4 Truths Behind The Giant Apple Store Lines

In the era where most retailers are investing in line-busting technologies to reduce the idle time spent in the buying process, Apple is making sure the lines at their brick-and-mortar locations do not disappear.  Business Insider explains 4 reasons why Apple uses long lines as a marketing strategy tactic:

1) Lines have been part of Apple’s marketing strategy for some time

Over three years ago, people joined long lines to buy the iPad 2 at Apple stores around the world. These lines were even longer than those for the original iPad. In fact, they were longer than expected. What many don’t know is that Apple orchestrated these lines by not allowing pre-orders. They did not want a reoccurrence of short lines at Verizon stores when the Verizon iPhone was introduced.

2) Competitors making fun of the lines are only helping to promote Apple products

Competitors, such as Samsung and Microsoft, are drawn into the “Apple trap” by disparaging the waiting lines in their commercials. What they don’t realize is that disparaging competitors only gives them free brand impressions and free advertising — helping them to sell their products. Here are some of the many reasons why.

  • Free advertising
  • No reasons to buy your product
  • When you “put down” popular products, you are putting down the people that like them
  • Makes you look arrogant and insecure at the same time.
  • Puts a target on your back

apple_lines_businessinsider

3) The lines are forming, even if not spontaneously

While the early people in line for Apple products may have an agenda, the lines are already forming and growing. So are Apple’s profits. In spite of a smaller market share than its smartphone competitors, Apple still commands 60% of the profits. As Apple increases its distribution around the globe, its market share is likely to grow too. Many forget that when the iPhone was introduced only one major mobile phone service provider — ATT — sold the iPhone. The other big players in the US have been added in recent years and new deals with China Mobile and others around the world are expected to follow. This is likely to help Apple’s global market share.

4) It’s a great way to do marketing

As Apple has shown, lines are a great way to do marketing. When combined with the brand advantage of uniqueness built into all Apple products, these lines are likely to keep the Apple profit machine going for the foreseeable future. Of course, Apple will have to keep innovating. If it fails to do so, it could open the way for more innovative rivals to build a beachhead that eats into its share of the market and profits. Stay tuned. No matter what happens, it will be interesting.

Read more: http://www.businessinsider.com/if-you-think-apple-lines-are-spontaneous-think-again-2014-9#ixzz3CpjezcU7

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Will there be an Apple store at the World Trade Center?

It appears as if Apple will be one of a handful of companies given the exclusive offer to pay $500-$600 per square foot for retail space in the new World Trade Center, according to Wall Street Cheat Sheet.

playmobil-apple-store

From the article:

Although the shopping-mall owner is already closing deals with retailers, it should be noted that the retail area is not expected to be opened until 2015, or possibly even later. However, Westfield has already signed a lease with Victoria’s Secret and is rumored to be close to having deals with other luxury retailers such as Abercrombie & Fitch, J. Lindberg, Tory Burch, Theory, Michael Kors, and Swatch.

If Apple did secure a retail location at the rebuilt World Trade Center, it would fit right in with the other high-end shops. Apple Stores are well-known as the most successful retail stores in the U.S. based on sales per square foot. Apple’s retail locations make an estimated $4,542 per square foot according to Customer Growth Partners’ data cited by the Wall Street Journal.

Apple most recently opened a store in Northern California where it unveiled its new architectural design style that features a “floating” roof. CFO Peter Oppenheimer noted in Apple’s fiscal third quarter earnings call that Apple’s retail stores made 4.1 billion in revenue in the June quarter.

Apple Store Grand Central, Shopper Marketing

When it Comes to Revenue Per Customer, No One Beats Apple

From a pipe dream to one of the most successful retail operations in terms of revenue per square foot, Apple has defied expectations and lead a retail revolution of sorts. According to an article on AllThingsD, Apple’s average revenue per store for Q1 2013 topped out around $13 million, profiting roughly $12 per customer in that time.

Apple Store Grand Central, Shopper Marketing

From the article:

Impressive numbers for Apple, which continues to outperform all other retailers on a per-square-foot basis in the U.S., by a very wide margin. Apple Stores earn twice as much per square foot as Tiffany & Co., the second-most-lucrative U.S. retailer, and three times as much as Lululemon Athletica, the third-most-lucrative.

And the company’s average revenue per visitor will only improve as it expands internationally, particularly in big untapped markets like China. Apple essentially doubled down on its retail presence in greater China over the past year, raising the number of stores to 11 from six. And according to CEO Tim Cook, that’s just the beginning.

“This isn’t nearly what we need, and it’s not the final by any means,” Cook said earlier this year. “We’re not even close to that. But I feel that we’re making great progress, and I am very happy with how things are going.”

And whatever the China market may lack in individual wealth, it makes up for in volume.

“This is one of the great paradoxes in Apple retail: The more Apple expands internationally, the higher their average retail revenue becomes, despite them opening stores in emerging markets such as China,” said Carl Howe, VP for research and data sciences at Yankee Group. “As a proof point, the New York flagship 5th Avenue Apple store used to be one of the highest grossing stores in the entire Apple chain, pulling in somewhere around $350 million in revenue in 2010. Today — based on anecdotal evidence, but I believe this to be true — nearly every Apple store in China sells as much or more than the 5th Avenue store. China may have a lower percentage of wealthy people than the U.S., but they have more absolute numbers of them.

Apple store customer service, shopper marketing

A New Apple Customer Service Initiative is Coming to An Apple Store Near You

Apple employees will no longer be wandering around the store, according to an article on 9to5 Mac. A new customer service strategy will assign employees to a table to help groups of customers with varying issues. They are hoping to bypass the lengthy wait times associated with their current iQueue strategy.

Apple store customer service, shopper marketing

From the article:

While helping multiple customers with similar purchases might help Apple sell more iPads and iPhones at a more rapid pace, the new strategy does not go without its fair share of criticism. Some Apple Store employees believe the new approach could be too transactional and take away from the personal experience the Apple Store offers.

“I don’t think everyone has the same questions or needs,” an Apple Store employee familiar with the strategy said. “I feel like it’s slowly turning us into Best Buy. Every time I go to Best Buy, there is one guy barely able to handle and help 5 people all wanting different things. [Group selling] is taking away what used to make Apple special,” this person added.

Apple’s approach to retail has historically been nonconventional since debuting its Apple Store concept in 2001. The company replaced traditional paper signs with highly interactive and informative iPad Smart Signs nearly two years ago. Apple has since spent much time training its customers on how to utilize their technology, even in their stores. For example, each Smart Sign featured a ’Specialist’ button that allowed the customer to join the “iQueue.”

Apple Store, retail localization

Is Walking into an Apple Store like Taking Prozac?

Apple CEO Tim Cook took time during his keynote address at the Goldman Sachs Technology and Internet Conference to talk about the future of Apple’s retail stores. The average Apple store receives 10 million visitors a week, as a result, some 20 stores are being shuttered and moved to larger locations.

Apple Store, retail localization

According to an article on TechCrunch:

Apple retail stores, he said, have gone beyond being sales hubs. A store “acts as a gathering place, which has an important role in the community” for youth groups, musicians and more. “I’m not even sure if ‘store’ is the right word any more,” he said. “They have taken on a much bigger role. They are the face of Apple. People don’t think about the Cupertino headquarters; they think of the Apple store.”

This is a message that’s important for Cook to get across, considering that last quarter, Q1 2013, the stores saw only an incremental increase in revenue per store compared to a year ago — $1.25 million per week compared to $1.22 million in Q1 2012. Overall, the stores pulled in $6.44 billion for the quarter. Cook noted that the average Apple store last year made over $50 million in revenue.

Cook noted that Apple will add 30 stores, “disproportionately outside the U.S.” In addition to adding “lots more” stores in China, he also confirmed that Apple will open its first store in Turkey this year. Apple had been hiring in both Rio de Janeiro and Istanbul but had only confirmed the Brazilian retail operation. “We still have a long way to go,” Cook said of the company’s plans to add more countries to its list. “We’ll never be in every one of them.”

Apple Trademark store design, retail localization

Apple granted trademark for its store design

Apple Inc. has been granted a trademark from the U.S. Patent and Trademark Office for its store design. The trademark covers the furniture and fixtures, floors, lighting and shelves found in Apple stores, along with the “Genius Bar.”

Apple Trademark store design, retail localization

In addition, the trademark covers Apple’s all-glass storefront design.

According to various reports, Apple first applied for the trademark in 2010, but its application was rejected by the patent office. A second application by the company also was rejected. According to the Apple retail news site Ifoapplestore, the earlier rejections came because the company failed to prove the design was “inherently distinctive.”

[via Chain Store Age]

 

Apple Store Paris, Retail Localization

Apple Store Revenues Soar 59% to $6.1B in Q1

Apple Store Paris, Retail Localization

Apple’s retail stores continued their enviable performance in Q1 of fiscal 2012. The stores’ total revenue of $6.1 billion was 59% higher than the same period the previous year, and average revenue per store increased from $12 million to $17.1 million, a 43% increase. Apple opened four new stores during the quarter, one in New York’s Grand Central Terminal and three in Europe, for a total of 361 locations; the averages are based on a 358-store total.

In addition, the retailer has simplified in-store transactions with its EasyPay mobile app and added a buy online/pick up in store offering.

Apple is a retailer and also creates products used by retailers, most prominently the iPad. “Retail chains such as Bed Bath & Beyond use iPads to deliver key business metrics on the sales floor,” said Apple CFO Peter Oppenheimer during a recent conference call. “Nearly all of the top companies within major Fortune 500 markets including pharma, manufacturing, hospitality, consumer precuts, financial services, healthcare and retail are actively using iPad to improve workflows, business processes and customer engagements.”

Total store traffic during the quarter, which ended December 31, 2011, increased significantly to 110 million visitors, a 45% increase over the 76 million in Q1 of fiscal 2011. “That translates to an average of almost 22,000 visitors per store per week, reflecting incredible interest in our stores and our products,” said Oppenheimer.

He added that Apple’s EasyPay mobile app is helping to speed store transactions. Customers scan a product’s barcode with their phone’s camera to get the total price, including local sales tax; they can they hit a single “pay” button to charge the purchase to a card associated with their Apple Store account.

EasyPay “has significantly enhanced our ability to handle such high customer traffic levels,” said Oppenheimer. “And now, with personal pickup, customers can order Macs, iPods and iPads from the Apple online store and pick up most in-stock products within one hour at the Apple Retail Store of their choice.”

[via RIS News]

What Lies in Store for Apple Stores?

It would be safe to say that eyebrows were raised at news that Apple is hiring John Browett, the chief executive of British technology retailer Dixons, to head Apple Inc.’s global retail division.

Presumably Mr. Browett interviews really, really well, and perhaps Apple CEO Tim Cook has yet to visit a PC World or Currys (Dixon’s face of retail in the U.K.), but the two retail experiences are poles apart.

Apple stores are the epitome of tasteful design, with no visible cash registers, highly trained staff and an exacting attention to visual appeal; think gleaming white counters, bleached wood floors, minimal and tasteful signage.

Currys and PC World are more in the “stack ‘em high, sell ‘em cheap” end of retail, with all of the associated aesthetic appeal of that school of selling: garish purples, violent yellows, stacks of products, cluttered, aggressive, frenetic.

Apple Store, Retail Localization

Former Apple CEO Steve Jobs was known to be obsessive about his stores. In Mr. Jobs’s biography, Larry Ellison, CEO of Oracle and longtime friend of Mr. Jobs, said: “If you look that the stores and the products, you will see Steve’s obsession with beauty as simplicity—this Bauhaus aesthetic and wonderful minimalism, which goes all the way to the checkout process in the stores.”

Bauhaus aesthetics and wonderful minimalism aren’t words that could ever be applied to PC World. So if not for his design flare, why Mr. Browett?

Apple Store, PC Mag, Retail Localization

“Our retail stores are all about customer service, and John shares that commitment like no one else we’ve met,” said Mr. Cook. “We are thrilled to have him join our team and bring his incredible retail experience to Apple.”

PC World was slated in a 2009 report as the worst place to buy a computer on the high street, receiving a 42% customer score. The same survey put Apple at the top, with customers rating it at 88%.

Although such searches are, of course, self-selecting, a quick search online finds little evidence that much has changed in the last three years.

To be fair to Dixons and Mr. Browett, who was previously at tesco.com, the U.K.’s first online grocery site, he has steered Dixons well through some very difficult times. While rivals Best Buy pulled out, and Comet was sold to the French electronics consortium Kesa for just £2, Dixons reported a not-awful Christmas period.

While like-for-like sales were down 7% in the 12 weeks to January, margins held firm as customers turned to its IT help service, Knowhow.

It is hard to imagine that Apple will be looking to Mr. Browett to take its rich retail outlets downmarket. The U.S. company must be hoping his ability to squeeze margins will enable them to extract even more value from its customers; its stores have one of the highest sales per square foot of any major retailer.

[via WSJ.com]

The desire for the ‘Apple Store experience’ is being driven by retail CEOs [REPORT]

Courtesy of Retail Customer Experience

Tablets and smartphones are redefining the retail shopping experience and will be a $5 billion market per year by 2015, according to a research study released by analyst firm IHL Group. According to the study, “Mobility: A Gutenberg Moment for Retail, A Threat to POS,” the release of the Apple iPad and Amazon Kindle Fire have created price points and form factors for mobile devices that are finally allowing retailers to arm their associates with tools that will transform the in-store experience.

“The advent of mobile devices is a Gutenberg moment that is revolutionizing many aspects of the shopping experience,” said Greg Buzek, president, IHL Group. “A complete transformation of the customer experience will occur at clothing and department stores over the next three years. Store personnel will be able to greet shoppers with their device, access purchase history, help customers accessorize, and even walk around as a personal shopper and check out the consumer — all from the same device.”

Another area where consumers will see more tablets is in table-service restaurants. Customers will be able to place their own orders on devices at the table as well as access games and other entertainment, and servers can use these devices as well instead of fixed POS terminals. This will lead to more efficient turnover; restaurants that have deployed mobile devices have seen a 25 percent increase in the number of times they can turn the table, thus serving more customers every shift.

Key findings from IHL’s new study include:

  • By 2015, over 2.7 million tablets a year will be shipped for use in North American retail and hospitality, an increase of 450 percent. Specialty retailers will deploy nearly half of all tablets shipped to retail.
  • While many would suggest that lower-priced consumer devices will displace sales of rugged handhelds, this will not be the case; instead, this market will rise close to 30 percent over the next four years through more competitive offerings.
  • Non‐rugged handhelds (mobile phones) will experience heavy growth over the next two years as well, with restaurants deploying nearly half of all such devices shipped to retail. These devices will experience heavy churn rates in the 2012–2015 timeframe, so the installed base will not grow as much as might otherwise be expected.
  • Handhelds will have a dramatic impact on traditional POS shipments over time, reducing the growth of POS shipments by 11 percent in 2015 and in some segments as much as 20 percent from previously forecasted volumes. By 2015, annual shipments of mobile devices will be four times that of traditional POS terminals.

“The desire for the ‘Apple Store experience’ among retailers is being driven at the CEO level on down, and its momentum is undeniable,” Buzek said. “For years, retailers have been looking for technology to both provide associates with more data on the products they are offering, and recognize and reward customers as they come through that door. Mobile devices are making this possible.”

Courtesy of Retail Customer Experience