Apple Retail Stores Outperform Tiffany’s, Best Buy
Apple Computer has higher sales per square foot at its retail stores than
Best Buy, Neiman Marcus, and even Tiffany & Co, according to a report
released by Bernstein Research last Tuesday. Performance per square foot
is one of the most important metrics in evaluating a retail chainis success.
The report provided the numbers per square foot per year.
◦ Apple: US$4032
◦ Tiffany: US$2666
◦ Best Buy: US$930
◦ Neiman Marcus: US$611
The report cited Apple is better selection of location and better design
aesthetics in the store compared to the competition. In addition, Apple has
concentrated on premium products rather than cut-throat competition with
PC manufacturers on very slim proﬁt margins. As a result Apple earns an
average of $23M in annual sales per store compared historically to
Gatewayis US$8M per store. Those Gateway stores are now all closed. Part
of Appleis success was attributed to the fact that Apple customers can walk
out of the store with the product; at Gateway they could not.
The report concluded that Appleis keys to retail success have been
location, location, location. Design a great store, appeal to the impulse
buyer, and maximize the revenue per square foot.
Sunday, April 25, 2010