Apple has redefined the rules for retailing and continues to set records for performance. Known as a company that consistently delights its customers with innovative new, cool products, its retail operations are critical to the company’s phenomenal record for innovation.
“They basically took the old book of retail, threw it out and started over,” Piper Jaffray Analyst, Gene Munster, said in USA Today on Thursday.
Apple defied conventional wisdom that computer makers make poor retailers. Gateway tried it with their country store concept in the early 2000s. Poor locations, uneven in-store service (I could never get waited on. With checkbook in hand and store associates chatting it up in the back I left and bought somewhere else) and poor merchandising produced a financial disaster, forcing them to close more than 180 stores in 2004. Gateway is now owned by Acer.
At the core of their stores and customer interaction design is an overarching pillar of the Apple corporate culture: delight your customer with a great experience.
It is definitely working. Apple now operates 323 stores employing more than 30,000 people worldwide, including 16 high profile stores. One, their glass cube store in New York, is open 24/7, 365 days a year. That one store brings in between $400 and $500 million per year, according to USA Today.
Sales last quarter shot up 90 percent to $1.5 billion to $3.2 billion thanks in part to the introduction of the iPad, the company reported.
Their retail success is not due to just their clever, well designed gadgets – computers, iPods, iPads and iPhones – but also to the way the stores are designed both in terms of layout and for customer interaction.
When you enter an Apple store you are met by a greeter. For those of you who have had the experience, you know these are NOT your Wal-Mart greeters. They are hip, they are cool and they armed with an iPad to capture your name and why you are visiting the store. When the first sales associate becomes available – the stores are almost always busy – they meet you at the product station. If you own an Apple product and have a question, you are directed to the Genius Bar where Apple experts can help you solve a problem. Most technical issues are resolved in the store, including hard drive replacement. Compare that with a certain technical squad at one of the other big box retailers who also sell Apple: replacing the hard drive means surrendering your computer for up to two weeks.
There are no “check out” counters. Using the same iPhone that transmitted your product selection, the sales associate “rings up the sale” using credit and debit cards right on the spot. Within seconds, you receive a receipt via email. I do not know what happens when people pay with cash or check, but I suspect that process is innovative as well.
While our economy continues to sputter in a slow recovery mode, and with an ongoing onslaught of dire predictions that the U.S. has lost its innovation and competitive advantage in a global economy, I have a suggestion that will probably help improve your spirits for the future of American business.
Visit an Apple store.
© 2011 John Gregory Self
© 2014 John Gregory Self