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Monday, February 11, 2008

Apple Inc. Retail Strategy

Apple Inc. (NASDAQ:AAPL) retail strategy is studied at the big league business schools. The downtown storefront Apple retail stores really impress me. Forget about going to the Mall, head downtown, where people used to shop. Computer equipment presented like a Tiffany or Coach store shows jewelry, in similar locations downtown.

Even the Apple store lighting designs are impressive. No dark spots anywhere, even on rainy days.

For first-time Apple buyers at the downtown Atlanta or Manhattan stores, the perception must be similar to stopping in to pick up a diamond necklace or Burberry coat. Far different than entering a big box store like Circuit City or Best Buy. Certainly a major switch from buying a computer using a web page order form or telephone. Gateway's stores with no inventory left the buyer arriving home empty-handed. It was tough for Gateway buyers to explain to their wives that they just paid a thousand dollars for a PC that will arrive in a few days.

Dell buyers had web forms to interact with. Questions? Here's a FAQ sheet for you.

Prior to those experiences buying a computer meant accepting the junk on the department store shelves or going into the geek shops where the heavy-set guy built you a computer to-order from parts. "How much video RAM you think you need, man?"
Fun for me but so intimidating to many business buyers that they hired me to shop in PC stores for them. They still do.

Stores like MicroCenter and Fry's became popular for the same reason Apple stores are a retail computer buyer's mecca; if a buyer can get their hands on something they like they often will go ahead and buy it. If a buyer can get questions answered by a knowledgeable human clerk that speaks their local dialect, they feel better about dropping a thousand bills or more. If they can go back to the same store and get friendly assistance, that's even better.

Apple clerks do not know about future sales projections. That is not their job. However every Apple employee I meet knows the answers to Apple hardware and software questions or where to get the correct answer.

It is more difficult to look the clerk in the eye and say, "Nah, this Mac Air just does not meet my needs, I think I will go look at the Acer models." With Dell's old business model I just closed the browser window if I did not want to complete the sale. I never completed a sale at Gateway stores I visited, the employees only knew how to take orders.

Now we see Dell moving into face-to-face retail, wonder why?

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