Wednesday, May 17, 2006



Hi, Michael - just wanted to commend your posting on the Apple retail franchise. I agree with your points.

I've thought about this topic quite a bit, both as a loyal denizen of the Apple store near my house and as a tech enthusiast. Here are a few additional observations about “why Apple stores have succeeded”:

1) Apple never tries to be cheap or look cheap. There are 2 ways to maximize $ of sales per sq foot - volume-crammed price leader, or luxury retailer - and Apple has successfully employed the latter. What's more, they've done it without necessarily being all about "luxury." Yes, their prices are higher, but that gap is actually narrowing (viz., the new MacBooks). The way that the other big electronic stores are arranged and marketed (through newspaper circulars and the like) usually screams, "CHEAP!" As a result of its differentiated approach, Apple has loyal customers who actually like being in the stores because it's "luxury they can afford," and the products are well designed. People actually feel good about buying Apple products (see below), in creative and exciting ways, rather than "Hey! I got such a bargain!"

2) The store isn't too cluttered. That's one of the reasons it isn't ugly. No piles of boxes, or "endcaps" blocking the aisles.

3) The employees tend to amplify, not dissipate, buyer passion. The lack of this technique is another major gripe I have with the computer-retailing competitors. I'll go into a typical big-box retailer. I'll be excited about buying something. By the time I get finished looking at the items on display, and dealing with the salespeople, the passion is gone. All I'm left with is instant gratification (vs mail order) and probably a decent price. In contrast, while not all the Apple employees are Genius Bar-qualified, in most cases it's clear they share the passion for the product and the vision. Yes, they'll figure out how to increase your incentive to buy, but it will be done by tapping into your pre-existing interest and amplifying that interest, rather than by half-disinterestedly and ignorantly ramming stuff down your throat. Put simply, it's an "I want this!" (i.e., positive) sale rather than a "Such a bargain! I really put it over these guys!" (i.e., negative) sale.

4) The store appeals to all ages - not just kids, as you pointed out. For example, most teenagers I know seem to love to go to the Apple store, vs rolling their eyes and groaning constantly when confronted with even a brief visit to the typical electronics retailer.

5) The products are designed to look good in a store (among other criteria). This is another detail that matters. This is another facet of the "luxury goods" approach. The only comparable that immediately comes to mind is the Sony Experience. Even with less-compelling products than Apple's, I'd bet that Sony moves a good deal of merchandise through that Madison Ave. store.

6) The demo programs are way better than PC demo programs. (One could argue that this is because the platform supports better demo programs, and attracts those who create them - but that's another debate!) The color is better. The motion is better. The people look better. The scenery looks better. The multimedia is better integrated. The sound is cool. This versus the typical, boring "scenes of nature" or "racing cars" or that ilk, showing on PCs - or the endless Orwellian screens, showing the same mindless commercial channels or the latest jarring DVD.

Let me temper these remarks a bit by stating that I'm undoubtedly painting more of a black-and-white picture than actually exists. I've met helpful people and seen attractive displays in non-Apple stores, and I'm sure the objectives of the non-Apple retailers include raising the quality of the in-store experience. However, in my personal experience, most of the thoughts above apply more often than not.

Keep up the good blogging!

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