Why Apple stores are raking in bags full of cash and nobody can crack the code

“Apple’s stores are leading the retail industry in revenue per square foot, and none of its competitors seem to be able to crack the code,” Geoff Duncan writes for DigitalTrends.

“According to RetailSails, Apple Stores generate more revenue per square foot than stores operated by high-end jewelry retailer Tiffany & Company. That would be impressive in its own right – Tiffany & Co. is the leading retail diamond merchant and came in number two in RetailSails’ metrics,” Duncan writes. “But Apple didn’t just beat Tiffany, it trounced the poor jeweler: RetailSails estimates Apple stores pulled in $6,050 per square foot, compared to $3,017 per square foot for Tiffany & Co. Other retailers didn’t even come close.”

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Duncan writes, “Given that Apple stores have been around since 2001, why haven’t other retailers been able to copy the experience and try to beat Apple at its own game?”

Read more in the full article here.

Related articles:
Apple Stores dominate retail with double the sales per sq. ft. of nearest rival, Tiffany & Co. – November 13, 2012
Apple Inc.: The most profitable retailer in America – August 15, 2012
Apple’s retail juggernaut is magical and revolutionary in its own right – May 25, 2011
Apple Retail Stores hit 10th anniversary (with video of Steve Jobs’ tour of 1st store) – May 18, 2011
Apple Store: ‘The best damn retail experience in America!’ – December 2, 2010
Apple’s retail stores generate huge sales – December 27, 2007
Piper Jaffray finds ‘gravitational pull’ at Apple Retail Stores – November 26, 2007
Apple thinks different with cash register-less retail stores that bring in billions – November 23, 2007
Apple makes retail seem ridiculously easy – May 29, 2007
How Apple’s Steve Jobs is revolutionizing Manhattan retail – May 08, 2007
Fortune: Apple Inc. is America’s best retailer – March 08, 2007
How Apple Retail Stores beat Best Buy, Neiman Marcus, and Tiffany – December 19, 2006

53 Comments

    1. Yes, YOU have “cracked the code.” All the stuff mentioned in the article is VERY important. But it’s NOT more important (for generating sales) than actually having products customers want to buy.

    2. It’s easy for Apple to maintain sky-high revenue per square foot when the stores are always jammed with people. Could this be a reason why Apple is slow to expand the sizes of existing stores—that topping Tiffany’s is high-luster free P.R.? On the other hand, doubling the store footprint with the same customer volume would halve the revenue ratio, and the headlines would trumpet imminent doom. At least until additional folks showed up. “Nobody goes there anymore. It’s too crowded” – Yogi Berra

      Another reason to leave the old stores alone is that opening new stores has higher marginal value. Not only does it expand Apple’s geographical reach, but also every opening is a spectacle, generating more free press coverage and arousing consumer interest.

      Still, those old, crowded stores need attention because ultimately Apple is a brand, one that needs sparkle to work its magic. Apple’s focus seems to be on conquering new lands, but it needs to keep the home fires burning too.

        1. Naaa… we did very well (or were very lucky) the first time around. Unlike our esteemed “leaders” of the past century or so, Ol’ George knew when enough was enough.

          It’s just been downhill ever since then.

        2. Botvinnik, please keep reminding us that we live in a new world where Emporer Obmambo from Kenya is the new brown messiah surrouded by his criminal gang and we must all lean forward daily to receive his filthy communist blessings shoved up our ass.

          All hail Emporer Oscumbo the Kenyan!

        3. Ubermac — So much small-minded poison; so little ability to articulate anything meaningful.

          “This is a Mac news site. On that count alone, fuck off.”

  1. Wall Street insists Apple’s days are nearly over because most consumers will be buying $50 Android smartphones and $100 Android tablets because they’ll be getting more features for less money. This is supposedly the last Christmas for Apple’s high sales. It’s being claimed that there’s nothing left in Apple’s product pipeline because Steve Jobs is no longer alive.

    When a company such as Apple only warrants a P/E of 12.94 yet Microsoft has a P/E of 14.97, you know Wall Street has already declared Apple as having nearly no future.

    1. Do you even have a clue as to what your talking about when it comes to Price to Earning ratio?
      As far as who’s selling more, anyone who’s relevant will pay up for quality. All others will settle for android. Btw market share of the Zune…,er, um Lumia phones will eat away at android more so then iPhone. Now go and run along 🙂

    2. And yet, somehow Apple continues to have record revenue and earnings each year-over-year quarter. Apple has historically only come out with a new direction in technology every 5 to 7 years. They just comparatively recently introduced the iPad. It’s a bit pre-mature to say they’re out of ideas.

    3. Too bad there is no connection between the real world of the marketplace and the fantasyland of Wall Street.

      We all might be far better off if there were… by which, I mean Wall Street being connected to reality.

    4. PEG (ratio of P/E to growth rate) is a better metric than just P/E. A high or low P/E can be justified by circumstances, or it can be driven by unreasonable pessimism or irrational exuberance. When you compare a company’s P/E to growth, you get a better idea of whether the company is over or undervalued relative to its past (trailing) or estimated future (leading) growth rate. Apple has grown very fast over the past five years, and it’s PEG shows that it has been consistently undervalued. The market drivers cannot seem to believe that Apple’s revenues and profits can continue to grow year over year, even when faced with reality. As has been demonstrated, we know a lot more about Apple than does Wall Street.

  2. Its a lot of things. The Genius Bar breeds trust, and that is marketable, because people will buy where they trust, plus real ly top quality service. I went in to buy an iPhone, and put it off for three days, and the gal who waited on me KNEW that I had been there a few days before . There was a hitch in updating with Verizon and she stuck with me. I never have that kind of retail experience anywhere else. And when my five year old iMac locked up, I went in and the guy cleared the problem in 10 minutes. Yea, the products are unmatched, but why would I ever consider buying elsewhere?

  3. It is because companies have a hard time turning away from dollars and cents and towards customer service. The difference is company culture. No one motivates you like yourself, and when you are in a culture that focuses and customer service and not dollars and cents, you end up with success.

  4. This is hardly news. Apple Stores have been leading retail for years now.
    Maybe the real news is that they continue to do so and signs of slowing down are not occurring.

  5. .. you know like all the other electronic retailers

    I bet it will STILL outsell the other dudes, perhaps not to the level of twice Tiffany’s but still outsell them.

    that’s because they have products people WANT

    man, people line up on start day at run down god awful ugly miserable phone stores to get an iPhone, and others go there every day to see if they have stock. The reason those phone stores don’t make more per square foot is that they also have bins of black berries etc that nobody wants that they have to write off , deal with android returns (many times higher than the iPhone) and waste time on support ( “how do I load my desktop MS Office onto this Windows Phone? Windows is unified right? )

  6. The code is simple. Go into any Apple store. Clear one table off, then place one of each Apple hardware product on the table. You will have room left, yet in that universe of products on the table there is something that everyone, from a kid with $50 to a middle schooler with $300 or a college student with $1200 or just about anyone with any money, would want and have their lives enriched by having it. There is no other store in the country that can make that claim.

    Personally, I’m avoiding Apple Stores right now, because I know the next time I walk through the door it’s going to cost about $3000 to get back out. In the past six months Apple has made every one of my very capable pieces of Apple hardware seem old, heavy and clunky. And they’re accelerating the process!! Damn you, Tim Cook and all your toiling minions!

  7. It’s because they’re invoke in illegal activities!
    By bringing in the foreign cash and redistributing it among the various stores, circumventing the tax code and the legal system.

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