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.

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