Microsoft, Trans World Entertainment Forge Alliance

Software giant Microsoft and retailer Trans World
Entertainment unveiled a wide-ranging agreement Monday
that involves cross-promotional efforts — with Microsoft contributing
technology, and TWE leveraging the bricks-and-mortar presence of its 700
“FYE” music and video stores.

In the past, Microsoft has struck deals to expand the distribution of its
MSN ISP software, but this agreement is much wider in scope, involving
Microsoft .NET, Windows XP and Windows Media. Financial terms of the deal
were not disclosed.

The agreement calls for FYE to outfit its retail outlets with 25,000 Windows
XP-based kiosks, which will use Microsoft .NET technologies and the Windows
Media player to allow store visitors to sample audio and video of products
in inventory. The “eWorks” initiative will also feature .NET Passport and
the .NET My Services platform, which will be used to deliver personalized
recommendations and services to customers. Consumers will also be able to
use the kiosks to order difficult-to-find products for shipment to their
homes.

Microsoft will get exposure by having its software showcased in FYE stores,
which will allow customers to get familiar with its new XP operating system
and .NET initiatives. Also, use of the Windows Media Player in this effort
is a means of showing off Microsoft’s multi-media capabilities — an
important factor as the company battles it out with Real Networks Real
Player. Initial locations for deployment include Trans World’s flagship
store in midtown Manhattan near Rockefeller Center, as well as locations in
Detroit, Hartford, Conn., Seattle and Tampa, Fla.

Additionally, the two companies have agreed to joint marketing, advertising
and promotional efforts that will support the October 25 launch of Windows
XP, as well as drive traffic to FYI locations and fye.com.

FYE is also basing a new customer relationship management effort — called
“Backstage Pass” — on Microsoft software, thus this deal marks an effort by
the software giant to show off how its .NET suite can help companies with
CRM. For the FYE program, customers will be issued a loyalty card, which
they can use to log into the service in the store or online, and information
about recent purchases and interests will be used to make recommendations.

“Where, how and why consumers purchase music has changed dramatically. This
new FYE and Microsoft alliance will directly address these changing
preferences by providing a new and exciting way to purchase music and
experience entertainment across multiple channels and consumer
touch-points,” said Bob Higgins, chairman and chief executive officer of
Trans World Entertainment. “Whether it’s providing users with deeper access
to all titles through our store-based kiosks, the ability to sample music
tracks through our listening stations or our ability to offer customers more
relevant and timely information, we expect this new technology to drive
increased sales and profitability.”

The deal also calls for Trans World’s online site, which launched earlier
this month, to become the premier online music and video retailer on MSN
Shopping, making it the preferred site for music news and new releases.