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Creating a unique retail experience


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Have you visited Apple store recently? Here is my case study about how to create the Apple store experience for your own brand.

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Creating a unique retail experience

  1. 1. Creating A Unique Retail Experience Prepared by Kevin Huang Sept 15, 2015
  2. 2. Page  2
  3. 3. Page  3 “the Apple Store is the undisputed king, a retail phenomenon renowned for impeccable design, deft service and spectacular revenues.” Over the last 10-years, Apple has risen to retail dominance and has built a truly unique retail empire through the vertical integration of the product, retail, and customer experiences within the Apple Store. “Apple ‘truly’ generates a competitive advantage through the delivery of the product, retail and customer experiences via a ‘dialed’ channel controlled by Apple.”
  4. 4. Page  4 Apple has about 50,000 retail employees worldwide. Apple Stores get more than 1 million visitors per day worldwide. The Nanjing East store in Shanghai is Apple’s busiest. It gets 25,000 visitors per day. You can’t even fit that many people in Madison Square Garden. The Genius Bar serves 95,000 customers per day worldwide. That’s enough to fill up Yankee Stadium… twice. The average revenue per Apple Store location in 2014 was $50.6 million. There were 437 Apple Stores at the end of 2014. 259 of them were in the US. The rest were international stores.
  5. 5. Page  5 Apple's revenue from company-owned retail stores (in billion U.S. dollars)
  6. 6. Page  6 Steve Jobs believed the Apple retail program needed to fundamentally change the relationship to the customer, and provide more control over the presentation of Apple products and the Apple brand message. Why Apple Owned Stores?
  7. 7. Page  7 Do Things Right From The Beginning Ron Johnson, Senior Vice President of Retail Operations at Apple from 2000 through 2011 Focuses on “How do we reinvent the store to enrich our customers’ lives?”, not on “How many products we need to sell”.
  8. 8. Page  8 The First Two Apple Stores Opened on May 19, 2001 Tysons Corner Center Fairfax County, Virginia Glendale Galleria Glendale, California
  9. 9. Page  9 A pre-launch tour of one of the original Apple Stores back in 2001 (Tysons Corner, VA). Steve Jobs Introduced the Apple Store (2001)
  10. 10. Page  10 Many stores are located inside shopping malls, but Apple has built several stand-alone "flagship" stores in high-profile locations….. and has received numerous architectural awards for its store designs.
  11. 11. Page  11 These stores enable Apple to fundamentally transform the purchasing conversation with consumers into a valuation of total product experience that is empowered by the unique retail atmosphere of the Apple Store.
  12. 12. Page  12 Beautiful Outside
  13. 13. Page  13 Beautiful Outside
  14. 14. Page  14 Amazing Inside
  15. 15. Page  15 Amazing Inside
  16. 16. Page  16 Apple Knows How To Generate Expectation & Excitement
  17. 17. Page  17 Apple Store Window Display
  18. 18. Page  18 Apple Store Window Display
  19. 19. Page  19 To Learn. To Experience. To Play. To Enjoy. To Shop. & To Remember.
  20. 20. Page  20 On May 22, 2011, Apple replaced their acrylic displays that had information about the product with interactive iPad 2 displays, called Smart Signs, which add more information about the product like specifications, comparisons and extended warranties. This transition from paper to touch displays was dubbed "Apple  Store 2.0" Apple Store Continues to Evolve
  21. 21. Page  21 Authorized Apple resellers, including major big box retailers like Best Buy and Staples, have a dedicated ”store-within-a-store” with wood tables and a backlit Apple Logo. Extend Customer Reach & Engagement
  22. 22. Page  22
  23. 23. Page  23 Competitors Soon Followed
  24. 24. Page  24 Answer Desk Genius Bar Competitors Soon Followed
  25. 25. Page  25
  26. 26. Page  26 2. Create a store that’s more than a store to people. People come to the Apple Store for the experience — and they’re willing to pay a premium for that. The Secrets of Apple’s Retail Success 1. Think different and makes complex things simple. Apple started by learning why other retailers had failed, then hired the retail experts to do the job. 3. Focus on experience, not products. Apple has been subliminally inviting customers to experience the Apple lifestyle and become part of the Apple community. Apple focuses on what people do with their products and not what their product does. Use any other MP3 player and you’ll hear good music. Use an iPod and you’ll feel good. You’ll fit in. The typical person that Apple employs in their stores feels so connected to the corporate mission that they are generally happier, feel more empowered, and truly believe in what Apple is doing. 4. Let your customers feel connected.
  27. 27. Page  27 The Secrets of Apple’s Retail Success (continued) 5. Staff has been trained not to sell but rather focus on building relationships. Customer delight is the new formula for success. 6. Empower your customers. Instead of trying to tightly control the buying experience, Apple gladly relinquishes control to its customers by letting them touch everything, try anything, and stay as long as they like. 7. Enrich your customer’s lives. Apple offers free classrooms, training sessions and weekly seminars from guest speakers and store employees on topics addressing how people can improve their lives through technology Apple’s service strategy is embodied by the acronym APPLE, meaning Approach. Probe. Present. Listen. End. “Approach customers with a personalized, warm welcome. Probe politely to understand all the customer’s needs. Present a solution for the customer to take home today. Listen for and resolve any issues or concerns. End with a fond farewell and an invitation to return.”8. Apple goes one step further. Apple understands that the customer adventure starts long before and continues well after that transaction so it goes well beyond the ordinary to provide a world class, delightful experience that leaves nothing to chance.
  28. 28. Page  28 Empower Your Employees to Make Your Customers Happy Apple employees are encouraged to do more than necessary to surprise and delight customers. One manager in Utah reopened a store so a 10 year-old girl could buy an iPod with a jar of coins she had saved for a year - then asked the other employees to cheer as she left. True Story 1: When a new product is launched, managers go out of their way to keep those waiting for days in front of the Apple Store as comfortable as possible, often passing out bottled water or providing access to the store’s bathrooms. True Story 2: The soul of the Apple Store is in its people. They are hired, trained, motivated and taught to create magical and memorable moments for their customers.
  29. 29. Page  29 The three pillars of enchantment are likability, trustworthiness, and quality. Apple’s engineers take care of qualityquality, and the Apple Store experience personifies likabilitylikability and trustworthinesstrustworthiness. 
  30. 30. Page  30 How to Create the Apple Store Experience for Your Own Brand
  31. 31. Page  31 Apple has created something very different from the cold, "hands- off" nature of traditional high-end stores, while avoiding the clutterof a warehouse store like Best Buy. In sociological terms, Apple has very deliberately changed the "script" of electronics shopping. What do we mean by "scripts"? Sociologists have spent years studying experiences and have noticed that there are shared rules that govern how we act. These scripts are unwritten and unspoken, yet greatly influence our day-to-day behaviors and interactions. In the mundane routines of our lives, experiences that stand out are often those that change the existing scripts. Mini Cooper, for example, replaced the "cheap small car" script with one that leverages the fun aspects of driving a rally car. 7 Steps For Creating Disruptive New Retail Experiences
  32. 32. Page  32 To truly design a great experience that’s right for your company, we need to look beyond the field of design to sociology, economics, organizational behavior, and even theater. The following seven principles will help you be strategic about the experiences you design and choose the right script for your company.
  33. 33. Page  33 7 Steps For Creating Disruptive New Retail Experiences 1. EXPERIENCE DESIGN IS NOT ABOUT LUXURY. As soon as the conversation turns to design and customer- centered activities, the knee- jerk reaction is to cast the product as a "premium" idea. The truth is that customer experience can be central to even "value-based" businesses. Consider Southwest Airlines. At its best, the combination of heart, humor, and efficiency makes for a distinctly Southwest script for air travel that’s different from the norm.
  34. 34. Page  34 2. START WITH EMPATHY. Understanding and challenging social scripts requires stepping into your customers’ shoes. Harley-Davidson has a strong community of riders as brand ambassadors precisely because its employees are the kinds of people who equate biking with life and freedom, and regularly hit the open roads.
  35. 35. Page  35 3. DO YOUR OWN THING. Find authentic sources of connection with your customers and stick to them. People will value originality as long as you continue to serve their needs. Target was a discount retailer trying to outdo Walmart on price before it realized it could create a destination for the design-minded community, providing a lot more value.
  36. 36. Page  36 4. UTILIZE ALL ELEMENTS OF THEATER. Create an immersive world with consistent rules. To reinforce the script, think of the whole experience as a "play," including the cast, costumes, set, and props. Starbucks employs all of these elements in their coffee-shop experience— everything from the interior design to the names of the drinks are considered in delivering the experience Howard Schultz envisioned when popularizing the "coffee-shop" script in the U.S.
  37. 37. Page  37 5. USE DIFFERENT INCENTIVES TO CREATE DIFFERENT BEHAVIORS. Align your people, including their incentives and motivations, with the desired experience. Saturn changed the car-buying script in the 1980s by employing salaried salespeople—and eliminating a stereotype of the sleazy car salesman who’s after commissions.
  38. 38. Page  38 6. THE DEVIL IS IN THE TRADE-OFFS. The experience you offer should have a clear point of view. What you leave out often says more than what you leave in. Chipotle refuses to use freezers, in the fast food industry no less. And Whole Foods won’t accept over- processed foods in its aisles. Managing trade-offs tightly is essential to creating a script with a character that inspires people and separates a brand from the pack.
  39. 39. Page  39 7. EVOLVE TO STAY RELEVANT. Never stop prototyping and testing changes to make the experience better and to change in step with people’s needs. McDonald’s has proved surprisingly resilient through market ups and downs. It constantly experiments with its experience at its Innovation Center in Illinois, making sure new elements—like its wildly successful coffee offerings—support and augment its business goals.
  40. 40. Page  40 Designing great experiences is a blind spot for many corporate leaders. It’s an area of expertise that needs just as much attention, rigor, and patience as the other aspects of business excellence. Now, start working on your unique retail experience plan!