Apple believes its own-brand retail stores work – and that they boost sales of company products for retailers in the areas where stores are in place.
Apple's VP retail Ron Johnson explained the company’s philosophy yesterday at Providence's Success by Design Conference, according to The Providence Journal.
Johnson – who was hired for Apple by CEO Steve Jobs from Target where he had worked before – was the main instigator behind Apple's retail stores look and feel. He told the conference that Apple's "science museum-like" stores "work".
The report says: "Johnson said he told Jobs that he didn't want to create just another computer shop. Johnson's challenge was to come up with something different". He came up with the sparse, design-influenced stores, "the idea was to make customers feel that they are in a public place" the report adds.
Though the stores all have stock on hand, a tiny 25 per cent of their floor space is dedicated to products, leaving the rest filled with the specific feel Apple wants to create in-store – and the hopes and dreams of Apple's customers.
"We wanted an atmosphere that was inviting, not intimidating, forward-looking, warm, interactive," he said. "And it makes you feel intelligent just by being there."
As with all retailers, store success is measured with cash – and tills are expected to rack-up $1.2 billion in revenues this year, for $30 million in profits (plus a manufacturing profit Johnson did not discuss). Average revenue per square foot is a whopping $3,000 a year.
Johnson also claimed that Apple has gained a small percentage market share in areas where stores are placed.
Despite the success, investors and industry-watchers were unconvinced that Apple's retail strategy would work, when Jobs announced it three tears ago. With tech stocks on the auction block, declining PC sales and failing Gateway stores, prevailing wisdom was that the move would fail.
Johnson said: "Steve's a pretty persuasive guy, but I don't think he convinced one person in that room".
Apple now has a store in Tokyo's trendy Ginza district, another in Osaka (along with rumours of a second soon), and the company will open a retail outlet on London's Regent Street later this year. Reports persist that it intends launching shops across Europe in due course.