The first two Apple Stores opened in Virginia and California in the US on 19 May 2001 amid some harsh skepticism. 12 years later the skeptics have been proven wrong, Apple has the most profitable retail store chain in the US, about 400 stores worldwide and plans to open another 33 or so next year.
Wondering what Apple’s recipe for success is? A video has emerged in which Apple’s ex-Retail guru Ron Johnson discusses the philosophy of the Apple Store.
According to figures from research firm Retail Sales, Apple’s stores earn the more per square foot than any other US store, by a wide margin. At US$6,050 per square foot, Apple earns more than double what Tiffany manages (at US$3,017 per square foot). According to the figures, Apple sees an average of 100 million customers every three months and each of those customers spends an average US$45.
Yankee Group’s Carl Howe told AllThingsD: “Apple’s retail sales figures are nothing short of astronomical. In a world where Tiffany sells diamonds and manages annual revenues of roughly $3,017 per square foot according to RetailSails.com, Apple’s retail stores average twice that. Said another way, Apple products are more valuable than diamonds – at least to the retail trade.”
The news of the success of Apple’s store comes despite this year’s disruption in the Apple Retail department, with Rob Johnson’s replacement John Browett apparently being fired after a catalogue of errors that seemed to happen after he took on the role.
Apple Store: it’s the building and the experience
Apple believes that it’s not just the products but also the whole retail experience that it offers that has lead to its success. An internal video from 2011 has appeared in which Apple’s ex-Retail chief Ron Johnson and his colleague, vice president of retail development, Bob Bridger talk about Apple’s Retail philosophy.
“We discovered that if you can tailor a store uniquely to its setting it can actually improve communities,” is Johnson’s claim.
He describes the process that Apple goes through when selecting a location for a new store, and how Apple lets the location dictate the look and feel of the store.
“It’s about getting out into the street”, says Bridger. “Feeling what the locals feel and trying to unlock what they miss.”
Once Apple has found the right location the company decides what kind of store to create. This could be “something very modern, like Fifth Avenue…” or “something very historic, like our store in Regents Street,” says Johnson.
The result will be: “Something specifically created for that location, for that market, for those customers” adds Bridger.
Apple’s Covent Garden store is put under the spotlight in the video, with an interview with the architect who describes what he likes about the store and how there is a “kind of grit” to the building, which he tried to preserve. The important thing being not to “try and make it something it isn’t.”
“Our primary objective is to create a place that people will love.”
Apple describes the Covent Garden store, Apple’s 300th store, as the “Best store so far because it’s got all of our thinking from the 299 steps that preceded it.”
Other than creating a building design that suits the area, Apple’s retail philosophy is also to create an experience for the customers. In each Apple Store “half the physical space is devoted to ownership experiences” explains Johnson. “It’s about creating a great experience once you’ve bought the product.”
“Most retailers view their space as the square footage they rent. We view our space as the environment we inhabit,” says Johnson.
You can watch the video here.