Sunday, June 8, 2014

The Windows Store (Fake?)

Microsoft is trying to capture some of the magic of Apple, with its own "Windows" stores.  Are they kidding us?

Apple has succeeded in the marketplace not by selling a lot of products (their products command a minority share of each market, sometimes a tiny, tiny share).  Rather, they have convinced people that their products are hip and trendy, and worth paying double or even up to fives or ten times as much as the competition.

It is, in a way, like those "Abercrombie" stores that sell $2 tee-shirts made in China, for $20 or more.   You convince the kid that they have to have one, and they will pony up the dough.

Meanwhile, at Wal-Mart, t-shirts are selling for a few bucks apiece.  Apple is Abercrombie.   Microsoft is Wal-Mart.

And Wal-Mart makes a lot of money - and has a far greater market share than Abercrombie.

The other day, we went back to the godforsaken upscale mall, as the car was being repaired and rather than wait around the dealer, the shuttle driver offered to drive us there so we could get lunch and kill time.  I could write a whole posting about the place, and perhaps will, shortly.   Trophy wives in upscale SUVs wearing skinny jeans from Forever 21.  Need I say more?

But getting back to our story, one of the stores there was a "Windows" store, set up like an Apple store, selling Windows Phones, pads, and I guess computers, too.   In case you have been living under a rock for the last 20 years, Apple has sold a lot of overpriced electronics by operating "Apple Stores" - the most famous being a glass box in Times Square.   You go in, and sit at the "Genius Bar" or whatever, and some salesman helps you decide what sort of technology best fits your lifestyle.   And a funny thing, in every case, it is an Apple product.  I doubt the "Genius" ever says, "Gee, for your needs and lifestyle and income, a $2500 Macbook just isn't worthwhile.  I would suggest a cheap laptop from  Wal-Mart instead!"

And if he was a real "Genius" he'd probably say that to 99% of the people coming in.  But he isn't a "Genius" - he's just some Randall Herschel in some sort of sales job.

So, it seems that Microsoft wants to capture some of this magic (and sales from clueless people who will buy whatever piece of equipment that some "Genius" tells them to buy) and has started setting up their own "Windows" stores, which look a lot like Apple stores.

We went by and it was amazing - there were like 50 people in there - customers and employees, and the chatter was deafening. What was odd was that it was a Friday morning and the fake "downtown" shopping mall was pretty empty.   Where did all these people come from?

So we went to lunch and then walked around some more, waiting for the shuttle bus.  We went by the Windows Store and the place was empty. There was one sales clerk behind the desk. No chattering crowd oohing and aaaahing over new Windows 8 products.  Now, don't get me wrong, I am not a Microsoft-basher.  I have, uh, seven computers right now (whose combined purchase price would be less than ONE Apple computer) and they all run Windows 7 or lower (I have a netbook running Android, but that is another story).  Windows products are cheap and easy to use, and when they break, you can just buy a new one, rather than consult with a "Genius" for $300 an hour.

But let's get real here, everyone hates Windows 8.  No one ooohs or aaahs over it.  Windows 7 is a good product, and Windows 10 will be.  But Windows 8 is the Vista of touch-screen O/S and that is saying a lot.

So, why the flash crowd at the Windows store - 50 people or more and at least a dozen salespeople?   Then, an hour later, no one?

It got me to thinking, did they just populate the place with shills?  One way to sell products is to make a place look really popular.  If you have a velvet rope out front, with a line of people waiting to get in, so much the better.

My hapless brother the hippie (the less crazy of the two) once ran into this effect.   He is, I'm afraid, a chumpster of the first order.  Living in New York, he got an "invitation" in the mail to a "hot new club" that was opening, and as one of the selected "movers and shakers" in the City, he was specially invited to attend the premiere.   So he got dressed up, took the invite, and for some reason went, without his wife, to go to a nightclub opening, at the ripe old age of 50 or so.   I am not sure what he was thinking.

It turns out, everyone in town got one of these "special invitations" and the club wanted to generate "buzz" for its opening night by having a long line to get in.   They never intended him to get in, but rather to stand in line to make the place look popular.   So he stood in line for a couple of hours (like I said, clueless!) until a television crew came down the line, and while interviewing the club owner, asked why these people were not being allowed in.  "Well, we have a dress code," he said, "and this guy" (indicating by brother) "is doing the grunge look, and that's not what we're all about here."

In other words, you ain't getting in, buddy.   And some people are idiotic enough to stand outside clubs, in lines like this, until 2 in the morning, hoping for the precious opportunity to pay a cover charge and $20 drinks, for just a few minutes in the fabled club which will close in a year or two and re-open as a felafel restaurant.

My brother is dense, but not that dense.  He got out of line and walked home, perhaps a little chagrined by the deal and feeling a little foolish.   But nevertheless he was fascinated by how this manipulation worked, and how businesses manipulate people using subtle psychology to make things seem popular and desirable - even a dank nightclub with sticky floors and overpriced drinks.

But that got me to thinking, I wonder if Microsoft filled that place up with shills?   Come to think of it, why not?   If you can make a place look "popular" by having a line out the door, well, some people (chumps in particular) will just get in line on general principal, thinking that anything people are in line for must be good, right?  And it would explain why the store went from 50 people to 1 in an hour.

And I wonder if Apple does this, too.   Why not?   Make sure you have every seat at the "Genius Bar" filled, so that people feel "lucky" to be allowed to sit there.  It is the Starbucks Effect - take a simple commodity (and computers today are indeed commodities - did I mention I own seven?)  and then convince people not only to pay 3-10 times the going rate for it, but also to consider the opportunity to buy as some sort of sacred privilege.

And this sort of thing is not new.   In the Madness of Crowds, Charles McKay describes how people in France (and later England) got caught up in stock bubble hysteria and threw their life savings away on worthless stocks.   The "Stock Jobbers" convinced these folks that they were lucky to even be allowed to buy these worthless stocks.

And so it goes.  Whenever Apple offers up yet another version of its iPhone, you can bet people will be "camped out" overnight to buy the phones.   Maybe some of these "campers" are paid by Apple?  It is an interesting question.   Ditto for Wal-Mart's unfortunately named "Black Friday Door Busters".

The best bargains are not to be had at the store which deems it a privilege on your part to be allowed to shop there.   And if there is a crowd (or appears to be a crowd) lined up to buy, ask yourself whether this represents real interest in the product, or just some hype generated by the marketing department.

And it goes without saying and any of these products can be bought more readily and cheaply online....