How Apple Retail Stores beat Best Buy, Neiman Marcus, and Tiffany

“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.

45 Comments

  1. Hey Mister ‘Tang,

    You forgot to mention that the Microsoft store sells its software on a plethora of hardware. It’s all represented in the store even though it’s just a bit too confusing to customers.

    They’ve also included a Wizard Bar to answer folks questions about software security and explain how Vista makes it all better. It’s easy. Just buy one of the dozens of computers on display.

    Not all that confusing after all…

  2. I’m all for the Apple stores, don’t get me wrong. I got my Macbook Pro there. However, the sales per square foot leader moniker is a bit misleading. Apple has a limited product line, all of which takes up very little floorspace to sell. Plus, inventory is relatively easy to manage, or can be arranged for delivery if not immediately in stock. The advertising angle is huge, regardless of sales. I went to an Apple store 20 times before I bought my computer and played with ipods, macbooks, macbook pros, etc.. Plus, Apple stores are always in upscale centers. The walkthrough traffic is amazing. It suits the brand and strengthens it every new potential customer that walks through the door. It removes the “Techy” feeling of going to Best Buy or Fry’s to buy something. However, no other computer manufacturer could get away with it. How many people would be inspired to walk into a Dell store?

  3. Back to the article…

    It seems ridiculous to compare sale per square foot between Apple and Best Buy. Best Buy is about bargains on a much wider variety of merchandise. Compare BB with Costco or Circuit City, not Apple Stores. The comparison with Gateway is more on target and even more impressive. I admit that when Apple first said it was going “brick and mortar” I thought they must be high. Gateway was just then beginning to tank, and the internet store for electronics seemed to be a foregone conclusion. As with MP3 players, Apple proved that it knows how to reinvent what we think we already know and show us quality and innovation can create all new opportunity and success. I’m glad to have been proved wrong!

  4. Actually, I think it would be a wise long term investment to buy a Zune right now and keep it, unopned, as an investment. Fifty years from now it might bring a great price (along with the countless other MS flops) as a collectors item/museum piece.

  5. Allen not sure what your point is about a limited product line… If you are referring to the fact that it is only computer related, I still think they swamp a CompUSA competitor. As for the stores being located in “upscale centers” this is just not true. I have been to many locations across the country and most of them have been in your every day mall.

    I must agrees with everything else that you wrote. I feel so sorry for the Dell sales people at the Kiosk just down the mall from our local Apple Store (Knoxville, TN). People go by look at the Dells and are told that they will have to wait for their order to be built and shipped. All the while people are walking buy taking their new Macs home to use right away…

  6. Hey, very true about the Zune being a collectable. They are going to hit the trash bins and/or ebay auctions in large numbers about a month or so after Christmas. Every ebay Zune buyer will become an ebay Zune seller within a month of his original purchase. At some point they will be so cheap on ebay that it won’t pay for the auction add to sell them so the dumpster is the only place left. They will become scarce within a year. If you can pull a brand new one out of storage, still in it original package 50 years from now it will be worth a lot!

  7. People will always pay for quality. There rivals sell crap.

    I just got back 5 min ago from my local mall. There is an extremely busy Apple Store and a little Hell kiosk next the Sears. The Hell kiosk looks so pathetic with a couple of stragglers milling around it, I almost feel sorry for Michael Hell – almost. Best Buys numbers would be even worse if it weren’t for the windfall profits from unpaid rebates!

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    Rock on Steve!

  8. Candy store for geeks? What does that even mean? That Apple makes fluffy computers that aren’t serious machines?

    And out of all the computer stores out there, Apple’s customers are the least geekiest… I see grandparents and couples and kids all in there asking about photos and music and video making…. Certainly not typical geeks.

    Guess it’s just a case of bad writing…

  9. 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.

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