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The Browser by Mike Hofman
December 27, 2007
The Latest Reason Why Apple Kicks Butt
Posted at 5:03 PM
Has Apple become "the Nordstrom of technology"? That's the assertion that Michael Gartenberg, vice president and research director at Jupiter Research, makes in an article in today's New York Times.
The newspaper notes that Apple's retail stores now account for 20 percent of all revenue and the average annual sales per square foot is a hefty $4,000. There are slightly more than 200 stores across the United States, all of them futuristic white beacons of retail bliss.
So how did Apple--a company with little experience in retail--conquer one of the trickiest sales channels in all of business?
"[T]he secret formula may be the personal attention paid to customers by sales staff," the Times speculates. "Relentlessly smiling employees roam the floor, carrying hand-held terminals for instant credit-card swiping. Technicians work behind the so-called genius bar, ministering to customers’ ailing iPods, MacBooks and iPhones. Others, designated 'personal trainers,' give one-on-one instruction and lead workshops."
Beyond that, customers are allowed to check e-mail on an array of MacBook Pros, listen to music on iPods, and attend seminars on film making. One woman claims to have written a book on a laptop in one of the company's three New York City stores--a few sections at a time. (To read the Times article in full, click here.)
The formula is clearly working. Jane Buckingham, the noted retail analyst, says that when she asks clients or consumer focus groups to identify a retail experience they enjoy, they invariably start their list with the Apple Store. “Basically, everything about it works," Buckingham says. "The people who work there are cool and knowledgeable. They have the answers you want, and can sell you what you need. Customers appreciate that. Even the fact that they’ll e-mail you a receipt makes you feel like you’re in a store just a little bit further ahead of everyone else.”
What do you think? Is the Apple store experience truly unique and compelling? Would the stores be as successful if the products weren't so damn appealing? And what ideas about store design and service do you think other retailers should appropriate from the Apple store?
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Apple Stores definately ROCK. Too bad I cant get an iPhone on my Verizon network. If only they could workout the kinks like Apple's music, the major affiliate's TV shows, and the "unlocking" of the iPhone. I think they are shooting themselves in the foot by being a stalwart, instead of really opening themselves up to a broader array of partnerships. When they finally come around and realize that the more they let others play WITH them, the more revenue they will drive to shareholders!
Circuit City cuts it's experienced sales force and gets clobbered in the 4Q. Apple has a sales-consumer centric strategy and hits a home run. Macy's, JCPenney, Kohls... all are complaining. Perhaps retail managers need only to take a look backward in time and see how shopping used to be an event to realize why their sales (and consumer perception) are so bad. Well, all but Apple!
I could not have said it better than John Hyman's post.
Why is "paying attention to the customers" considered "out of the box" thinking? What has happened to retail?
I was having a conversation with a Apple store manager who was hired away from consulting into stores for Gap and Banana Republic, and she said the key item that apple was aiming for 2-3 years ago was allow people to 'try it on' and to have experts on the floor fully available. Note the staffing in general is greater at an Apple Store than other tech retailers. There is also 'adults' working the store, mature, capable, and friendly... they may be managers, but they also cater to the over-40 crowd. Apple Stores key market is the 'drive by' consumer... someone who doesn't know anything about computers other than the PC someone advised them to buy, so they are very much in tune with taking advice. Having people available, and now the conceirge service to magnify the intent to 'advise' you, instead of 'sell' you, is critical. Go into BestBuy and the droids on the floor either glorified pointers "2 rows over" or semi-knowledgeable... Apple gets you to an expert and sells the experience.
-Jeff (waiting for the Xmas rush to dwindle to return to my 3 Apple Stores;-)
In the midst of "Black Friday" sales rush I needed urgent help from the Apple Store Genius Bar - and got it! 'nuff said about the competitive importance of Customer Service!
"Why is "paying attention to the customers" considered "out of the box" thinking? What has happened to retail?"
Superb comment. I remember standing in a China section in a Marshall Fields some 19 years ago for 20 minutes before the sales clerk stopped jabbering to her girlfriends on the phone and spoke to us.
Before the Apple stores, buying a Mac-- I mean the buying experience-- was worse than buying a PC. The Macs were off in a corner. There was no software displayed. The clerks were mostly idiots and/or Mac-hostile. Since Apple opened the stores, they've pretty much made the PC buying experience look pathetic. Where do people buy PC's? Best Buy? Circuit City? Blechh!
The Apple store experience may be new to tech retail, but I've been going to places like DKNY, Zara etc and for years they have given that same treatment. So they are fashion stores, but then again so is Apple. So the jump is not as startling as it might seem.
Further, to call Apple a "pioneer" in tech retailing would be a real stretch. Go to any BMW or Audi showroom and you'll get the same "hands on" philosophy. They have been doing this for decades. And guess what: Macolytes like to liken Apple to BMWs.
So the concept of the Apple store is not the revelation to me as it seems to be to some people. It's just what Apple does best throughout its genesis: it sees a good idea, steals it, and then markets it as if it invented it in the first place.
Right, the thing is that Apple is creating apostles of their products by developing this kind of stores (among other initiatives) and now not only are the stores selling apples but every customer is.
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