We’re outside Microsoft’s new flagship store location on Oxford Circus in the center of London.
This is a famous shopping area lined with some of the world’s biggest brands,
including Apple just down the street.
But when you think of Microsoft, its probably software like Microsoft Office comes to mind,
not exactly things you’d go buy on the main street.
So we’re here to get a first look inside the store to see what it's all about.
Right away, you can tell Microsoft is trying to make this more than your regular electronics store.
It includes interactive video walls, a customized McLaren and a business center.
The store spans three floors and a total of 21,932 square feet, so it’s pretty big.
It’s the first of its kind in Europe, but there are similar flagship locations in Sydney and New York City.
One main purpose of flagship stores like these is to drive interest and buzz around the company,
versus generating sales on the spot.
It’s all about the experience.
Of course we want to sell stuff but that’s not how we measure the success of the store.
So along with the demos and experiences, Microsoft is also showing off its growing list of devices.
The company made its name in software, but it's pushed into hardware in recent years.
For example, revenue from its Surface products increased 21% last quarter.
The Surface hardware that you see all throughout the store that’s going to be a big, big seller.
There’s no doubt a physical store is actually very good for choosing physical products
and that’s part of why we’re here.
Besides targeting the general consumer, you can tell Microsoft is also trying to appeal
to specific audiences, like gamers and professionals.
The HoloLens 2 headset is specifically aimed at businesses.
Meanwhile, this part of the store is clearly geared toward hardcore gamers.
Microsoft isn’t the first tech company to emphasize the in-store retail experience.
Apple pioneered a new approach to retail stores in the early 2000s and was met with some skepticism,
especially at a time when other established consumer electronics chains were struggling.
Now several tech companies have brick- and-mortar stores with an Apple feel
including Chinese companies Xiaomi and Huawei.
Meanwhile, Amazon is also opening more storefronts including bookstores, cashier-less grocery stores
and so-called 4-star stores for its most popular products.
Still there’s no denying the popularity of online shopping has changed
the business landscape for brick-and-mortar stores.
In total, a record 2,481 stores disappeared from Britain’s top 500 high streets last year.
What we’re seeing here is some of those big tech giants move into physical retail
but they’re being much more selective in where they want to be.
So, in primary locations like Oxford street, where there’s sustainable levels of footfall,
and the experience is wider than just retail, is one of the crucial ingredients for success.
Consumers more and more want something meaningful when they go into the store.
And that can be about entertainment, about the environment, even about escapism.
And this is what Microsoft are really trying to create.
Some industry experts say the main street could soon be dominated by massive companies
with the money to spend on flagship locations in prime districts.
Microsoft, which is one of the world’s most valuable companies worth around $1 trillion,
looks like one of them.
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