Windows 7 Launch Starts Here!

As Windows 7 begins its assault on the consumer retail marketplace today, so far, despite a few questionable decisions, the marketing, merchandising, and retail preparation appear to be clicking on all cylinders.  Since I’m not a product reviewer I can’t comment on how “insanely great” Windows 7 might be, but I can give Microsoft kudos for the preparation and first spate of advertising.  Let’s look at 3 buckets.

1. Inventory prep has been spectacular. This past weekend I happened by a Best Buy store (as you can imagine I do this pretty often) and there was not one single PC for sale with Vista on it.  Lots of Windows 7 machines, however, all of which were marked “not for sale until October 22.”  Someone did a great job in the supply chain making this happen. This will give Win 7 a tremendous boost out of the gate.
2. First ad deals have been well-thought out and innovative.  At their initial introduction I was very critical of MS pricing for Win7 upgrades.  Over $100 is far too much to move the population rapidly off of Vista (and according to NPD’s 2009 Household Penetration Study - 25 percent of households have a desktop running Vista and 40 percent  have a notebook with Vista  - so there are a lot of folks to move).  But, I think the initial offer in some of last Sunday’s circulars, which offered a Win7 upgrade for just $50 ($70 off) with the purchase of a Win7 PC, is brilliant.  It gives incentive to some of that huge XP installed base to do the right thing and upgrade into a new PC while offering them a way to cost-effectively upgrade that companion notebook they have bought in the last two and one-half years which is running Vista.   We hope to see lots more innovative offers focused on those multi-PC households as they represent the biggest opportunity for new sales and upgrades as well.
3. The work done with PC OEMs to align product cycles with Win 7 has also been spectacular.  Never before has the industry launched such a variety of new form factors, price points, technology upgrades, and design innovations at one time. With Win7 delivering improved capabilities in power management, networking, media, and touch the variety of systems available appeal to a wider range of buyers than ever before. This selection ought to help drive PC sales through the holiday season, not just as replacements, but to get consumers to begin rethinking what the right level (i.e. much higher) of PC ownership and usage should be in their home and entice them to reconnect more strongly with the PC experience.

As PC sales and boxed copy sales begin today we will keep our eye on the sales trends in our retail tracking service to get confirmation that consumers also see the change Win 7 has brought to the PC industry.  We expect to see increased marketing and merchandising focused on the upgrade buyer and the multi-PC household opportunity that dovetails with the Win 7 story.  And of course we will be waiting with bated breath for the opening of the new Microsoft stores and how Microsoft tries to interpret the retail interaction between consumer and PC and the buying experience.

Stephen Baker is The NPD Group’s vice president, industry analysis. For mre NPD blogs please go to WWW.NPDGROUPBLOG.COM.