Everett Katzen had every right to be nervous when an Apple Store opened last year, just a few blocks away from the downtown Philadelphia location where his Springboard Media shop has been selling and repairing Macs for 16 years. Apple Stores are retail juggernauts and tourist destinations. How on Earth could Katzen compete?
Easy. By offering lots of little things Apple Stores don't or can't offer: personalized service, faster turnaround, a wider selection of accessories. After a year of competition, Katzen is confident of his store's future.
"The word survive is a really scary word. It just sounds so negative," Katzen said. "I want to thrive. There's so much cool stuff an Apple specialist can do."
Ten years, more than 300 stores, and nearly a billion visitors after Apple opened its first retail outlet in McLean, Virginia, the landscape has shifted radically for the independent stores that once served as Apple's main bridge to consumers. Some independent stores have adapted and continued on. A few are simply hanging on. And a few others couldn't compete and went under in a blaze of recrimination and lawsuits.
"We were an Apple-only store ... as a single small business, an independently owned store, we had a very loyal following," said Andy Gold, who for 25 years was the proprietor of the Neighborhood Computer Store in Lakeland, Colorado. He shuttered the operation in 2006 and filed a lawsuit against Apple, which was later settled.
"I wish I could've kept doing it," Gold said when interviewed for this story.
Survivors say Apple's muscle isn't the only reason they've been challenged in the last decade--the rise of Internet retailing has also been a factor. But Apple Stores did change consumer expectations, making it difficult for independents to keep up.
"[Apple's] free tech help at the counter, with the Genius Bar, has changed the parameters of what people expect for help--that you don't pay, or, if you do, you don't pay much," said Andrew Moldvay, a part owner of The Total Mac repair shop in San Francisco. He used to have three employees; now he works by himself.
Whatever their grumbles, even independent retailers concede that Apple Stores are big, beautiful, fantastic consumer environments.
"They look good," Moldvay said. "It's a great way to sell computers. If somebody is wondering what computer to buy, I tell them to go down to the Apple Store."
Survive and thrive
How have the remaining independent stores lived to fight another day? A few themes emerge.
Do what Apple doesn't. When a customer leaves their Mac for repair at Springboard Media, Katzen's staff loans them a new computer to use in the meantime. That's a service people appreciate, and often leads them to trade in their old machines for the newer model. And when they do buy the newer model, Springboard offers a wider array of third-party accessories than can usually be found at the Apple Store. Katzen is also considering offering customers off-site backup of their Mac hard drives.
"The dealers that have done great," he said, "are the dealers that have pushed themselves to offer creative services or new services."
Repair-oriented shops say they can often do repairs faster (and on older-model computers) than Apple Stores do. Daniel Janish, CEO of Keane in San Francisco, said his turnaround time is often two or three days--and he's heard from customers that the wait at the nearby Apple Store can be longer.
That lack of speed at the Apple Store may be partly the result of their success. "I don't know if you've been into a major metropolitan Apple Store recently," Janish said. "It's ... hectic."
Don't treat Apple Stores as the enemy. Janish, in fact, operated his business entirely online until 2007--then moved into a brick-and-mortar location about 100 yards from a San Francisco Apple Store. Why? Because Janish was convinced he could capture overflow traffic of customers looking for his type of services.
"We saw the opportunity to open a retail store and actually made the conscious decision to open as close to the Apple Store as possible," Janish said. He walks over to the Apple Store once a week to chat up employees there. "We have a pretty good relationship with the local stores."
Katzen agreed. He's thrived by offering services that help businesses "implement" and use the fleets of Macs they buy at the Apple Store
"I don't see the Apple retail stores as a threat or an enemy. I see them as an ally. I think we can help each other's businesses go," Katzen said. "They're better at attracting a big client--they have the beautiful store and the prestige location--and Apple brings us the opportunity to do the professional services part. In a way, it's wonderful they're there."
Keep evolving. The independents say they've noticed that Apple Stores are continually evolving in the range of services provided. That requires the independents to stay on their toes. The best way to survive, they say, is to be as flexible and adaptive as the competition.
"You've got to continually evolve," Janish said. "We try to do the best job we can and let the work speak for itself."
As a result of those strategies, the independent Apple retailers are guardedly optimistic that they can survive over the next ten years.
"I don't believe we're extinct," said Alberto Palacios, manager of Create More in San Francisco. "We get a lot of customers who come into the store and say, 'I didn't think Apple allowed other sellers.' Others come in and say, 'Oh yeah, you were the Apple Store before there was an Apple Store.'"
Back in Colorado, Andy Gold has moved on. He has created a Website used by high school athletes and the NCAA to match students to college sports programs. But he remains wistful.
"I'm still a loyal Apple user," Gold said. "Everything related to my Website is such. My love of the Apple product has never changed, whether it's the iPhone, iPad, or iPod. That's part of my DNA, I guess."