“From the very beginning, Apple’s retail stores were intended to both be a showcase for the company’s products and a place where communities would form,” Gary Allen writes for Forbes. “But until now, we’ve only known about the success of the former goal, and not the latter. ”
“Indeed, the retail stores generated $4 billion in profits on sales of $20.2 billion during fiscal 2013. But how many of the stores’ 395 million visitors during the year were actually paying customers? ” Allen reports. “During an appearance last month at a speaker series organized by Stanford University’s Graduate School of Business, former Sr. VP Retail Ron Johnson answered that question, and discussed his early career, the birth of Apple’s retail stores, and his ill-fated time as J.C. Penney’s chief executive.”
“In fact, Johnson revealed for the first time that just one of every 100 visitors to an Apple store makes a purchase. The other 99 are presumably heading to the Genius Bar, checking out new products, retrieving their email, tagging along with friends or relatives, or attending a training session or live music event,” Allen reports. “For those who follow Apple’s financials, that 1:100 ratio is even more amazing. Based on that figure, just 3.95 million visitors were paying customers during fiscal 2013 and, incredibly, their average purchase was $5,114.”
Read more in the full article here.
I would question that $5,000 figure unless Apple said that was the case. Seems a bit high to me as I don’t see too many people walking out with an iMac under each arm.
1 in every 100 buying a Mac would be very believable.
Something about that math is fishy.
This comes from “former Sr. VP Retail Ron Johnson.” The $5,114 number is crap based on crap.
When I go to buy a MBPro, I know I visit the store quite a few times trying various things including my own files I bring in and sometimes an application or two to try before I plunk down the money.
I only buy a MBPro once every 3-4 years, though.
And yes, by the time I buy, the top end MBPro with some spare charger, extnl HD, AppleCare, extra screen, mouse, headset and such, plus CA tax, it is easily way over $6k.
Many times, I am just in to ask a question of a sales person, but it is never an idle question. It is one which I couldn’t find an answer to, often associated with a major OS upgrade.
BoC, I am willing to believe you are not alone in your buying habits around Apple gear. What I am not willing to believe is that you represent an “average purchaser”, which is what this article seems to indicate. I believe the article is way off from the true average purchase.
EXACTLY KingMel, as I elaborate below…
This isn’t actually any kind of reliable statistical analysis. It starts out as just an anecdotal figure, then extrapolated to a be applicable to a year of sales when the source of the anecdote source was NOT WORKING at Apple. IOW: No valid statistical analysis was even possible.
IOW: Amusing but not based on meaningful data.
Sorry, I have source hiccups source.
It’s wrong common sense tells you that.
Think Different
Nuts.
And I’m not the only one who buys online, collect at your nearest Applestore where they back up your old machine whilst you go for a coffee.
$5,114 ?…you’d need a pallet truck
$5000! Yeh, sure it was Ron. Yet more evidence you don’t have a clue.
For all we know, Ron was attempting to provide a reliable figure. But it would have been for the period he was working at Apple. He was NOT working at Apple in 2013. Why Gary Allen who writes for Forbes fiddled these numbers is beyond comprehension as they are guaranteed to be WRONG.
I hope Gary Allen who writes for Forbes doesn’t pretend to be an expert at statistical analysis or accounting. I’d never hire him.
While hard to believe, it’s not unrealistic. If the majority of people spent an average of, say, $300, but several spent $30,000 (eg. business purchases?), then it very well could balance out to an average of $5000.
Since we know how many Apple stores their are in the US and can estimate or find their square feet and they have published the $/sq. feet and the traffic to Apple stores is known, you could easily calculate some averages.
Kind of misleading, because the sales number of “$20.2 billion during fiscal 2013” was for a particular recent year. Ron Johnson probably did NOT say, “in fiscal 2013” just one of out 100 visitors made a purchase.
And I’m sure that 1:100 figure was meant to convey the point that MOST visitors came in and did not purchase, not that it was precisely 1 in 100. What are the chances that it was exactly 1 in 100.
I’ve made many purchases at the Apple Store, but it’s for something relatively small. iPod+Nike kit. Apple AA battery charger. Keyboard. Trackpad. Snow Leopard. iLife. I think the most expensive thing I purchased at a (physical) Apple Store was an AirPort Base Station. So, If that $5000+ figure is actually true, there would have to be customers making $10,000 purchases to “average out” customers like me. HIGHLY unlikely.
Truth is people come in with friends. Plays with stuff. No one harasses them to buy stuff or BS customers to buy. All friendly staff really want to just inform and educate if they want to.
These people then come back ready to buy! Again and again! 😊
Dummies!
Sometimes it pays to click the link and read the full story:
“that figure is skewed upward by a combination of non-visitor sales, including those made from the store-specific Web sites, business purchase orders and other sources of orders.”
Awwww, it’s more fun to give my uninformed hypothesis judging other uninformed hypotheses.
Community. And what does that mean? That all those folks who go to an Apple store and don’t buy anything are somehow part of some club? Company stores are marketing exercises. Apple stores are good at it. Community? Bullshit.