Apple’s Secrets of Retail Success

Posted on by in Branding/Differentiation, Business, Customer Service, Planning, Remarkability, Strategy

I don’t know about you, but I was shocked this week when I read how profitable the Apple Stores are.  In Fortune Magazine’s article on, "America’s Most Admired Companies" (3/19/07), where Apple placed number seven on the list, Jerry Useem wrote that while Saks delivers $362/sq. ft. per year and Best Buy delivers $930/sq. ft. per year and Tiffany delivers $2,666/sq. ft. per year, Apple delivers  a whopping $4,032/sq. ft. per year (or over 10 times Saks, over four times Best Buy and over 1. 5 times Tiffany’s sq. ft. numbers).  That’s outstanding! In fact, it’s remarkable. So what’s behind those numbers? And what can you and I learn from them (apart from their products)? Well, here are a couple of insights toward helping you make whatever you’re doing more remarkable.

1. They own the value of design.  You can’t look at an Apple Store and think it’s like any other store. If you haven’t seen an image of the Apple store in Manhattan on Fifth Avenue, then you’ve missed an icon (http://www.apple.com/retail).  You can’t help but be drawn in by the sheer beauty of an Apple store.

2. They own the value of testing.  Before they ever built a store, they built a prototype in a warehouse.  Why? So they could experience what the experience would be for a customer.  One of the things they observed is that they had created a store that fit their product lines, but didn’t reflect how their customers used their computers (i.e as a digital hub). So they completely reworked their layout to fit with how their customers actually used their products (what a novel idea).  In other words, they learned to sell, not the machine, but what their customers could do with the machine.  And though this redesign cost them six to nine months before market, they clearly believe it was worth the wait.

3. They own the value of simplicity. Rather than overwhelm customers with shelves stocked with lots of "product", they only stock a small number of items and they only put a few "samples" of each item out at a time.  This leaves their stores looking clean and easily accessible. In other words, there is no clutter in an Apple store.

4. They own the value of service. Stories about Apple’s Genius bars are legion, but what drove Apple to create them was their desire to offer "concierge level service" in a retail establishment–where their "geniuses" weren’t trying to sell something, rather they were just trying to dispense advice (i.e. service).

5. They own the value of excellence.  As one of the suppliers for Apple Stores said, "Were used to working on projects with high standards. But with Apple Stores, everything is a few notches above." Clearly, anyone who knows Apple knows that there is an almost insane attention to detail and excellence in everything they do.  And that clearly comes through in their stores.

6.  They own the value of customer accessibility.  In order to get people to switch from a PC to a Mac, they knew that people wouldn’t travel out of their way to venture into an Apple Store.  Therefore Apple has worked to strategically place their stores in locations where their potential switchers might be located.  In typical Steve Jobs language, he didn’t want people to have to gamble twenty minutes of their time to check out a Mac, he wanted them to just gamble twenty steps of their time.

7.  They own the value of customer experience. You can’t visit an Apple store (or read the above) without realizing that the customer comes first at Apple.  And what they (Apple) want is for their customers to have an experience that’s remarkable.  And the end result of all that remarkability is a sales per square foot number that anyone in a retail establishment would be proud to own as their own!

So, what can the Apple Stores story do for you?  Well, for one thing, they can help you remember that values drive behavior. If you (or your company or organization) want to make some changes toward greater remarkability and profitability, then you may want to go back and review your values–and how they’re lived out.  Because when the values are right, you really can surprise even the experts (almost all of whom thought, back in 2000 and 2001, that Apple was making a huge mistake by opening it’s own stores). So, what values do you own? And are they the values that can drive you toward being "insanely great" at what you do?

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