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Retail and “The Apple Way”

Given that I sometimes work in an Apple Store, I found an interesting article titled The Floor Plan with a Plan in a recent issue of Business 2.0. Unfortunately, the article is largely interesting because the subject fails to understand a good deal of what makes Apple Stores "Apple."

Please note that I'm not speaking as Apple or for Apple in this case, but merely as someone who has been an Apple follower and user for darn near my entire life. Any questions? See the link to my disclaimer in the sidebar.

The article begins with some interesting facts of the critiquer, one Paco Underhill, the CEO of "Envirosell," as well as Apple's invasion into retail:

During Apple's most recent quarter, they generated 10 percent of the company's $1.5 billion in revenue. Even with high rents in shopping districts in Boston, Las Vegas, and Los Angeles, the outlets lost just $22 million in 2002 and are on a break-even pace for 2003.

The Apple Store in Wellington Green sold more than any other electronics store in the mall in 2002, and it didn't open until August 17 of that year. Do the stores make money? Well, this article says they're on a break-even pace for 2003. Most retail outlets don't look to break even until their fifth year of operation.

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The article then moves on to the design, the architecture, of the Apple Stores. It is at this that Paco is an expert. Let's see how he does, shall we?

Business 2.0 states "The glass staircase is the store's visual centerpiece. Customers naturally want to climb it, drawing them into the store." Paco says "Spectacular, yes, but there's just one problem: Older shoppers may be terrified of slipping or falling. Let people know there's an elevator too."

How many elderly people visit the SoHo store? I wonder. Hardly a point with which I'll disagree with Paco, though.

Business 2.0 says "Apple organized hardware sales into five bays: consumer, pro, movies, music, and photos. Small placards display prices and specs." Paco says "Lots of people walk in and don't know it's a store. Here you could use a big sign - 'In Stock Now.' Consummate the damn deal!"

I haven't seen too many customers confused about the fact that, sitting in or next to a mall or shopping center, the Apple Store is indeed a store. People may ask "you have these in stock here, right?" but oftentimes that turns out to be a question of customization (the only build-to-order allowances stores provide is in RAM/AirPort card setup) or stocking (i.e. "Do you have the new towers in yet?").

Business 2.0 continues, saying "Besides stacks of iPod boxes, only two other products are on display at checkout." True, and Paco says "A high percentage of shoppers actually read signs when they're held captive in line. Stack more point-of-sale products within reach, and post simple signs explaining what they do."

Perhaps Paco hasn't considered the possibility that, for Mac users, a $500 accessory is an impulse buy. 🙂 But seriously, this is the first point at which Paco fails to "get it" about Apple. Steve Jobs' decorating tastes can be summed up in one word: austere. Do Apple stores sell Apple merchandise, like t-shirts, keychains, or other trinkets? No. Could they make a lot of money doing so? I think so. What's stopping them? The stores would look like crap. They'd lose the austerity, the cleanliness, and the entire "feel." They'd look junky. Apple stores are a showcase of technology, not the local Gadzooks, Radio Shack, or Wal-Mart.

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Business 2.0 continues to the second floor (where the theater at the SoHo store is located), with "In a 46-seat theater, Apple employees and guest experts host free classes on everything from Mac OS navigation to Photoshop and film editing." Paco says "A great customer lure. Tip: Coffee cups are allowed, so why not sell concessions at stage left?"

Concessions? So now in addition to the Wal-Mart approach to candy bar and lip gloss sales, we're throwing in the ballpark approach too? Should the concession workers toss peanuts to the audience during presentations? Would Steve tolerate cries of "Hey, Beer Man!" in theater presentations?

In addition to the logistics nightmare and expense that a coffee shop would add, and to the tackiness this would also bring to the store, Paco seems to be forgetting one simple thing: Apple Stores are not coffee shops! They're not clothing stores. They're not Wal-Mart. They're computer stores. They sell computers and accessories. And that's it.

According to this article, Apple is on its way to meeting the "break even" point this year, drastically beating the five years at which most retail outlets aim. I'm happy to have the opportunity to spend time in one, and I'm glad the stores exist. The Mac advantage is one you must at least see to more fully understand, and the stores are accomplishing the simple task of showing Apple technology to people and allowing them to "get it." Would you rather walk into a computer store and be asked "How can technology suit your needs?" or "Do you take cream or sugar?" C'mon Paco, you're being silly.

4 Responses to "Retail and “The Apple Way”"

  1. Yeah, Paco! Stop being a little biatch, dammit. 😛

  2. Excellent counter-arguments to the article! I totally agree with your take on it.

  3. What I want to know is, where does he get off using such an obviously fake name?

  4. Good comments minimalism/austerity=cool=apple=sales


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