London will be Microsoft's third flagship location, along with Sydney and New York City.
Richard Lim, CEO of research firm Retail Economics, said tech companies are looking to generate buzz and loyalty in their brands by offering new in-store experiences.
"Primary locations like Oxford Street, where there's sustainable levels of footfall, where the experience is much more than retail, is one of the crucial ingredients for success," Lim said.Microsoft's 3-floor store includes an Xbox gaming room, a customized McLaren, meeting rooms for enterprise clients and a digital classroom where students can learn how to code. Cindy Rose, CEO of Microsoft U.K.
The store also highlights Microsoft's Surface computers and tablets, which have helped the software titan grow its hardware business. Sales of Surface devices increased 21 percent year-on-year last quarter. "The Surface hardware that you see all throughout the store, that's going to be a big big seller," Capossela said. "There's no doubt that a physical store is actually very good for choosing physical products and that's part of why we're here."The store opening puts Microsoft is a rare group of companies that can afford to expand into brick-and-mortar in the U.K.
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