Tech Retailing May Be Getting Better, but It’s Also Getting More Fragmented

The trouble with the trend toward manufacturer-operated stores.

  • Share
  • Read Later
Bloomberg / Getty Images

The isolated Apple section at a Best Buy store in San Francisco on December 9, 2011

Nick Wingfield of the New York Times has a nice piece today about the efforts tech companies — including Google, Intel, Microsoft, Verizon and others — are making to improve the often lackluster experience of buying consumer-electronics products at retail:

Brian Garduno, a customer reclining in a red leather chair, likened the old Verizon store in the same mall to “being in a train car.” As he waited in a red leather chair while a Verizon clerk prepared a new Samsung smartphone and watch, Mr. Garduno, a freight manager, praised the new store’s colorful décor and pronounced the customer service “about 99 percent better” than at the old one.

Established electronics retailers like Verizon have gone to great lengths in recent months to overhaul their stores. And the heavyweights behind many of the devices — the Microsofts, Googles and Intels — have moved to open retail stores of their own, some temporary, some permanent. In some cases, the brands are creating upscale enclaves for their products within the jumble of megastores.

I’ve noticed some of these measures myself. When I recently visited my local Verizon store, a greeter took my name at the door and said someone would be with me shortly. I plopped myself on a bench in a corner to wait — and before too long, a staffer not only found me, but sat down next to me to handle my issue rather than dragging me across the store to a counter. It was a delightful little moment, which is not an experience I normally associate with wireless retailing.

There’s one aspect of this trend that’s a step backwards in some ways, though: brand fragmentation. My romantic ideal of a computer store is a place with every major model from every manufacturer, and employees who are consistently capable of providing smart advice about all of them. I cheerfully concede that it’s probably an impossible dream, or at least one no major chain has ever come close to realizing. But the trend Wingfield discusses involves walling off brands from each other, both literally and figuratively.

As he says, the basic concept is nothing new. There’s a venerable, sprawling Sony store near me. It’s packed with artfully-displayed goodies, and if you’ve already decided to buy a Sony product and aren’t price sensitive, it’s probably a nifty place to shop. But by definition, it’s not useful if you’re still mulling over your options or need unbiased advice. Nor is an Intel-operated store the right place to learn if you might reasonably save a few bucks by purchasing a computer with an AMD processor.

This sort of fragmentation even affects Best Buy, where different brands are available in abundance. The chain has had a separate section for Apple products for years. Now it’s replacing its old-school PC departments with Microsoft sections staffed by Microsoft employees, and is also divvying off Samsung-only areas. The exercise has its upsides — the Microsoft area at the store near me is a dramatic upgrade over the old PC space it replaced — but it’s also confusing. Where do you go to look for Samsung PCs running Windows 8? What do you do if you’re not sure whether to buy a Windows laptop or a MacBook?

More than anything else, retail fragmentation is a response to the ginormous success of the Apple Store, which has shown that it’s possible for a gadget maker to control its own retail experience in a way that’s both helpful to consumers and wildly profitable. But it’s not a rational template for other manufacturers, since they don’t have the base of loyal customers Apple does, let along the expertise at marketing and merchandising.

Which means that retail fragmentation isn’t just frustrating for consumers. It’s also likely to lead a bunch of companies to waste a lot of money on very nice stores that don’t boost their bottom line. Some of the manufacturer-operated retail establishments Wingfield mentions may still be in business five years from now — but I suspect that most of them will have gone the way of the Palm stores.