What can retailers learn from Apple?
At the Goldman Sachs Technology and Internet Conference on 12 February, Apple's CEO Tim Cook said that the company's high street stores are "the face of Apple" and that he will continue to invest in them.
"There's no better place to discover, explore, and learn about our products than in retail," he said. "Our team members there are the most amazing, awesome, incredible people on earth. It's the best retail experience. It's a retail experience where you walk in and you realise the store is not here for the purpose of selling, it's here for the purpose of serving."
"And so the Genius Bar helps you not only with an issue, but it helps you get more out of your Apple products over the life of them," Cook continued. "The store acts as a gathering place. It's a place that has an important role in the community. And so if you look at an agenda on an Apple Store for any given day, you might find that there is a youth program going on where kids from a local elementary school are coming in the store as part of their field trip. You might find that there's a local musician that's entertaining people in that store on that night. It's incredibly exciting what these stores do."
Apple is working on expanding its international retail business, opening stores in a number of new countries including Turkey, Brazil and Indonesia. With 30 new stores planned, the total of Apple high street stores will be more than 400 across the globe.
Each of those 400 stores will see an average of one million visitors a year. Statistics show that Apple's retail stores are the most successful on US high streets, with seventeen times more sales per square feet than the average retailer. That's despite the company only having 12 years of retail experience, after launching its first two stores back in 2001, and its first European Apple Store at London's Regent Street in November 2004.
According to figures from Retail Sales, Apple's stores earn more per square foot than any other US store, by a wide margin. At $6,050 per square foot, Apple earns more than double what Tiffany manages (at $3,017 per square foot). According to those figures, Apple sees an average of 100 million customers every three months and each one of those customers spends an average of $45 (£28).
Yankee Group's Carl Howe told AllThingsD: "Apple’s retail sales figures are nothing short of astronomical. In a world where Tiffany sells diamonds and manages annual revenues of roughly $3,017 per square foot according to RetailSails.com, Apple’s retail stores average twice that. Said another way, Apple products are more valuable than diamonds - at least to the retail trade."
The news of the success of Apple's store comes despite last year's disruption in the Apple Retail department, with Rob Johnson's replacement John Browett apparently being fired after a catalogue of errors that seemed to happen after he took on the role.
It's about the experience
Johnson, who went on to become CEO of JC Penney, has said that the Apple Store has become the "most productive in the world."
In an interview last year, Johnson said: "People come to the store, and that's because the store offers something people need, which is really help and support and connecting."
"These Apple stores are like magnets for people," he continued. "If you really look at what happens in an Apple store, it's connections happening. It's a genius with a person trying to solve a problem. It's someone getting personal training. It's someone getting their products set up before they leave the store. It's someone learning something that might change their life."
The problem is that "very few retail stores have truly navigated this digital future and how digital and physical worlds come together," Johnson said. The physical store is "indispensible in a digital world", he said, adding: Historically stores have been designed to "pick something up. They're very transactional. They're not experiential."
These stores are competing with the internet where you can: "Search [for] anything you want, get it today from your phone and have it delivered to your door." The only answer is for the store to "offer so much more."
Johnson said that, for JC Penney, he would borrow Apple's successful Genius Bar concept. "Buying a pair of jeans is actually quite hard for people. There are a lot of fits, a lot of finishes. We're putting in what's called a Denim Bar with Levis," he explained.
Johnson also explained that JC Penney could save "half a billion dollars a year" currently spent on the checkout process. "Well that can be done through technology," he revealed. "You'll be able to check out anywhere anytime, from anyone including yourself, because we're going to roll out self checkout to our stores."
An internal video from 2011, which surfaced on the web in November, shows Johnson and his colleague, vide president of retail development, Bob Bridger talk about Apple's retail philosophy.
"We discovered that if you can tailor a store uniquely to its setting it can actually improve communities," Johnson claims.
"It's about getting out into the street," said Bridger. "Feeling what the locals feel and trying to unlock what they miss.
Once Apple has found the right location the company decides what kind of store to create. This could be "something very modern, like Fifth Avenue…" or "something very historic, like our store in Regents Street," says Johnson.
The result will be: "Something specifically created for that location, for that market, for those customers" adds Bridger. "Our primary objective is to create a place that people will love."
In the video, Apple highlighted the Covent Garden Store, which is described as the 300th store, and "the best store so far because it's got all of our thinking from the 299 steps that preceded it."
Other than creating a building design that suits its surroundings, Apple also aims to create an experience for the customers. So, in each Apple Store "half the physical space is devoted to ownership experiences," explained Johnson. "It's about creating a great experience once you've bought the product."
"Most retailers view their space as the square footage they rent. We view our space as the environment we inhabit," said Johnson.