“Apple’s retail business has fallen into relative stasis. Its per-square-foot sales are still the envy of retail–just over $6,000, about twice what runner-up Tiffany records–and net sales rose 7% in fiscal 2013, but per-store numbers were flat, since Apple opened 26 new stores during the year,” Jeff Chu writes for Fast Company.
“Morale has flagged as the retail operation has struggled first through a season under an ill-chosen leader and then a year without any chief at all,” Chu writes. “As envisioned and created by Apple mastermind Steve Jobs and his retail lieutenant Ron Johnson, the stores’ design and customer experience were radical, ‘but they haven’t progressed that much in the past five years. If you’re not reinventing your experience every five years, you’re behind the curve,’ says a longtime member of the retail team. ‘Competitors have been trying to emulate Apple’s retail experience for quite a while, and Apple’s been lucky that nobody has done it better. But that’s not a great position to be in, where the competition just sucks more than you do.'”
Tons more in the extensive full article – recommended – here.
[Thanks to MacDailyNews Reader “Lynn Weiler” for the heads up.]
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I despise this negative crap… “relative stasis” at levels all other businesses an only dream of! Sheesh!
Compare what he wrote, so negatively:
“Apple’s retail business has fallen into relative stasis. Its per-square-foot sales are still the envy of retail–just over $6,000, about twice what runner-up Tiffany records–and net sales rose 7% in fiscal 2013, but per-store numbers were flat”
With how the same facts can be written about in a positive manner:
Apple’s retail business continues at mind-boggling levels previously unimagined for any retail business. At just over $6,000 per sq. ft, Apple’s sales are the envy of EVERY high-end retailer in EVERY business sector. Now Apple wants to take its retail business even further.
And this hack expects Apple to respond? We’ll put JS.
I’m with you John. Everyone else in retail wishes they had half the success that Apple stores have. That said, it doesn’t mean that they can’t improve. I do believe that she’s able to do something dramatic regarding a retail stores. Hopefully it will turn out in a positive manner. You don’t know until you let her try. But she could be the spark needed to take their stores to an even higher level? But only for so long. At some point things will flatten out. At some point competitors, at least one of them, will make inroads into Apple’s retail kingdom. Nothing lasts forever. No one stays on top forever. Hills and valleys. For everyone. But I believe Apple Store has a way to go before they reach the top of the hill. She may be clever enough to give them a big push.
I noticed that negative spin on a positive as well, if these idiots don’t find a negative truth they take a positive and try to convince you it’s a negative. Unbelieveable!
The only reason, and it aint bad reasons, why Apple Stores do 2X better than Tiffany is:
1) more expensive items (on average)
2) larger market (kids and adults, men and women and both)
3) repeat business
How many wedding rings and jewelry do people want and buy compared to the number of gadgets a person wants and buys (plus accessories)?
The only competition to Apple Retail is Apple on-line sales and authorized resellers (online and brick and motar – non of which has a Genius Bar). So the only way to improve Apple Retail is to improve the customer experience which, no doubt, is affected by employee morale.
The only way to increase sales per sq foot is to increase market demand (ie advertising / better product). Some or most of this is not under Ahrendts’ control.
So if Ahrendts keeps the statis quo then that’s not bad. Better than going downhill.
If it aint broke how much needs fixing? Yes, Ron Johnson went all radical with Penney’s- that sure was effective! “Others suck worse than Apple’s stores?” Who says Apple’s stores suck? At all?
Somebody to expect to repeat the trick is dangerous as it seldom works out. Too high expectations will lead to disappointment how good she may be. Lets see how things develop…
The trouble with so many AppleStores-in-a-store, is that companies use AppleStore-inspired setups all over the place, even displaying Samsung hardware on the same tables (that were built under Apple specs to be allowed to sell Apple products).
Regardless whether I disagree with the initial premise of this article—the fabricated on relative “stasis” and whatnot—I think Cook nailed it with this hire. She’s going to be amazing. And kudos for finding not just the best talent out there, but for (1) poaching the talent from another international corporation and (2) selecting best talent that also diversifies Apple’s leadership.
the fabricated bit***
It’s interesting that she would go from a CEO to a SVP.
The allure of sweet opportunity excites the well-adjusted, the accomplished, and the rich, for worthy challenge is a prize beyond mere mastery.
That must be why the typical academic career line goes:
Asst —6yr→ Assoc —10yr→ Full —30yr→ Emeritus
(or if ideas disappear Full —10yr→ Vice Chancellor)
😆
We were talking about the real world, not the academy.
She went from CEO of a <$2B/year fashion company to Senior VP of the retail operation of a $170B consumer electronics company.
With Apple, she gets the opportunity to further the retail division of one of the most recognized and successful brands in the world.
She was a big fish in a little pond at Burberry. With Apple, she's a little smaller fish, but managing a lake.
I agree, her resume looks promising and I look forward to seeing what she does with all this power. But she needs to borrow Marissa’s infamous Red Ball to really get some PR going. ; )
Face it. Those stores could be shaped like the Oscar Mayer wiener mobile and we’d still go in because the stuff is in there. I walk into an Apple store and the only thing I see is Apple products. Sometimes I take a look at the number of people in there or see what’s new on the accessories wall, but I’m there to buy gear. So it will be interesting to see if she can get me to go for any other reason.
I’m thinking that Angela’s job will be to bring those who have not yet come in to the Apple Store in to the Apple Store as opposed to bringing you or I in.
Amazing TED Talk by her in 2013: http://www.youtube.com/watch?v=mZNlN31hS78
Ahrendts is an excellent hire. She has a proven international track record with a premium brand.
Cook is putting his stamp on Apple’s senior management.
I just hope the mall stores in medium sized cities get an up grade to larger spaces… pretty simple move, but more space for genius bar, one on one and more room to maneuver. My local Apple store is always packed, Saturdays being elbow to elbow. Most malls have vacancies, It would be a great first move.
So you know that $6K per square ft. in sales number that looks so good? Well, if you double the square footage in order to give people more elbow room, you cut that number in half. Wouldn’t Wall Street have fun with that?
Wall Street can suck zeroes.
I have seen many a thriving business significantly increase their floor space and then go belly up. Apple is finding ways to reduce the transaction times (a lean approach), mini kiosks (iPads) at every showroom product, and scheduling of genius appointments to keep things flowing,
Processing more transactions by increasing the speed of them can prevent spending capital on more brick and mortar. Another reason Apple continues to grow their cash pile!
I was in the Lego store at Rock Center a week ago. Every time I go in there I’m amazed that they haven’t yet picked up on the idea of allowing customers to pay for their purchases from the smartphones, or have roving salespeople with the ability to do so as they have at the Apple Stores. This store is always crowded beyond belief, and, to check out, you have to go from downstairs, up a flight of stairs, to stand in line in a cordoned off area, like a Disneyland ride. It’s just amazing that it takes other retailers so long to get the idea.
First of all she has to put a stop to bozo workers that have been hired in many stores. I have been to three different stores in my area and I have been absolutely astounded by what I have heard from some if the employees.
Once I overheard an employee remark, “…..I don’t know how that works, I an HP guy myself…..”
Another time I was looking at the iMacs and next to me was a girl who was just dying to buy an iMac. She was really quite excited. An Apple employee comes along and for the next five minutes I hear him go into all kinds of twisted arguments (like you would expect from a PC windows moron) on why it may not be the computer she wants. I just had to walk away because if I hadn’t I may be in prison today. Every time I think about this it makes me ill just thinking how many people he tells this to every day.
On yet another occasion one employee was trying to sell this customer (who seemed to know nothing about computers at all) a 32GB memory stick as a backup disk.
@ Paul. No offense, but honestly I’m a little skeptical about the veracity of your comments here. There have been articles written in the past indicating that Apple is so selective in its hiring that statistically, it’s easier to get admitted to Stanford than hired by Apple! I visit and shop at numerous Apple stores all over the US and many foreign countries and in my experience (as a sometime retail manager), the quality of Apple’s service and employee helpfulness is peerless, especially for its size. As many have mentioned the most authoritative metric for retail performance is sales-per-square-foot. By this metric Apple retail leads in the US, not by just a little, but by DOUBLE! the number two, Tiffancy and Co. When you said the Apple employee suggested a 32 GB memory stick, I become especially skeptical because Apple stores don’t sell memory sticks! Some stores look like Apple Stores but are not real Apple stores. Please make sure you don’t confuse the two.
I have read so much about Ms Ahrendts and have seen her Ball State U commencement address and other lengthy interviews. This is an absolute brilliant hiring coup on Tim Cook’s part. This is in part to expand Apple into China more forcefully where Burberry had 70 stores and Apple only has 10, presently.
Jesus fucking Christ! Why would I make this up? I know an Apple store when I see one. I live in fucking NA not china, I own two iMacs, three Apple tvs, countless iPods, 6 iPhones, and four iPads. I have been there enough times to know one,
And yes, they do sell memory sticks….just go to the part where they shelve hard drives….right next to them and adjacent to the MacBook covers and bags,
Ahrendt’s the real thing. After she starts fasten your seatbelts, the stores will never be the same. I predict she will be running the whole company within the next ten years.
She certainly looks the part of a hip, smart, and successful manager (as she’s already proven). And Apple needs somebody “Different” to re-energize its retail group. I’m going to be rooting for her success.
I just wonder how much you can transform the retail experience.
It just seems like she is being set up for failure based on insane expectations.
I have that thought a lot, in so many different situations. Sometimes it seems to me that all life and commerce is an elaborate setup, and the only difference between the winner and the fall guy is timing.
Fate and circumstances. Fate and circumstances. You’d be surprised.
Jeff Chu’s article is very well worth reading in full. He demonstrates an excellent understanding of what Apple is about and what Ahrendts can bring to the company.
There were a number of aspects of the article that jarred with me, but then I realised they were quotes from other people. “If you’re not reinventing your experience every five years, you’re behind the curve”. That quote really seemed wrong because it seemed to advocate change for the sake of change. If you’re already leaving your rivals in the dust, the chances are that you have a winning formula, so while that formula should always be under review, it should only be changed when you have a better formula.
The quotes from other “retail whizzes” in the sidebar were mostly laughable and put me in mind of how wrongly the retail experts judged Apple’s entry into retail, predicting it to be an expensive failure.
Chu’s clear understanding of Apple was obvious when he pointed out how Ive and Ahrendts share many values and if they get on well together, they will each inspire the other and Apple will benefit enormously. I think it’s also pretty obvious that she shares similar values to Tim Cook too, which also bodes well for the future.
She has accepted a huge challenge and from what I have read of her, she will not only rise to the challenge, but take it further.
The full article is a must read. If she can tie Brick & Mortar to online, get along with Ive and find an equivalent ” sidekick” to Bailey, look out!.
She seems to have an innate ability to connect with customers and employees alike.
rmgt008 posted this above: http://www.youtube.com/watch?v=mZNlN31hS78
I sense a leader with more than just revamping retail stores in her future with Apple. I have not read the article yet, I will do that shortly, but based on this TED Talk, she might just be what Apple has been missing internally for quite a while now.
Many people here are positive about her, and I went into watching that video prepared to poopoo all over the buzz (I enjoy being an outlier), but even more than being an outlier, I get interested when the majority of people suddenly seem correct. How often does that happen? 😉 Not very.
I have learnt that you are a proper skeptic, an attitude I believe is critical in supporting the emergence of anything great. Without a probing at the edges we have a lazy complacency, a regression to the mean, opportunism, exploitation, mimicry.
Yet here you are, giving her the benefit of the doubt, on the basis of a tentative if heartfelt speech. Is it something of a magic touch that has given you pause? I only wonder because, although I approved of of her fashion decisions at Burberry, I am unaccustomed to positive male reactions to her management philosophy. I want to think it is all not about gender-specifics, and more about universal values.
Why mess with sucess?
Why mess with success?
I’m sure JCP thought the same thing when Ron Johnson came aboard.
He would do for them what he supposedly did for Apple.
Interesting tidbit in this article that Jony Ive was in the camp against aggressive selling by Apple retail employees arguing that the products should sell themselves. I have a feeling he and Angela Ahrendts will work well together.
The fundamental problem is that “the market” has this idea that unless you’re growing you’re dead.
Purchases are increasingly online. Apple’s stores are possibly at a level that you can’t reasonably earn any more from them individually, they’re packed, and selling at levels that other shops would kill for. At a certain point any increased value comes from their role as a demo centre, as an advert, for people to then buy online.
Personally I have no real reason to go to an Apple store, I know I’m going to buy an iPhone or a Mac, the only question is when (when I have the money and when my previous one is at least a few years old), and exactly what spec. Since I will typically do upgrades ordering online is easier, plus I hate shops full stop.
Just opening new stores is not the answer, if you open them too close together you risk just spreading out the same customers.
You’re only behind the curve if other people have overtaken you and have actually given you something to follow. If everyone else is miles behind you then you are still the curve. It’s the same as the argument that Apple don’t innovate. Even if they don’t (which they do) then neither does anyone else, and comparatively they’d be regressing.
She was/is a merchandiser. Its not a big deal. I work in the rag trade and she’s a dime a dozen. I really don’t see where with all her background in fashion- from Donna Karan – Liz Claiborne how thats going to help Apple. She’s a garmento pure and simple . I don’t frankly see her lasting there long because these two businesses are extremely different – there is nothing similar. She’s going to be a fish out of water.I could be wrong- but I don’t think so.
Also having been in the “rag” business for many years (and now IT), I agree with you. In fact, I cannot envision ANYONE stepping into this role with any success if the thought is that this person must somehow reinvent Retail with the result being skyrocketing sales. While I agree she is probably a great candidate, I think the expectations are simply too high for anyone. All that typically happens in Retail is that the new leadership comes in and redesigns the store’s floor plan & style thinking that it will drive new sales. What is being lost on Apple is that there was so much pent up demand, the first stores surged at the same time new market leading products were being introduced. Barring some new product class (like TV), I cannot see where anyone will make a dramatic difference in sales. Maybe morale will go up, but that’s about it.
“But that’s not a great position to be in, where the competition just sucks more than you do.”
Proof this journalist is smoking crack.