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Bits Blog: Microsoft Goes Upscale With Fifth Avenue Flagship Store

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The new Microsoft flagship store on Fifth Avenue in New York opened on Monday.Credit Justin Lane/European Pressphoto Agency

Most of the luxury brands on the storefronts of Fifth Avenue in Manhattan, one of the world’s most famous shopping thoroughfares, seem to belong together, like the notes of a song.

There are Tiffany & Company, Gucci, Armani, Valentino, Rolex and — cue the sound of a record needle sliding off vinyl — Microsoft?

Yes, the company that brought us Windows and Office is opening a store on the street that brought us $ 5,000 handbags and $ 20,000 watches. The doors of the striking new flagship Microsoft Store will open to the public on Monday.

It’s an expensive gamble on a retail strategy that is still a long way from paying off. It does not take a detective to see that the foot traffic is often light at the Microsoft stores the company has opened — the Fifth Avenue store will be its 113th — over the last six years. That’s a contrast with the jamborees usually found over at Apple’s stores, inevitably a few blocks away or across the mall from Microsoft’s electronics boutiques.

“You always want more,” said Dave Porter, the Microsoft corporate vice president in charge of its retail stores. “We try to activate one customer at a time.”

Arguably, the issue has not been with the stores themselves, which are decent facsimiles of the uncluttered layout of Apple’s stores, but rather with what has been for sale inside them.

That could be about to change, though, thanks to a wave of new Microsoft products landing this week, all of them attracting more attention than the company’s holiday lineup has in years. If there’s any Microsoft Store that can pack them in, it will be the Fifth Avenue location.

I got a preview tour of the store last week. It’s clear the building renovation cost a fortune, though Microsoft executives wouldn’t say how much. The company gutted a building from the 1930s that was previously a Fendi store, replacing all but the top of its facade with huge sheets of glass.

Behind the glass wall, a 20-by-40-foot electronic screen will display noncommercial digital artwork to pedestrians and drivers on Fifth Avenue.

Inside, the store is spacious — more than 22,000 square feet, Microsoft’s biggest to date. It is the first multistory Microsoft Store and only the second that is not in a shopping mall. The other one is in Portland, Ore.

Walking into the store, what hits you first are the Microsoft devices arrayed on large open tables in the middle of the room. There is a collection of Surface Books, the company’s first laptop, which has received positive reviews and goes on sale Monday.

Nearby is the Surface Pro 4, the latest version of the company’s popular tablet computer. An Xbox set up in the front corner of the store — an area Microsoft calls the living room — lets people play Halo 5: Guardians, the science-fiction shooter game that goes on sale Tuesday.

And while you can’t buy the product yet, a couple of display cases in the middle of the store contain HoloLens, the augmented-reality headset that is one of the more intriguing cutting-edge technologies from Microsoft. Big counters allow customers to plop down their devices for tech support sessions.

Company executives say the stores will provide tech support even if a visitor has not bought a Microsoft device.

“If you bring your iPhone in here, I’d love to show you how to use Office on it,” said Kelly Soligon, senior director of retail stores marketing at Microsoft.

Microsoft’s chief executive, Satya Nadella, is showing more patience with the company’s stores than he has with other unfulfilled initiatives begun under his predecessor, Steven A. Ballmer. Mr. Nadella shut down a Microsoft group that made television shows for people with Xboxes, and he cut the staff working on Microsoft’s phone hardware to a fraction of its former size.

Why do Microsoft Stores survive?

The bricks-and-mortar alternatives for showing new Microsoft products in their best light are not great. The number of electronics stores has dwindled, leaving just one giant in the United States, Best Buy. And while the stores of wireless carriers are good for putting smartphones in front of the public, category-bending tablets and laptops often require explanations from more-trained specialists.

“I think the stores are an important part of interacting with our customers and having them realize the full breadth of what Microsoft brings end-to-end,” Amy Hood, Microsoft’s chief financial officer, said in a phone interview last week.

The Fifth Avenue location also shows the upmarket aspirations Microsoft has for its products. Its Surface devices are expensive machines made with high-end materials. In addition, fashion and technology are merging, as with the Microsoft Band fitness bracelet that the company is selling in the store.

“It is A-plus real estate,” said Sucharita Mulpuru, an analyst who follows the retail industry for Forrester Research. “If you can afford Fifth Avenue, that’s where the most affluent shoppers are.”

And if the Microsoft Store on Fifth Avenue isn’t to your liking, there’s always Apple’s flagship store a few blocks up the street.

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