Remember: Apple retail is about people, not profits

By Jonny Evans

People, not profits, are the secret of the Apple [AAPL] success in retail, stressed the company's retail chief, Ron Johnson, back in 2004. This weekend we see Apple's tenth anniversary move as it introduces a new retail concept the Mac-blogosphere has helpfully dubbed "Apple Store 2.0", an upgrade so compelling some witty store staff have described it as being "like switching from a PC to a Mac".


[ABOVE: The grand entrance to Apple's Regent Street store.]

iPads get everywhere

Realistically, the move is far less drastic, though no less pleasurable. Staff are moving from an in-store system based on an iPod touch to one that's based on iPads, which will be in the hands of shop floor staff starting this weekend, reports claim.

What's happening (apparently): Sunday, May 22, Apple will begin making changes in its retail stores, doing so on a Sunday rather than the anniversary date (yesterday) in an attempt to avoid business disruption.

However, there's no doubt footfall will be higher than normal starting this weekend as curious Apple folks pop by to see what's happening.

They'll see retail store workers walking around brandishing iPads equipped with RetailMe, Apple Connect, Apple Directory, Concierge and the Easy Pay application, "as well as the standard Mobile Genius and iRepair," says 9to5mac.

Apple payment systems? Lion? Nada?

RetailMe is the software carried aboard the iPod touch units retail staff carry around the shop floor. These machines make sales -- the addition of the EasyPay application is generating questions, like: 'Is Apple about to seed some contactless payment solutions, or perhaps use another payment system for the move. Perhaps from Visa/Square?'

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We've already heard that NFC adoption has been slowed by the lack of compatible payment terminals. An Apple move matches one by Orange and Barclaycard who launched contactless payment systems in the UK today.

[ABOVE: Apple CEO Steve Jobs introduces the first ever Apple retail store. Look at all those software boxes. In a year or two you won’t see them in Apple retail stores any more. You’ll get it all from the Mac App Store.] 

There's some unsubstantiated speculation Apple may tease all of us with something it has never done before: namely, installing Mac OS X Lion on machines across its stores. Apple has never -- never -- made its OS so public and available in advance of launching the software.

If it happens -- and it never has before, so it's a big "if", the move will enable Mac users everywhere to explore the new iOS/iPad-inspired features Apple has promised to bring to the system. And I don't think it is going to happen.

Apple's ability to ignite rampant speculation with something as essentially uninteresting as a change in the B/OSS ordering systems in its shops (which is all the iPad move is, if you think about it) is impressive in itself. It is perhaps another example of the marketing talent of Apple's Phil Schiller.

Retail is about people, Apple is about people

It also reflects the power of the brand. The company has consistently handled its brand with expert ease. News this week that Apple products inspire an almost religious awe in users is no great surprise -- the company works hard to reach them.

Apple's retail chief, Ron Johnson, visited London's Regent Street to open the company's first UK store in 2004, where he talked to us about the meaning of these places.

"Apple's stores have always been about being more than a store. Our goal is to be part of people's lives, so we need to locate our stores to be part of their lives. We were thinking about a London store, and we wanted it to be on London's busiest street," he said.

The store is also a product. Apple sits at a moment where liberal arts meets technology meets people. Its stores aim to reflect this customer-focused, enabling experience: "Half the store is products, the other half is about what you want to do. Music, video and more," Johnson said.


I spoke with Apple's lead architect, Peter Bohlin of Bohlin Cywinski Jackson. He told me, "This is really about people, more than things. Steve has always said he sees himself as at the nexus of technology and art, and I would add, people. We are at the point where technology, art and people meet."

There were recent reports as to how Apple operates as a business. One key element of this being that managers across the company don't handle financial problems -- those are left to the bean counters. This is central to Apple's philosophy. "We believe in doing well by doing good, we don't talk about revenue, we talk about pleasing our customers," said Johnson.

Does it work? Some stats:

  • Over 100 million people live within 15 miles of a store
  • Apple has around 1.8 million square feet of store space
  • Apple attracts around 13,400 people per store per week
  • Apple sold 797,000 Macs in its retail stores in its last quarter, half to customers who'd never used one before
  • The stores earned roughly $3.2 billion, about 13% of Apple's total sales in 2010
  • Apple's Regent Street store became the most profitable store per square foot of space in London in summer 2009.

Apple's first stores opened May 19, 2001, first in McLean, Virginia, followed later that same day by a store in Glendale, California. Today there are 325 stores and more are planned. Interesting, then, to reflect that when Apple went into retail industry observers condemned the whole idea as flawed.

As history shows, it wasn't.

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Copyright © 2011 IDG Communications, Inc.

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