For example, I understand that the Apple stores do about $4,000 sf in revenue, which I also understand is about 10 times the industry average. So, if they're generating 10 tines the industry average, why aren't more retailers looking at the Apple formula to see how they can make it work for them?
And everyone agrees that brands need to provide better customer service, yet so few seem to be actually doing that. I recently updated Why Don't More Retailers Have Genius Bars? and that's something I think more retail brands could use. It's simple to execute although it can be hard to do well.
So the question is, if brands can see what they need to do, why don't more brands do it? They can see that brands doing things really well actually make great money for the company and for their shareholders. Yet, companies are so focused on very short term goals, they just freeze when it comes to executing the right things. Even in the face of financial proof.
Companies jump on the short-term and the easy. Gut your customer service department, but add SM functionality so you can say you're on the cutting edge. Build more stores but keep your staffing so low that you make the shopping experience difficult. But doing the right thing, sometimes the hard thing, can be significantly more profitable. When Sydney was born almost 9 years ago, Apple stock was about $70/share. Today it's $222.25/share. That's a pretty good show.
So in all of the conversations, we ask "If brands can see the right thing, why are so many of them afraid to do the right thing?" I don't have an answer yet, but I'm sure if I keep asking, I'll eventually get one.
Here's a post I wrote last year about the Apple stores and their retail plans. With the highly anticipated iPad coming out in just a few weeks, I'm sure the Apple stores will be busier then ever.
Even thought their sales were down 3%, Apple is still investing in it's retail strategy. Why, because they know it's the way to really connect with their customers. Got to any more where there's an Apple store and more often then not, that Apple store will be the most crowded store in the mall. Not only are the usually pretty full of customers, but they also have more staff per square foot then any other retailer out there. Well, it looks that way.
We think they've created a social shopping experience and said this back in 2006:
Here's what we think the Apple store is all about: They took the barriers to entry to buying an Apple product and answered those barriers with the store. Again, this is only our take, nothing official from Apple here! And how does that work?
- First barrier to entry has been price in the past, although that has certainly changed. But with a higher priced product, what did Apple do? Create a store environment that's as beautiful to look at as their product. Give people the comfort that they're buying something of value.
- Number two barrier to entry? People don't want to learn a new operating system. Now, us Apple folks say Hey, Microsoft stole the operating system from Mac years ago, but the store takes away that concern. Afraid of learning a new system? No problem, we'll teach you. Come to our classroom (the theatre) or visit the Genius Bar and we'll help you. Learning something new is a big hassle for most people and this is a way cool way to make it less of a hassle. Sure, there are things that I can't figure out how to do, so I just make an appointment and get their help. I don't have the time to figure it out myself, so why not let them teach me or just take care of it quickly.
- Make it a social experience. Although I haven't been to the new store here in NYC at 3 AM, I can bet that a good number of other people have. No matter when you go to the Apple store here in Soho, it's always crowded and it's got an almost club-like vibe.
They're also investing in the downturn. So, while many (if not lost) retail companies are scaling back, closing stores and letting people go, Apple is growing theirs. They understand that in a down economy, it's even more important to find ways to create the right experience to connect with your audience. And, the Apple stores have been a great connection point. I still don't understand why more retailers are not looking for ways to create their own genius bars! Are you listening Whole Foods?