To Boldly Go Where Everyone Fails Before - Apple's Retail Success

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I had the opportunity to visit Apple's retail store in Tysons Corner, VA, twice yesterday - unfortunately, it was for repairs, not for fun - and will return again today. I was struck by how busy the store was, and, in general, how Apple has succeeded in its retail stores. Just about every company that tries to get into direct retail from wholesale, or from ecommerce to bricks and mortar, flounders. Surprisingly, Apple appears to have succeeded.

I will be the first to admit that I fully expected Apple to fail at retail, for the above reasons. Yet in 2010, the retail stores had $9.8BN in sales, and $2.4BN in operating profit.

What are the ingredients of Apple's retail success?

  • Cool stores. No better word for it. The stores are well-lit, not crushed, and fun to be in.
  • Lots of toys: There are simply tons of computers and electronics around with which to play.
  • Open feeling: Although the computers have security, the store does not have visible restrictive security at the door. While it helps keep theft away, it subconsciously deters people from coming in. Your mind goes, "really?" if you need to go past a security guard to get into a Best Buy.
  • Tons of associates: They are everywhere.
  • Well-trained staff: They know their stuff, and are the first to admit it if they don't, and then go get the expert.
  • Fun names: The guy isn't the geek or the expert, he is the "Genius" sitting at a "Genius Bar". It even has bar stools; you almost want to order a drink.
  • Happy staff: They are well-paid, among the highest in retail, according to the people I met yesterday. And they can wear practically anything they want, as long as an Apple polo is on top.
  • Diverse staff: The age ranges from kids just out of high school to men and women well into their 60s. Every potential customer sees him or herself somewhere in the staff.
  • No sales pressure: Staff is paid by the month or by the hour (for part-timer). but not by commission. Associates thus feel comfortably spending lots of time with each person, never pressured to make the next deal.

Apple, in its typical fashion, built a retail experience that violates just about every standard precept of retail, and succeeded in making it a fun place to go, be and buy. The numbers speak loudly.