Apple Retail

Brenneise, DanielBUS 5275/22/14

History

• Apple was struggling as a company in the late 90’s. Macintosh had lost its luster and Apple was struggling to innovate.

• The stock price had plummeted from $70 to $14.

• After buying NeXT, Jobs became CEO and began a secret project.

History Cont’d

• Jobs secretly began interviewing executives who could begin opening a string of stores.

• Jobs envisioned his computers standing by themselves, not next to an outdated PC.

• He wanted a store where people could find out how great Macs were.

• After a time, they picked Ron Johnson who was a vice-president at Target.

History Cont’d

• The first Apple Retail store was opened in 2001 at Tyson’s Corner Center, Virginia.

• The second one opened 3 hours later in the Glendale Galleria.

• There were close to 7700 visitors in the first 2 days alone.

Initial Feeback

• The Apple Store was predicted to fail because of the small size.

• Typically sales per square foot were used to measure the sales of a store.

• Though there was interest in the stores, sales were generally low.

Expansion• The launch of the iPod generated a lot of

interest around Apple, and the Apple Stores.

• Apple introduced the idea of the Flagship store

• Though there was interest in the stores, sales were generally low.

What made the Apple Store Different

• Apple wanted a store with only 1 entrance and a simple layout.

• Why? So they could control the experience of the customer.

• Detail, detail, detail. They obtained floor stones from a private family quarry, which yielded only about 3% of what Apple would purchase.

• Clean, simple, and inviting appearance were the Apple Visual standards.

What made the Apple Store Different

• The Genius bar is a service center where patrons get service for their computers and mobile devices.

• Face to Face customer service, and relationship building.

• Built relationships with customers, and invited them back for personal training.

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Genius Bar and Personal Training

• Scheduled technical support that was free of charge.

• 1 year of personal training, with the purchase of a mac, for $99.

• The idea was to build lasting relationships with the individuals, and WOW moments with the product.

The Success of Apple’s Retail

• By 2010, Apple’s Fifth Avenue Store was the highest revenue per square foot in the world.

• The annual revenues were near $10 Billion.

• In 2012, Apple became the most valuable company in the work with a market capitalization of $623.5 billion.

• There are now over 400 retail stores open in many countries around the world.

Ron Johnson and JCPenney • Ron Johnson stepped down from Apple and went to work for JCPenney.

• Johnson Overhauled the company’s pricing structure and gave a flat price with no coupons or discounts.

• Critics say that he did not show much enthusiasm for the company, and that disconnected him from his customer base.

• There was no trial run for the discounted pricing and customers were introduced to unfamiliar business practices.

• Johnson Was released in 2013 and they hired back the old CEO.