retailers are small businesses. By pioneering new in-store technology, even in a faux store, they will start the early adoption of these new tools by larger retailers, lowering the price and, eventually, bringing them within reach of the masses.


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