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  • 1. Steve ChazinThe Secrets of Apple’sRetail Success
  • 2. Steve Chazin is a product marketing expert, keynote speaker,eCommerce guru, viral growth specialist, seminar leaderand prolific blogger at http://MarketingApple.com Steve iscurrently Vice President for Products at Salesforce.com, theleading cloud computing and social enterprise company.A few days after resigning from Apple in 1997, Steve wasasked by Steve Jobs to help rebuild Apple’s product andmarketing efforts. Consequently, Steve was part of the teamthat brought the iMac to market, helped return the companyto profitability and created the blueprint for the futureproduct launches of iPod, iPhone & iPad. Steve’s firsthandknowledge of how Apple was saved by better marketing isdescribed in his free eBook and personally told through hisengaging keynotes.Steve has delivered over fifty keynotes, seminars andworkshops at trade shows, conferences and leadershipevents in more than 20 countries. An engaging andwarm on-stage personality, Steve can adeptly range fromtraditional lectures to motivational speeches involvingaudience participation. Because he has built a uniquepractice applying and describing Apple’s marketingprowess, Steve is a frequent television, radio, and printcelebrity and can be seen and heard on BBC, CNBC,ABC News, Fox News, ClearChannel Radio, quoted in theWall Street Journal, Fortune, New York Times, LA Times,BusinessWeek, MacWorld, and is referenced in popularmarketing and education textbooks. Steve can be reachedat steve@marketingapple.comSteve has performed extensive field research, held on sitevisits, and interviewed dozens of employees, customersand partners of Apple’s retail operations to produce thiscomprehensive guide detailing the hidden secrets behindApple’s remarkable retail success.Coincidentally, Steve was born on May 19 - exactly 37 yearsto the day the first Apple Store opened.About theAuthor
  • 3. By any measure, Apple is unquestionably one of the world’smost successful retailers.Even though Apple never sold directly to consumers beforethey opened that first store a little over ten years ago ina mall in Tyson’s Corner, Virginia, Apple boasts someincredible bragging rights for its retail channel. Appleoperates over 360 retail stores which employs over 40,000people and plays host to more than a million visitors everyday. Apple’s retail operations are on track to generate morethan $20 billion in 2012. Amazingly, Apple’s stores averageover $7,000 per square foot which is more than twice theformer gold-standard Tiffany& Company. It is estimatedthat Apple’s Fifth Avenue storegenerates over $35,000 persquare foot making it the highestgrossing retailer in New York -ever. Apple Stores are now thehighest performing stores inretail history.It wasn’t always this way. Apple experienced massive failuresin the 1990s when selling its products through retailers suchas Sears and CompUSA. Its computers were muscledout of view and its brand so weakened that many retailersrefused to properly market or stock Apple’s computers.Even though Apple entered the retail business largely asa defensive move to gain more control of the customerexperience, the climate then was anything but welcoming.Gateway was operating direct-to-consumer retail stores andfailing fast. Apple had to learn how to do things differently.Less than two years after Apple opened its retail stores,Gateway shut down all of its shops and laid off more than2,500 workers. Three years later CompUSA shuttered its 23year-old chain of stores. So while there was little expectationand no guarantee that Apple might succeed selling itsown computers in this miserable retail climate, amazingly,somehow it thrived.The only consultants Iveever hired in my 10 years isone firm to analyze Gatewaysretail strategy so I would notmake some of the samemistakes they made. But wenever hire consultants, per se.We just want to make greatproducts.- Steve JobsIntroduction
  • 4. But how? How did a company with no experience in retailbecome the fastest in U.S. history to reach annual sales of$1 billion during the worst financial crisis in modern times?How did a company with only four products become the mostprofitable retailer in history while creating an experience thatis now the standard by which all others are measured? Whydid a company that was losing money decide to enter theretail market against the recommendations of every expertand “where the only other retail strategy was going out ofbusiness?” How did Apple entice millions of people to visittheir stores and pay full price when all their products arereadily available at other retailers and even tax-free online atAmazon.com? Clearly the answer to these questions is thatApple had to think different about retail and make their storesmore than just a place people go to buy things. They had todevise a way to enrich the lives of the people who shop at theApple Stores and do more than simply deliver a transactionalexperience. In short, they had to reinvent retail.Just as it changed the way people experience complextechnology since the 1970s, Apple had to forever change theretail experience in 2001. This book covers - or should I sayuncovers - the secrets of Apple’s stunning retail successes.These secrets propelled Apple from the backwaters of thesleepy personal computer market to become the undisputedleader in consumer electronics, music, and mobile andthe world’s most valuable company. Even though Apple isunique in selling a handful of products it designs, builds andsells through its own stores, these secrets can be used byany company to succeed in retail.
  • 5. Secret 1: Apple Hadto Think Differentabout Retail.Contrary to popular belief, Apple rarely invents anything new.Entire books are written about how Steve Jobs borrowedideas for Apple from other places like Xerox and Sony,famously embracing the motto “Good artists borrow.Great artists steal.” Apple clearly didn’t invent the PC,the MP3 player, downloadable music, or the mobile phone.The Mac, iPod, iTunes and iPhone were all successfulbecause Apple had ample time to improve upon existingdesigns and functionality. As a consequence of being lateto these markets, Apple was forced to do a better job thaneveryone who came before it.So if Appledoesn’t inventnew things,what does itdo? Simplyput, Appledoes one thingbetter than anyoneelse: it makes complex things simple. Just as the Macwas easier than the PC, the iPod was successful becauseit made getting your music into your pocket dead simple.Apple simplified the overall experience of listening toMP3 files. While other music players forced users to rip,copy, organize and transfer their music files using unwieldysoftware applications and adapters, simply plugging asingle cable into an iPod magically took care of everything,instantly copying all your music to your iPod, organizing itjust as on your computer. A few seconds later the processis finished - and your iPod is charged at the same time -without ever forcing you to sneak a peek at a user manual.Figure 1: Image from an iPod user manual.There is no Step 2.
  • 6. Amazingly, the original iPod required a Macintoshcomputer, a FireWire cable, iTunes software and anexisting library of music - all together representinga minimum investment of nearly $3,000. Yet thetransformative power of this simplified and beautifulexperience made the iPod the must-have gadget of thedecade and the de-facto music player for hundreds ofmillions of people all over the world.Moreover, this elegant experience paved the way forthe iTunes Music Store to deliver legal music directly topeople’s iPods. Steve Jobs proved that consumerswould pay for music they could otherwise obtain for freefrom sites like Napster simply because the iTunes userexperience was so much easier. In April, 2008 Applesurpassed WalMart as the number one music retailer inthe U.S. Clearly, beautifully simple experiences matter.So it comes as no surprise that Apple had to thinkdifferent about the retail experience and Apple-ify it.Apple started by learning why other retailers had failed,uncharacteristically hiring an external consultant to decodewhat mistakes Gateway made with its Gateway Countrycomputer stores. Next it added Gap’s CEO Milliard(“Mickey”) Drexler to its Board of Directors because Gapstores had modern retailing environments and uniquemarketing vehicles. Then, Jobs hired Ron Johnson whosucceeded in giving Target a more upscale image largelythrough his addition of the Michael Graves brand.Johnson tested his suspicion that people might gravitateto a store that offered more than great products. Afterlearning that the best service experiences often happenedin hotels he created the Genius Bar to dispense advice andguidance the same way the Four Seasons’ concierge’sdesk does. Neither sells anything: their sole purpose isto help people have the best possible experience. Finally,at Drexler’s suggestion, Apple built a complete mockupof an Apple Store inside a warehouse in Cupertino wherethey experimented with the layout before opening theirdoors for real. All this permitted Apple to test, adapt andimprove the overall experience in a controlled setting.
  • 7. In fact, Apple’s stores may have opened six monthssooner had Steve Jobs not had an epiphany one day.He and Johnson originally laid out the stores by productcategory reflecting how Apple was organized internally.Jobs realized that this structure would not resonate withconsumers and redesigned the stores to reflect how theircustomers would prefer to shop - by solutions. In short,Apple treated their stores the same way they treat anyother Apple product, redesigning them to be easier fortheir customers. This learning process continues to thisday as Apple constantly evolves their store design, addingor removing elements it learns enhances the shoppingexperience for its customers and improves their business.Even the methodology to where Apple locates its stores isrooted in Apple’s desire to reinvent retail for the better andto reach and convert the demographic it covets. Knowingthat the Mac faithful will drive to a destination but theWindows crowd would not, Apple placed their stores inhigh-traffic locations, as Steve Jobs told Fortune in 2008,they could “reduce that risk from a 20-minute drive to 20footsteps.” Realizing that non-Apple customers may betentative at approaching retail staff for fear of seeminguneducated, Apple introduced free classes and PersonalSetup areas in their stores and created self-servicescheduling systems so users can arrange appointmentswith Geniuses online or within the store itself. Clearly thisstrategy has paid off: Apple now reports that more thanhalf of their “new to Mac” sales are to former Windowsusers. The Apple Stores are a key driver to Apple’s recentmarket share increases even as the rest of the PC markethas shown little signs of growth.Just as with computers, phones and music players, Applewasn’t first to retail so it had to be better at retail. Theessence of Apple’s rebirth slogan “Think different.” plays outevery day in every Apple Store.Figure 2. Using an iPod makes you feel good.Figure 2: Using an iPod makes you feel good.
  • 8. Secret 2: AppleDoesn’t SellProducts.As paradoxical as this sounds, Apple doesn’t sell products.Think back to Apple’s iPod television commercials or itsfamous, award-winning outdoor advertising campaign.You’ll recall seeing plenty of happy, energetic peopledancing in silhouette against colorful and ever-changingbackgrounds with those distinctive white headphonesflowing in unison to its owner’s movements. What younever see is any focus on the workings of the iPod itself.No close-ups showing how to select a song or adjust thevolume level. Yet anyone who buys an iPod falls in love withthe user experience. Why would Apple take all that timeand effort to make a great user interface yet not show it?The reason is simple:Apple isn’t selling anMP3 player. Theyare inviting viewers toexperience the Applelifestyle and become partof the iPod community. The implicit purpose of those spotsis to deliver this message: Use any other MP3 player andyou’ll hear good music. Use an iPod and you’ll feel good.You’ll fit in. Instead of trying to get you to learn what aniPod does, Apple instead shows you how you will feel usingan iPod. Those white headphones? They serve the samepurpose as those pretty Apple shopping bags you totearound the mall after buying your first iPhone, declaring yourrecent membership in the super-cool Apple Club. Thosewhite iPod headphones were not designed by engineers,they are a pure Apple marketing trick intended to make thevisible part of their product a status symbol. Wear whiteheadphones and you are a member of the club. For thepast decade Apple has been subliminally inviting customersTheir job is to figure out what youneed and help you get it, even if itsa product Apple doesnt carry.- Ron Johnson
  • 9. to experience the Apple lifestyle and become part of theunique Apple community. Apple doesn’t sell products.Apple sells membership.Walk into any big box retailer today and you’ll see greattechnology. Yet walk into an Apple Store and you’ll feelgood about being there. Even when those big box retailersoffer palettes of Apple logo’d merchandise with a discountto boot, there is still often a waiting line in front of the AppleStore across the street. There is a secret formula at playhere that can be decoded and used by any other retailerwishing to create a shared social environment in which tosell its products.Apple focuses on what people do with their products andnot what their product does. Their stores naturally helppeople feel that their purchase grants them access to avery special place where everyone enjoys hanging out withother likeminded people. Take as long as you want, surf theweb, make free phone calls to your friends, record videos,whatever. The Apple Store is here to serve you. You - andpeople like you - are welcome here.But there is more going on here than meets the eye.People visit an Apple Store for this experience and, likeenjoying an expensive cup of coffee at Starbucks, arewillingly to pay a premium for it. Yet more than a physicalexperience which can be copied by other retailers, the crownjewels of the Apple Stores are the people who work there.Hiring the right person can often require seven or moreinterviews which makes those selected feel privileged to jointhe Apple family. The typical person that Apple employs intheir stores feels so connected to the corporate mission thatthey are generally happier, feel more empowered, and trulybelieve in what Apple is doing. Because they are drawingfrom the Apple faithful, Apple can afford to be choosy: witha 2% acceptance rate, it is harder to get a job in the flagshipNew York Apple Store than to get into Harvard. Getting ajob there won’t get any easier in the future since Apple’sturnover rate is near the lowest in the industry.Attitude of course starts with the employee, and Apple’sretail policies makes it easy on them. The reason employees
  • 10. don’t seem to be selling or working too hard is that the staffhas been trained not to sell but rather focus on buildingrelationships and to really try to make people’s lives better.Just as making money or increasing shareholder value isn’tApple’s aim - making great products is - sales happen as aresult of this focus on improving people’s lives.Even though listening comes first and sales is seeminglya postscript, it is not all fun and games in an AppleStore. Store employees who are routinely more than sixminutes late for work can be summarily fired. Even withoutsales quotas, service packages are strongly encouragedespecially for devices prone to breakage such as iPhonesand iPads. New employees are not allowed to sell directlyto store visitors until they spend nearly three months at theheels of a more experienced sales member. Employeeswho aren’t proven to be natural salespeople after a quarteror two are often moved to other roles and retrained.To further leverage the advantage of having great people,Apple invests heavily in its staff. Candidates for Geniussupport positions undergo intensive training and must passrigorous certification and regular tests on their technicaland people skills. Apple takes no chances with the waythese influential staff members interact with the public andeven coaches Geniuses to use phrases like “as it turnsout” instead of the less positive “unfortunately” if they can’tsolve a tech problem or if a repair may cost the customer.Since the Genius Bar is one of the busiest places in thestore, Apple created a self-service scheduling systemthat ensures each customer can spend as much time asrequired to resolve their issue. This tool also serves toempower customers to make their own appointments thatfit their unique schedules.Because Apple’s policies enable store employees to beviewed as helpers and trusted advisors instead of sellersof unnecessary products, customers reciprocate with theirwallets. Revenue becomes the byproduct of delightingcustomers, not the goal. With revenue-per-square-footnumbers that are the envy of the industry, it is abundantlyclear that customer delight is the new formula for successby any manufacturer or retailer.
  • 11. Secret 3: AppleEmpowers itsCustomers.Instead of trying to tightly control the buying experience,Apple gladly relinquishes control to its customers.Most retailers try to carefully constrain every aspect of theshopping experience. The way merchandise is placedon display or locked away from curious shoppers, or howmuch time it takes for a sales person to approach you isa carefully scripted dance designed to benefit the retailer.Anyone shopping for a new car might as well paint a targeton their back because their very presence on the car lottelegraphs their intention to purchase soon - giving thesales representative the upper hand before any wordsare exchanged. Even if a customer performs extensiveresearch at Kelly Blue Book or Carfax.com there is oftenstill something hidden from the consumer such as factoryincentives, dealer spiffs, or loan origination bonuses. Aftersigning what seems like a good deal, many car purchasersremain unsure if they negotiated wisely. Buyer’s remorseamong shoppers is practically a disease. Yet rarely doesanyone display such symptoms after visiting an Apple Store.Apple also has strict rules it requires its retail employeesto follow when interacting with visitors. However, Apple’sguidelines are carefully orchestrated to project a much morewelcoming and friendly environment. Their service strategyis embodied by the acronym APPLE, meaning Approach.Probe. Present. Listen. End. The Apple Store employeetraining manual spells it out:“Approach customers with a personalized, warmwelcome. Probe politely to understand all the customer’sneeds. Present a solution for the customer to take hometoday. Listen for and resolve any issues or concerns.End with a fond farewell and an invitation to return.”
  • 12. Sales associates areconsequently trained toapproach every visitorquickly and consistently:at least two Apple staffmembers try to speakto each visitor within 30seconds of their arrival.The Apple approach isalso gentler: if a customersays “I’m just browsing” inresponse to “How may I helpyou?” the staff cheerfully makes sure the visitor knows thateveryone in the store is there to help them at any time.Because Apple sales associates are not commissionedand have no incentive to sell anything they tend not toget in a shopper’s way and consequently spend moretime with others who truly need assistance. By wearinguniforms (colored T-shirts to be precise) they makethemselves easily identifiable and readily approachable.As a result, Apple Stores are much more friendly, openspaces where visitors are actively encouraged to play withthe products on display and to hang out as long as theywant with others who also enjoy Apple products. Theoverall vibe of the store is a place where new and existingcustomers can collectively get excited about the solutionsaround them. Customers spend as much time as they wanttrying any Apple product without feeling guilty about takingup a salesperson’s time. Because Apple’s prices are clearlyposted and the store has a 14 day money-back guarantee,customers need not fear being swindled.During any period of unrestricted browsing and playing withthe cool technology on display, visitors invariably observecountless other customers going through the purchaseprocess in a low stress way. Thanks to Apple’s astonishingsales performance, anyone who spends even a few minutesplaying with anything in an Apple Store will witness thesale of products worth thousands of dollars to new andseasoned purchasers without a cash register in sight. Thiseases their transition from visitor to buyer as shoppers cometo realize they can always come back to learn more or getWe completely rethought theconcept of “try before you buy”: Youcan test-drive any product, loadedwith the applications and types ofcontent you’re actually going to use,and get someone to show you howto use it. If you buy it, we’ll set it upfor you before you leave the store. Ifyou need help after that, you cancome back for personal training. Ifthere’s a problem, you can usuallyget it fixed faster than a dry cleanercan launder your shirt.- Ron Johnson
  • 13. fast service after their purchase. Because they have thesense that they are always in the driver’s seat, Apple Storecustomers feel good about their purchases.Apple knows its customers canbuy all its products at variouswebsites and at other retailerslike Target, Radio Shack, andDixons. Consequently, Applegives customers additional self-service options to stimulatewalk-in traffic to their brick andmortar stores. Customers canpurchase their products onlineat Apple.com and pick themup in any retail store. iOS userswho download the free AppleStore application can see a list of available workshops, viewthe number of customers waiting in the support queue infront of them and even reserve the next available Genius Barappointment. All this happens automatically when they walkinto any Apple Store and connect to the free WiFi.In 2006 Apple took the boldstep of removing physicalcash registers from mostApple Stores and equipped itsretail store employees with itsnew EasyPay system. Storeemployees use a speciallyequipped iPod Touch toperform hip-side transactions.A quick swipe of the customer’scredit card is all it takes to buyany item in the store.A physical receipt, if needed,gets delivered to a printer hidden underneath one of thedisplay tables or emailed automatically.Not content with just making it easier for their retailemployees to process purchases quickly, Apple extendedtheir EasyPay system directly to customers in 2011.Shoppers use their iPhone or iPod cameras through theFigure 3. The Apple Store App.Figure 4. Apple EasyPay.
  • 14. Apple Store app to scan the bar code of any item ondisplay. This makes it as easy to buy a product in an AppleStore as to buy a song on iTunes. Customers leave thestore with their product in hand without needing to say aword to an Apple employee. This self-service applicationmakes even an overcrowded Apple Store a pleasurableplace in which to shop.Finally, Apple encourages customers to schedule theirown workshops or Genius Bar reservations within thestore or over the web. They generate several million(yes, millions!) in-store appointments booked online viatheir website each year. Many retailers have linked theirwebsite to “in-store pickup,” but allowing customers tobook in-store appointments online completely integratestheir multi-channel approach – the online and storeexperience are one in the same. Customers are thengreeted personally by name and can confirm their place inqueue on a monitor behind the Genius Bar. This degree ofspecial attention when needed contrasted with the abilityto browse freely at other times gives Apple Store visitorsa unique feeling of control and empowerment that otherretailers would be wise to replicate.This not only delights their customers, but gives Applean advantage in store operations. They have insight intocustomer volumes, allowing them to better plan staffingneeds. They know the needs of their customers beforethey even set foot in the store so they can better servethem. They empower their staff to solve issues on the spotand use analytics to track emerging trends and issues fromthe web to the store. And perhaps most importantly, aswith the entire Apple experience, customers who make aconnection with the store and staff tend to buy more, havefewer returns and greater loyalty increasing the total lifetimevalue of the customer.Figure 5. Apple’s Concierge Reservation SystemFigure 5 : Apples ConciergeReservation System
  • 15. Secret 4: AppleStores Enrich TheirCustomer’s Lives.You may not expecta company sellingexpensive technologyto well-off consumers toclaim that the primarypurpose of their stores isto enrich their customer’slives. Yet this is exactlywhat Apple claims is keyto their amazingretail success.Jobs wanted Apple’sstores to be more than just a place to buy its computers,insisting that the stores focus on improving andenhancing the value and quality of people’s lives.Johnson realized that if a store merely delivered productsto people, it was not creating value for the customer - itwas just completing a transaction which could be easilyhandled by any website. So the Apple Stores were taskedinstead at helping shoppers see how Apple’s technologycould improve the way they communicate, work and play.In this way Apple Stores would deliver real value insteadof just merchandise.Johnson’s view proved prescient. Customers return oftento Apple Stores to buy more merchandise and to sharetheir experiences with others, creating a virtuous cycle.While the general PC market has been stagnant for thepast few years, Apple’s market share and its same storesales have grown dramatically. Clearly many Apple Storecustomers convert from competing technology platformsand become brand cheerleaders....the most important — and this issomething that can translate to anyretailer — is that the staff isnt focusedon selling stuff, its focused onbuilding relationships and trying tomake peoples lives better. That maysound hokey, but its true. ...Comparethat with other retailers where theemphasis is on cross-selling andupselling and, basically, encouragingcustomers to buy more, even if theydont want or need it. That doesntenrich their lives, and it doesntdeepen the retailers relationship withthem. It just makes their wallets lighter.- Ron Johnson
  • 16. Perhaps Jobs’ and Johnson’s view was shaped bythe necessity of the situation they faced. When Applelaunched its first Apple Stores it had only four products- two portables and two desktop computers - the iPod,iPhone and iPad were not yet invented. Without a largeproduct family to sell, Apple was forced to addressits customer’s technology needs and to fill the storeswith something else. So Instead of creating a buyingexperience the Apple Stores became all about theownership experience, filled with Genius Bars, technicians,software, books, accessories and an overtly friendly andhelpful retail staff. With lots of bright open space in whichto explore, learn and play the Apple Stores became apopular hangout instead of a meaningless warehouse.Apple offers free classrooms, training sessions and weeklyseminars from guest speakers and store employees ontopics addressing how people can improve their livesthrough technology. Apple also hosts Summer Campsessions for young people to learn how to make music,create movies, and improve their grades while their parentsshop - all for free. One clearly visible sign of Apple life-enhancing philosophy can often be seen near the frontof urban Apple Stores. Silver water bowls are providedfor pets of owners who stop by the store on their waytogether. The Apple Stores are so pet and people friendlythat some folks have tried to see how far they can pushApple’s life improving policies. Hundreds of people haverecorded viral dance videos and made free iPhone calls,and at least one New Yorker visited the Genius Bardressed in a Darth Vader costume, delivered a pizza to theGenius Bar and even shopped for a computer with a goat!Apple’s focus on enriching its customers lives has alsohelped shape its hiring practices. In 2007 Apple addeda Personal Shopping Specialist position and postedthe following job description on their website: “We arelooking for people excited about enriching customer livesby delivering a unique shopping experience that is bothpersonal and professional.” Ron Johnson once boastedthat he interviewed every manager that ever worked in anApple Store in order to build relationships across the entire
  • 17. Apple Store chain and to make sure everyone understoodhis core values. In a 2004 interview Johnson said “My jobis to make the store rich with experience for people. It’s notthe boring, laborious, I’ve-got-to-move-merchandise andtake care of customer problems. I’m suddenly enrichingpeople’s lives. And that’s how we select, that’s how wemotivate, that’s how we train our people.”Hiring people who want to do more than just earn apaycheck or push merchandise helps give the Apple Storean authentic feel. Even though Sony and Microsoft tried tocopy Apple’s look and feel for their own retail stores, mostpeople who work at an Apple Store enjoy what they doand derive real delight in helping others improve their lives.Those fortunate to work at an Apple Store genuinely feelhonored to be on this shared mission of enrichment.Figure 7: An Apple customer receiving free personal training in an Apple Store
  • 18. Secret 5: Apple GoesOne Step Further.Many retailers believe their relationship with theircustomers begins and ends with a purchase. Appleunderstands that the customer adventure starts longbefore and continues well after that transaction so itgoes well beyond the ordinary to provide a world class,delightful experience that leaves nothing to chance.All of Apple’s keynotepresentations, pressreleases, billboards andtelevision commercialsare designed to setthe appropriate tonefor the encountersto follow. Even its retail packaging is a carefullyorchestrated event Apple sometimes spends as muchtime perfecting as it spends creating the product inside.The act of opening or “unboxing” an Apple productbecomes something Apple fans eagerly share with theworld moments after purchase and can often be foundon popular blogs seconds after any new Apple productgoes on sale. Examine any Apple product box and you’llfind careful and thoughtful touches that bespeak Apple’sattention to detail. Even the famous “Designed by Applein California” sign crafted into each package delivers anunmistakable subliminal message: this company caresdeeply about the little things. It’s no wonder Apple haslong had a cult-like following among designers, authors,and other creative types. Apple creates art.Apple also knows that retail is more than just packaging.Walk into an Apple Store and you’ll feel less like you are ina retail outlet (where are the cash registers and checkoutcounters?) and more like you are in a museum. Someof this feeling can be attributed to the store’s physicaldesign such as extra-wide front doors, floor-to-ceilingwindows, open air skylights and glass stairs which giveAt Apple, our goal is to delightcustomers when they purchase aproduct and keep them happythroughout its lifespan.- http://www.apple.com/jobs
  • 19. people a sense of freedom. Some Apple Stores like theGrand Central Station location do not have well definedphysical boundaries which lets people browse easilywithout any sense of entrapment or confinement. Apple’snewest and largest stores feel more like an extension ofthe natural building than a purposeful retail establishment.Apple Stores boast the world’s largest seamlessaluminum panels, have patented glass entryways, containself-supporting spiral glass staircases and are awashin extra bright lighting, natural stone floors and warmwood surfaces. Now add the spotless merchandise,advantageous physical locations with happy visitorsand workers and the store practically vibrates with theunspoken Apple mantra - this place is special.Transcending the physical layout or location of AppleStores is an attitude that encourages visitors to toucheverything around them. Well before the iPhone andiPad made multi-touch a natural gesture, and even asmost retailers still hid their best products behind glass,Apple made their stores a touch-worthy experience.Touch anything, stay as long as you want, ask as manyquestions as necessary and feel free to borrow our WiFi.Because touch is the most intimate form of feedback itcan sometimes help establish a bond between peopleand objects. Apple doesn’t just reach its customers - itembraces them - and it encourages a reciprocal behaviorin its stores.Apple employees areencouraged to do morethan necessary to surpriseand delight customers. Onemanager in Utah reopeneda store so a 10 year-old girlcould buy an iPod with ajar of coins she had saved for a year - then asked theother employees to cheer as she left. Bulletin boards inbreak rooms feature “Surprise & Delight” praises fromcustomers and executives to employees who go the extramile to ensure customer happiness. Apple’s focus onthe tiniest details even extends to how employees handle
  • 20. customers who may be upset or emotional, instructingthem to limit their responses to simple reassurances suchas ‘Uh-huh’ and ‘I understand.’When a new product is launched, managers go out oftheir way to keep those waiting for days in front of theApple Store as comfortable as possible, often passingout bottled water or providing access to the store’sbathrooms. Such behavior seems more amazing whenyou realize that none of those future customers waiting infront of those countless Apple Stores - or the employeesinside for that matter - have ever before seen or touchedthe product for which they will gladly open their walletswhen let inside. Those waiting outside and those waitinginside somehow feel connected to something bigger thanjust a product purchase transaction.When the day comes and the new product is finallyavailable the staff cheer customers as they enter the storeto make their purchases and devote plenty of time helpingeach person set up their new toy. On the day the iPhone4 was made available, Apple Store employees took aslong as required helping each customer get comfortablewith their new device despite obvious long lines of othercustomers waiting to get in. Apple has clearly discoveredthat while today’s shiny new iPhone will someday becomeobsolete, the memory of the customer’s experiencewill linger on forever. Apple created their free in-storePersonal Setup service as a way to consistently deliverthis delightful customer interaction and to provide yetanother reason for customers to visit the Apple Stores.What Apple knows - and other retailers seem to forget -is that a company’s lasting (or fleeting) relationship withtheir customers is tied to the moments before, duringand after their purchase. Apple’s careful cultivationof that experience is one of the many tightly managedelements of the Apple brand and part of their unique“magic.” By doing more than is required to surprise &delight customers, Apple Store customers not only switchfrom competitive products but become lifelong repeatcustomers, fans and evangelists.
  • 21. Apple’s New York Grand Central Station Store Opening
  • 22. ConclusionIn spite of being late to enter a marketplace hostile tocomputer retailers with only a handful of undifferentiatedproducts that could not draw significant foot traffic, andafter losing money for more than three years, today Appleis in a retail class all by itself.Just as it improved the experience people have with theircomputers, their music and their phones, Apple reinventedthe retail experience for the better. While Apple now hassome distinctive products and a very powerful brand, itstill uses a secret recipe to continue to achieve new retailsuccesses - a formula that can be used by any retailer.Apple’s Retail Secrets:1. Just as Apple had to “Think different.” about retail, every retailer should rethink the purpose of their stores and focus on the experience a new customer has during the shopping process. Apple changed their layout considerably before they even opened their first store and continue constantly tweaking their store environments to this day. Every retailer should be proactive in learning what works and what doesn’t work and optimize the retail experience accordingly.2. Apple does not just sell products in its stores, rather it provides a first class retail experience that delights shoppers and visitors alike. Any retailer should apply the secret of personal delight to make its visitors feel appreciated, its employees motivated, and its customers connected to something more special than a purchase transaction.3. Apple empowers its store’s visitors by letting them touch everything, try anything, and stay as long as they like. Apple also invested in self-service tools to empower customers to schedule their own appointments and to purchase products online and in-store. Retailers should provide similar tools to
  • 23. allow customers to control their shopping experience while giving them a reassuring feeling of control.4. Apple believes the purpose of their stores is to enrich the lives of their customers. Retailers should take this important cue from Apple and ensure their staff is not focused on just selling products, but intent on building relationships and making people’s lives better.5. Apple goes beyond the ordinary to make their products and their stores feel special. Retailers should consider ways to do more than necessary to surprise and delight their customers. Customers will react positively to stores that make them feel that the people who work there are encouraged and empowered by their employers to go one step further to ensure customer happiness and satisfaction.Clearly the collective results of these retail secretsspeak for themselves. After just a little more than tenyears of retailing, on March 14, 2012, Apple’s marketcapitalization became larger than the rest of the entireUS retail sector - combined.
  • 24. Marketing Apple • 37 Nartoff Road, Hollis, NH 03049 • T 603-930-2490steve@MarketingApple.com • www.MarketingApple.com © Steve M. Chazin All Rights Reserved

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