Quick note on Surface Pro being sold out

I have no idea how many Microsoft had available yesterday but I did want to make a few observations:

  1. Microsoft Stores had been giving away Surface Pro reservation cards for the week before availability.  My local store ran out of reservations this past Wednesday or Thursday I believe.  Most likely the bulk of their inventory was thus pre-committed and their were few Surface Pros available for walk-ins.
  2. I saw one report that Best Buy had allowed reservations with purchase of a $50 gift card.  I’m not sure if that is the case, but if so it could mean that their inventory was also largely pre-committed and not available for walk-ins.
  3. Reports of dismal supplies yesterday are based on anecdotal conversations with Best Buy and Staples employees.  But it isn’t clear how much inventory Microsoft would have committed to each store (or rather, how much each of those stores would have ordered).  Performance of the Surface, or of other tablet devices, at those chains might have suggested sales rates that dictated a steady stream of a low number of devices over having large initial stocks.
  4. In my discussions with Microsoft Store employees last week I got the impression that they expected to have adequate supply on hand to meet first day walk-ins.  That suggests demand was greater than expected, though of course each store could have had fewer devices on hand than they were expecting.
  5. That microsoftstore.com sold out and doesn’t allow backorders suggests to me that considerable additional supplies are being targeted at retailers.  My thinking here is that Microsoft would be concerned that if they allowed backorders then they would be “soft”, meaning that buyers would keep checking retailers and as soon as they got their hands on the Surface Pro they would cancel the online order.   That would create an inventory imbalance problem for them.  And it is a hint that Microsoft is focused on making the Surface Pro a success in traditional retail in the short-term over moving product through its most profitable channel (and perhaps alienating those retailers).

 

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3 Responses to Quick note on Surface Pro being sold out

  1. Dave says:

    Hard to know how wide-spread this lack of knowledge wil be, but at the two Best-Buy locations I visited in Boston (Backbay and Defham) none of the staff linked to the laptop/tablet retail areas knew that both the SurfaceRT and SuracePro have SD card slots to add up to 64 GB of extra storage.

    Second: the way each store had to attach their security attachments made it impossible to open the “kick-stand”. The staff also didn’t tealize that the RT and Pro have different kick-stand angles.

    Third: The BackBay store only put out 1 of each device with a “click-on” keyboard atached, because they don’t have a good way to secure the keyboard and fear it’s very easy to take off and steal.

    The first issue is a training issue. And someone should jump on it. It’s important knowledge to get out there after all the press coverage on available storage.

    The second issue is an example of not thinking through the complete “retail experience” that a customer sill have. Who owns that? BestBuy. Who does it impact? Microsoft. So, can MSFT help retailers with a solution??

    The third issue is interesting – and probably can be solved. But again, it’s in MSFT’s interests to offer some ideas to BestBuy and other retailers to help facilitate Surface sales.

    I know these seem like little things, but taken together with generally mixed press reviews and high price points, the quality of the retail experience needs to feel like a thousand bucks.

    • Tim says:

      I’d be curious to know what profit margin Best Buy has for devices like the Surface. I would guess that some of their services (e.g. Geek Squad) could usually make up for low-margin items. But with devices like tablets that are “closed” systems (hardware and software), do they have any incentive to sell them in the first place? Could what you see from the likes of Best Buy be caused, in part, by little margin with no alternative means of profit? Not stating, just asking.

      • halberenson says:

        Good question. I don’t know the answer, but I imagine it is similar to other consumer electronics products. And even amongst tablets the Surface presentation is weak, so I don’t think it is specifically Surface related. And much of my complaints about Best Buy have been about their entire PC-related effort. After all, Best Buy is a failing company and the woes I pick up on in how they are handling PC sales are just an example of that.

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