Microsoft to Launch Retail Stores

Microsoft has announced plans to launch its own retail stores showcasing its software and entertainment products like the Xbox 360 - and a former Wal-Mart exec will lead the way.

Microsoft has decided to take on Apple head-to-head in the retail business, announcing that it has hired former Wal-Mart executive David Porter to spearhead a new retail storefront effort. Porter comes to Microsoft from DreamWorks Animation, but before that spent 25 years at Wal-Mart, where he was eventually VP and general manager of entertainment—and helped Wal-Mart into one of the biggest music and movie retailers on the planet.

“There are tremendous opportunities ahead for Microsoft to create a world-class shopping experience for our customers,” Porter said. “I am excited about helping consumers make more informed decisions about their PC and software purchases, and we’ll share learnings from our stores with our existing retail and OEM partners that are critical to our success.”

Microsoft has not unveiled any specifics about its retail store plans, but the company is expected to showcase its own consumer operating systems and software offerings, as well as entertainment products like the Xbox 360 game console and Zune media players. Microsoft has not announced how many stores it plans to open or where the first locations might be, but describes the retail effort as a way to “create deeper engagement with consumers.”

Rival Apple has seen strong success with its retail stores, currently numbering over 200. Although industry watchers were skeptical when Apple first started moving into high-rent retail areas, the stores have proven to be a tremendous asset for the company—so much so that Apple cited engagement with its customers through the stores as one of the reasons for backing out of the high-profile Macworld Expo in San Francisco.

However, Microsoft may face significant hurdles entering the retail space: similar retail efforts from Gateway several years ago failed, Dell’s nascent retail efforts never really took off. Similarly, the current recession will complicate any launch of new retail efforts as consumers rein in their spending: after all, Circuit City has been driven into bankruptcy.

Porter starts at Microsoft on February 16.