“Apple Computer has shown people will gladly part with money at its candy stores for geeks,” Scott Martin reports for Red Herring.
“But here’s a little-known fact: Apple’s chic stores don’t just sell more per square foot than even Best Buy, they beat some of the best in the luxury retail world silly, according to a report released Tuesday by Bernstein Research analyst Toni Sacconaghi,” Martin reports.
“Apple’s stores have hauled in annual sales per square foot of $4,032, compared with Best Buy’s $930, Neiman Marcus’ $611, and luxury store Tiffany & Co.’s $2,666, according to Bernstein,” Martin reports. “It’s a wild contrast to the failure of Apple rivals such as Gateway to break into the retail market.”
“Mr. Sacconaghi said that Apple’s retail stores have played a significant part in Apple’s success over the past five years,” Martin reports. “The analyst said Apple retail stores also had an influence on brand awareness. That brand awareness is equivalent to $60 million spent on advertising, he noted. Apple has 170 retail locations in four countries. The Mac maker has about 150 U.S. locations.”
Full article here.
“The previous Zune Tang was funny before the current imposter stold the handle and became a poor imitation of the original.”
I’m pretty sure there’s more than one impostor.
The Apple stores that I have been in around the LA area are all clean, the displays work and the staff seems polite enough. There isn’t enough staff however. I find that I usually have to wait patiently for a previous customer to ask tons of questions, and get tons of answers before I can get some attention.
I suppose that this is good, the customers end up informed, one way or the other.
Has your wife ever cringed at the thought of going into Best Buy?
“I’ll wait in the car, thanks.”
Kudos to Apple for creating a store for both men AND women.
Zune Tang,
Please never go away. I really enjoy your posts. I am a die-hard Apple fan, and I thoroughly enjoy every word of your posts. Please keep up the good work.
Jeff
ignore that last post by the imposter ZT!
I’M the real Zune Tang… no question about it. I just checked the name on my underpants.
Zune Tang,
Can you say “brown 3rd party conglomerate vaporware boutique”??
You’re hanging out here alot. I think you have a crush
on the Mac.
Can you say “denial troll envy”??
Seen one Zune Tang, you’ve seen ’em all. Honestly, I can’t tell the difference, they’re all uncompromisingly repetitive and monotonous. It’s the same mental vomit regurgitated every week.
Gone are the days of dusty Performas stuck in the back of Best Buy, with salesmen who had no idea why they were there. They didn’t really SELL macs in those stores. I’m sure that there was usually nothing you could ask the salesmen that would result in them recommending a Mac.
I bet some of those guys wish they had macs to sell now!
What! You mean stores having cluttered shelves with no room to walk, displays that don’t work, and no knowledgeable person to help can’t outsell Apple’s stores?
Sounds like the supermarket I go to, or Fry’s.
Analysts are always eager to praise or bash the vaunted “iPod Halo Effect” but in reality, Apple has probably gained as much traction with in areas it has it’s own stores. The experience is second to none, and after three visits inquiring about a Mac, most PC users switch.
This has little to do with iPod, and a lot to do with Apple marketing as a whole.
Damn. Zune Tang is starting to sound too bitter to be as funny as before. I hope he’s OK.
Maybe MS should open a store.
<tumbleweed> It would only need two shelves for each package of Office, XP and Visio. No PC hardware (too ugly) and no developers software (they’re competitors). All ten of their mice/keyboards and an XBox on the second shelf. </tumbleweed>
But there would be an empty Vista box saying “coming in January – pleeeeze wait and don’t buy a Mac”.
The telling statistic is that the “average” 6000 sq foot Apple store generates 2/3rds of the revenue of an “average” 38,000 sq ft Best Buy.
So Apple wins on sales per square foot, but Best Buy wins on sales per store.
So which would you rather have? A compact store, or more money?
Sales,
The margins at best buy are super thin compared to Apple. Best Buy requires short inventory turn times to generate profits, like a supermarket. So, Apple requires less inputs to generate nearly as much revenue. It’s not just about the money you make, but it’s about how much it costs you to make it. As far as the comment above in reference to Apple stores. Most of them are in upscale shopping centers, not next hunkered down in strip malls next to Radio Shack. At least in Los Angeles, you’re more likely to see an Apple Store next to J. Crew than Marshalls/Ross/etc.. I don’t know what Apple’s strategy is outside the West Coast, but it’s specifically geared towards attracting high dollar clients walking by, not bargain shoppers looking for a deal.
Why is everyone making fun of my Dad?
Don’t you know I’ve suffered enough as the illegitimate offspring of Zune Tang?
All those kids in school laughing at me…belittling me… Those cool kids with their Macbooks andf iPods… making fun of my Zune and my HP purchased from the cluttered aisles of Office Depot…. I hate you all!
Daddy, please come home…. You need to feed, clothe & house Mommy & me…
Do you think MDN will finally announce the 2 new games for the iPod today? A day Later than everyother mac site.
They beat Best Buy by not sucking. By not hiring a bunch of retards.
/they hire more retards now though
“Sales” seems to get it all wrong…. When he states “So which would you rather have a compact store or more money?”
This is not necessarily a valid question…
The biggest cost in retail is the lease/rent. Although Best Buy tends to be in more downscale strip malls, rent on a 38,000 square foot facility has still gotta be BIG…
Even if Apple is spending more per sq.ft. for being in a mall, I doubt it is that much more to make up for the cost difference due to the size of the respective stores… Factor in that Apple is able to generate 2/3 the sales revenue at HIGHER MARGINS in a much SMALLER space and I’d much rather be in Apple’s shoes….
I think ‘Sales’ uses way too a simplistic approach to analyzing the data…
“I think ‘Sales’ uses way too a simplistic approach to analyzing the data…”
I’d agree with that, but comment that also looking at sales per square foot is also too simplistic a way to evaluate any company.
In short, Best Buy’s total revenue is about one and a half times Apple’s. Best Buy’s margins are about half Apple’s. Best Buy’s shares cost about 5/8ths of what Apple’s do, and there are just over half as many outstanding. So when you slice and dice all of that, Best Buy and Apple generate about the same amount of free cash flow per share, and their accounting profits per share are the same. In that scenario, the only reason to buy Apple is an expectation of significant growth in Apple’s free cash flow.
Will that growth pan out? That’s the big question. the iPod may produce good unit sales numbers this quarter but most of the volume will be in shuffles and nanos. These are exactly the products which offer the customer no more functionality then an mp3 phone can, so Apple’s very vulnerable there. My guess is that with shifts in the mp3 market it’ll be all downhill in 2007 in terms of profit generated by iPods. Likewise Mac sales will ratchet up to a new level given it’s new Intel underpinnings and Windows compatibility, but that’s also likely to be a period of quick growth followed by a tapering off in growth.
So would I rather be in Apple’s or Best Buy’s shoes? Well they’re quite different shoes. I’d certainly say Best Buy is in a less vulnerable position than Apple. Conversely Apple has a much greater potential for growth (positive or negative).
“Even those ill-informed reports that iTunes Store sales were taking a dip were not just wrong, but the exact opposite of the truth. “
Actually that’s not true. What was stated was that the seasonal dip this year from Jan to June was much greater than the seasonal dip last year. That much seems to be true. Start of a Trend? Who knows (except Apple, and they don’t give investors that information).
Hi my friend wants to buy a macbook, is there much of a price difference when buying from Best Buy or the Apple Store?