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(MVentur) DOWNLOAD: Apple needs to go beyond retail to remain relevant


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by Graham Brown, MVentur

Apple needs to go beyond its traditional comfort zone within the retail space and explore how youth are using technology on a daily basis if it wants to remain relevant.

Where Apple’s Frontline was traditionally defined as the retail space, it now needs to move one step further into the 3H of the next generation (the homes, hangouts and hideouts) and develop clearer insights into the nature of the post-retail experience.

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(MVentur) DOWNLOAD: Apple needs to go beyond retail to remain relevant

  1. 1. MVENTUR MEMO Q1 2013: APPLEAPPLE: FOCUS MARKETING ON POST-RETAIL EXPERIENCE TORETAIN BRAND RELEVANCEby Graham Brown, MVenturApple needs to go beyond its traditional comfort zone within the retailspace and explore how youth are using technology on a daily basis if itwants to remain relevant.Where Apple’s Frontline was traditionally defined as the retail space, itnow needs to move one step further into the 3H of the next generation(the homes, hangouts and hideouts) and develop clearer insights intothe nature of the post-retail experience.Frontline is the space for discovery, customer interaction and education,and these functions are important in brand success and are increasinglyfulfilled outside of the store.Product discovery is already happening at home with 68% of peopleusing tablets and 50% using smartphones at home to browse newproducts for future purchase (source Adobe). As tablets and
  2. 2. smartphones grow in capacity, out-of-store education and discovery iskey to maintaining a positive brand experience.In a recent media interview, Apple CEO Tim Cook said of competitorproducts, “...and then they get it home and use it, and the joy is gone.The joy is gone every day they use it--until theyre not using it anymore!You dont keep remembering, Oh, I got a deal. Because you hate it!"Apple’s retail presence has provided a competitive edge both in terms ofmarketing and innovation but as it continues to strengthen its retailoffering, competitors seek alternative ways into the youth market whereApple is weak. Facebook, Amazon and Google all have avoided bigretail plays and invested heavily in on-campus Frontlines.Just as the old business maxim “nothing fails like success” applied toNokia’s reliance on a strategy that proved successful at the turn of themillennium, Apple’s investment in retail has left it exposed to theencroachment of competition in these new post-retail Frontlines.WHY YOUTH?The strength of Apple’s brand today is based on the seeds it sowed inthe student market yesterday.Before Apple had a retail frontline, the company had many touch pointswith college students. Students made the iPod a success, laying theground for Apple’s later play in the mobile market.Youth have also been key in defining the experience of new productslike the iPad. Though industry analysts predicted users would favorfunctionality and business utility, research shows the most popular appsamong table users are actually entertainment and social tools (<1% ofapp use is “productivity apps” - source Flurry).As new competitors start expanding their Frontline presences, Apple willface an assault on its youth market position. The assault from thevolume players has already begun: in terms of smartphone ownership,Samsung now rivals Apple with a 24% share of the student market(source Forrester). This means Samsung and others are in a strongposition to challenge Apple’s traditional dominance of the youthsegment.
  3. 3. The next wave of competition will come from the software and servicesplayers who have a stronger presence in the youth market and moretouchpoints to leverage.RESEARCHApple needs to develop better insights into youth behavior to understandhow the customers of tomorrow will interact with the brand experience.Youth are more likely to use retail as a space for discovery andeducation. Where adults tend to shop on a transactional basis, youth aremore social, including friends in the shopping process both offline andonline.Youth trends identified in our research, e.g. “showrooming” and“hauling”, are key to influencing peers and the wider market. Youthextend the product discovery process beyond the storefront: they arethe most active creators (92%) and curators (77%) of online content(source MobileYouth Report 2013). That means youth retail experiencespills into the 3H (homes, hideouts and hangouts) and Apple needs toresearch how and why this process takes place.MARKETINGApple needs to go beyond its traditional Frontline if it wants to remainrelevant.Facebook, Amazon and Google are actively engaged with students oncampus (e.g. Hackathons), developing insights into how youth live theirdaily lives beyond the purchase. These Frontlines are not only cheaperand quicker to implement than traditional retail but appeal to the nextgeneration of customers who see their involvement in the process askey to relevance.If Apple continues to rely solely on retail it will slowly lose relevance withthe youth market, the impact of which will feed-through to the adult andbusiness market within 5 years. The danger for Apple is inoverextending its retail presence. Rather than continue to ramp up retail,Apple needs to be investing in secondary Frontlines (e.g. the homes,hangouts and hideouts) where it faces the greatest threat fromFacebook, Amazon and Google.
  4. 4. About MVenturMVentur is the world’s first youth mobile consultancy.We have 2 roles:1) Advisor to our clientsWe oversee marketing plans, act on advisory panels and consult ourclients. Find out more about our consultancy work.2) Commercial think tank for the mobile industryWe promote progressive marketing ideas that help mobile companies gobeyond advertising. Read more about our youth mobile opinion