In the face of a U.S. Supreme Court decision last week that employee security checks are not compensable activities, the plaintiffs in a lawsuit against Apple have told the court they will not oppose a motion to dismiss their federal claims for back pay. Instead, two former California retail store employees say they will continue to pursue their claims under state labor law, which doesn’t quite correspond with federal regulations. Dean Pelle and Amanda Frlekin filed their lawsuit in July 2013, saying they should have been paid for the time it took waiting for and conducting Apple-required “bag checks” whenever they left the store. The plaintiffs claimed they sometimes waited in line for up to 25 minutes at the end of a shift or at meal breaks. The lawsuit was certified for class action status earlier this year, meaning it could be applied to all of Apple’s retail store employees. In the meantime, a lawsuit filed by Amazon distribution center employees over the issue of security checks had been moving through the federal appellate courts. That case reached the Supreme Court earlier this year, and the court issued it’s ruling last week. In a brief (pdf) filed Monday in response to the Supreme Court decision, the plaintiffs in the Apple lawsuit said said they will not oppose a dismissal request. Last week Apple filed its own brief (pdf) about the Supreme Court decision, pointing out how it applies to the Pelle-Frlekin lawsuit and arguing the federal case should be dismissed. The court has set a December 29th deadline for final briefs on the case, although Apple could file a formal petition for dismissal at any time.
Despite the frequent re-use of architectural elements at Apple’s retail stores, there are some stores with unique features, and in one case a very surprising feature. Along the exterior stone wall of the New Haven (Conn.) store are mounted 12 steel shields representing the residential colleges of Yale University, which owns the Apple store property. No other store in the chain has such a feature or, in fact, any object attached to the store, either representing Apple or another company or institution. Yale University has an unusual structure: 12 small colleges with their own names and faculty, intended to provide the students with a small-school culture. Each college is represented by a distinctive, multi-color shield design. The Apple store shield versions were designed and created by Yale alumnus Jonathan Corum, a former student of legendary data visualizer Edward Tufte, and now science graphics editor at The New York Times. On a Web page describing the shields Corum wrote, “The challenge was to distill the designs down to one metal and one color: blackened steel on pale limestone.” They were mounted at eye level along the 64-foot long stone wall about two months after the store opened in 2011. They were positioned by age and name, with the oldest college at the front of the building, with room for new colleges towards the rear of the building. The shields and the adjacent walkway are visible through the large windows of the adjacent Yale bookstore. photo
Scores of people protesting the death of a New York City man at the hands of police marched into the Fifth Avenue Apple retail store Friday night, walked around the store for several minutes, and then held a “die-in” to commemorate the man’s life. The visit, along with several others over the last four years, seems to signal a change in how protesters bring attention to their causes, using high-visibility Apple stores as their targets instead of taking direct political action. Over the past five years Apple’s stores have been visited by protesters representing labor unions, corporate tax objectors, advocates for minority hiring and China factory working conditions, and even zombies. Friday’s protest was related to the recent deaths of men at the hands of police officers in several cities across the country, but specifically focused on a grand jury’s decision not to indict an officer in the death of Eric Garner last July. The protesters also visited several other retailers along Fifth Avenue during their march. read more…
Job announcements for two new positions within Apple’s corporate retail team indicates the company is sharpening its focus on relationships with customers and employees, to include updating the existing Net Promoter and other survey programs. The position descriptions don’t provide any clues why Apple has become more interested in customer and employee feedback. However, employee discontent with wages and working conditions is well known, and customer complaints about Genius Bar wait times and obstacles to making purchases are documented daily on social media Web sites. The two positions were posted earlier this month—Customer and Employee Insights Leader, and Employee Feedback Research Analyst. Both positions are based at Apple’s headquarters in Cupertino. For the Leader position, Apple says, “The candidate will lead a team responsible for feedback design, collection, analysis, as well as reporting and insights for both the customer and the employee experience.” It mentions the existing Net Promoter Score (NPS) survey program, and then adds, “We aim to significantly update it.” The Leader will “work with stakeholders to develop a comprehensive vision & deployment plan for the new system and work to continuously refresh it (ongoing).” On the other hand, the Analyst position, “will have a hands-on, leadership role in maintaining and improving Apple Retail’s employee experience measurement system and program, based on the Net Promoter Score.” It describes Apple retail employees as “very passionate,” and a candidate “should be able to convey that deep enthusiasm with understandable, insightful and actionable information.” Both positions require significant education and experience. Download (pdf) the two job descriptions for more details.
Even with 22 stores in the greater Los Angeles area, Apple’s retail team has been on the search for the perfect flagship store location for years, and now they may have found it. Incredibly, a tipster says the company has signed a lease for “several hundred thousand square-feet” of space inside the historic Broadway Trade Center in the city’s downtown, which lately has been blooming with redevelopments. The Downtown Examiner Web site says the leased space will constitute an Apple “campus” with offices, residential space and retail areas for both Apple and the newly-acquired Beats brand. The building dates to 1908 and was the May Department Store at one point. More recently the 1.1 million square-foot, five-story building has been occupied by dozens of small “swap meet” vendors on the ground-floor and light manufacturing on upper floors. The location may make sense for Apple—several other properties in the area have been refurbished and upgraded under a 10-year, public-private “Bringing Back Broadway” project to revitalize the downtown. There’s no timeline on when renovation on the building might begin or when the Apple facilities might be completed. photo
It may be difficult to understand—or even believe—that there is close-knit employee culture beyond the shiny products on wood tables inside the Apple stores. But in fact, there is. The hiring, training and management of employees stresses a team structure, and tends to create a close group of workplace colleagues, if not outside-work friends. So when an employee decides to leave the job, it’s a significant event, if only because he/she is moving on to a higher-paying job. This video appeared on YouTube showing the last exit for an unnamed employee at the Rio Shopping (Spain) Apple retail store, and the resulting “clap-out.” Visitors to the store seem bemused, while the departing employee hugs his colleagues goodbye. It’s a common event at Apple stores around the world, but infrequently documented from beginning to end.
Apple has taken the next step to merge its on-line and retail store customer support systems, apparently hoping to filter out unnecessary Genius Bar appointments for trivial and non-Apple problems, but without solving the on-going congestion caused by walk-ins without appointments. According to insiders, as much as 30 percent of store visitors are bound for the Genius Bar, where 350 appointments are managed daily at typical mid-sized stores. As outlined by 9to5Mac, under the new support system, when you visit the main “Support” Web page and navigate pages of advice and alternative methods of solution, you eventually land on a page that offers the choice “Visit the Genius Bar.” However, that choice is on the second row of options, beneath the “Recommended” option of “Send in for Service.” Selecting the “Visit…” option displays a map of nearby Apple retail stores. Once you select a store, you’re asked to log in to the Concierge reservation system using your Apple ID. The same support protocol is used when accessing the “Genius Bar” button directly on individual store Web pages. Since the retail stores first opened in 2001, millions more products have been sold and the Genius Bars have become a more popular destination. The debut of the iPod and iPhone in particular caused a huge spike in Genius Bar visits. As the number of appointment requests has increased, appointment slot times have decreased—there were no standard durations originally, then 15/20-minute times were set for mobile/desktop problems. About two years ago the slots were shortened to 10/15-minutes to create more slots. Even so, there are never enough slots to accommodate both those who made appointments and those who have not. screen shot
A French government privacy agency has warned Apple to adjust the video surveillance systems at four of its retail stores, saying they are too intrusive by constantly watching employees beyond the public retail space. The Commission nationale de l’informatique et des libertés (CNIL) said if the company doesn’t comply, it could be subject to fines. The involved stores are Opéra, Rosney 2, Bordeaux and Parly 2 stores. Every Apple store around the world has a video surveillance system to protect the company’s assets and employees. The systems routinely cover the front-of-house space accessible to the public, but also the Genius Rooms, hallways, product stockrooms and other back-of-house areas. In the U.S., federal law generally allows video surveillance of employees, except in restrooms or other private spaces. However, most European countries strictly regulate the permissible extent of workplace video surveillance. In this case, the CNIL said, “Surveillance is carried out disproportionately to the purpose of preventing harm to people and property,” and called it “an affront to privacy.” They ordered that the cameras be repositioned, or the video framing be masked to provide sufficient employee privacy. In addition, employees should be instructed as to which areas are monitored and which are not. The commission made a similar finding about the surveillance system at the Louvre store in 2013, and the store’s cameras were adjusted. Download (pdf) the commission’s decision (en français).
Amid the announcement of very positive quarterly financials results for both Apple and its retail stores today, company executives revealed a major change in how retail profit and loss will be reported starting in fiscal 2015—the company will no longer break out the results separately. Instead, retail store financials will be reported within the company’s existing geographic segments, ending the 13-year practice of allowing investors and analysts to judge the figures and make quarterly comparisons. Executives didn’t immediately explain why they decided to cloak its retail store financials, and if other figures such as the number of employees or store visitors will continue to be reported. During a conference call with analysts, CFO Luca Maestri said Apple generated overall revenues of $42.1 billion in the quarter and a profit of $8.5 billion. The retail stores posted revenues of $5.133 billion, up substantially over both the previous quarter (25 percent) and the same quarter of FY 2013 (15 percent). Maestri failed to provide the routinely-provided retail segment’s profit, perhaps a lead-in to the future reporting change. details
Two years after pushing the boundaries of the Apple store region northward to include Sweden, the company is making plans to expand the chain into the adjacent country of Finland, the most sparsely-populated country in the European Union. In fact, with just 5.5 million residents, Finland would be the smallest country on earth with an Apple store among the 15 countries now being served. According to sources, Apple is taking steps to prepare its point-of-sale (POS), personnel scheduling, Concierge and EasyPay computer systems to operate in the country, including software translations into Finnish. The next steps would be to establish a legal presence in the country, locate appropriate real estate for a store, and arrange for store construction. Finland has very well-developed technology and science industries, supported by a highly-educated workforce. Also, the country’s average Internet connection speeds are among the Top 10 worldwide, helping make computer and smartphone use nearly universal. And the country’s average disposable income is above the EU average, making it an attractive sales location for Apple. Because the Finnish store plans are so preliminary, it’s unclear where or how soon a store would open. However, it’s likely the first store would be in the Helsinki region, and it could open in late 2015.
In a unusual but understandable twist, the Apple Watch made its retail store debut not in one of Apple’s own stores, but under glass inside a Collette fashion store in Paris on Tuesday. The public event included invited guests from the world of fashion, Apple Sr. VP Design Jony Ive and newly-hired designer Marc Newson. It’s the first time the company has used another retailer to pre-promote a product and, significantly, was Apple’s first entrée into the world of fashion retailing. The Apple Watch won’t be available until early 2015, and there’s wide speculation about how and where it will eventually be sold. However, it’s nearly unanimous the watch will have to span both the tech and fashion worlds in order to succeed, explaining its appearance at Collette. That tech-fashion connection was foretold by the hiring of former Burberry exec Angela Ahrendts and former Nike social media guru Musa Tariq earlier this year. All three collections of the Apple Watch were on display under glass at a single wood table, similar to the Fetzer-made display tables used at the Apple stores. The watches were held upright by curved and polished steel rods. Tiny brass plugs filled holes in the wood not occupied by a watch. The one-day display attracted a long line of the curious during the city’s fashion week, including a few who were allowed to try on an Apple Watch. The display also generated a Tweet by CEO Tim Cook, “Amazing to see the excited crowds today in Paris to preview Apple Watch for the first time.” photos/video
The Fifth Avenue Apple store in New York City is arguably the most iconic retail space in the world, and a new book describes how it was the collaborative creation of two great—and sometimes contentious—personalities: George Macklowe representing real estate and Steve Jobs representing technology. The store’s success was nearly immediate, since it attracted 50,000 visitors a week after it opened in 2006, and generated $1 million in daily. Macklowe sparked the idea for an Apple store on the plaza of the General Motors Building on Fifth Avenue, and “pestered” former VP Real Estate George Blankenship for a meeting with Jobs, the books says. Eventually Macklowe was invited to a meeting with Jobs, but they developed completely different designs for the store’s entrance. Macklowe wanted a 30-foot glass cube set at the front property line next to the sidewalk. Jobs’ version of the entrance was 40-feet tall and set in the middle of the plaza. Macklowe ordered full-size replicas built on the site using scaffolding for a secret midnight evaluation. When Apple’s real estate design team saw the two sizes compared, they realized that Macklowe’s smaller glass cube was the correctly proportioned design. It took just 30 minutes for the companies to complete a deal, the book says. Macklowe then convinced several existing retailers beneath the plaza to move to accommodate Apple—”I did them favors; they did me favors,” Macklowe told the author. Later, Macklowe’s real estate attorney lamented that he had negotiated such a “horrendously low” percentage rent with Apple. But back then no one was sure how much business the store would do. As it turned out, customers were spending $1 million a day in the first year of operation. Read an excerpt of the book “The Liar’s Ball: The Extraordinary Saga of How One Building Broke the World’s Toughest Tycoons.”
After working 10 months to obtain construction permits for a landmark retail store in downtown San Francisco, Apple is now trying to convince the city that seven tulip trees need to be removed from the side of the building before construction can begin. But even with a company promise to eventually replace the trees after the store is finished, officials of the city’s Department of Public Works were skeptical of the proposal during a hearing earlier this week. Apple intends to demolish a large existing building on a corner parcel overlooking Union Square, and construct a huge, cantilevered glass structure with two levels of retail space. The trees would be obstacles for construction equipment on one entire side of the site, the company said, and a hired aborist told the hearing officer the trees were not in good health and needed replacement anyway. But a DPW spokesperson has said the tree are mature, healthy and should be retained. Apple submitted plans (pdf) for the store last year that included landscaping information, including new trees around a refurbished public plaza at the rear of the proposed store. San Francisco is very serious about its street trees, and requires permits for trimming or moving them, and fees for removing them. The process includes a city inspection of each tree requested for removal, posting of a removal notice on the tree and a 30-day comment period. Any public objections generate a public hearing. In any case, a DPW hearing officer makes a recommendation and the Public Works direction makes the final decision—which itself is appealable. It’s not clear how long the hearing officer’s decision will take. Demolition has not yet begun on the existing building, but when complete it could take a year of construction before the new store opens.
A former professional basketball player was arrested Friday by police in Arizona, charged with stealing $14,000 in Apple products by pretending to make EasyPay product purchases with his iPhone, and then simply walking out the store. Rex Chapman, 46, visited the Scottsdale Quarter (Phoenix) store seven times over the summer, police say. He would take out his iPhone, pretend to scan product bar codes, and then confirm an EasyPay transaction. He took the stolen items to a pawn shop, police claim, and exchanged them for cash. Police investigators arrested him without incident while was driving his car, but didn’t say exactly how the theft was eventually detected. Investigators did say that the crimes came to light last month, and that several employees recognized Chapman because of his sports status. Chapman played NBA basketball from 1988 through 2000 and reportedly earned $22 million during his career. Apple debuted the customer version of EasyPay in November 2011 to counter criticism from customers, mostly well-informed, ready-to-buy types with no time to track down and deal with a Specialist. A buyer simply opens the Apple Store app, scans the product’s barcode, and confirms payment using their existing iTunes credit card information. The process takes just seconds, but is limited to items under $125. An EasyPay purchase alert immediately appears on the iPad screen of a store employee working “point.” However, absent any observed irregularities, EasyPay buyers are never asked to display their on-screen receipt when leaving the store. In fact, an Apple retail senior director once famously testified in a lawsuit that the stores didn’t have a theft problem and loss prevention was not a high priority. It’s that ease-of-purchase procedure that apparently allowed Chapman to take out several high-priced items on each visit that would have been impossible to purchase via EasyPay because of the price limitation. Chapman faces nine counts of organized retail theft and five counts of trafficking in stolen property, all felonies that include prison sentences if he’s convicted. Update: Here’s a list of the dates and amounts of the alleged thefts. Police later released an Apple store video surveillance clip which police say shows Chapman in the Scottsdale Quarter store. video
The days of enthusiastic overnight lines for the opportunity to buy one of Apple’s new products now seems overwhelmed by line-sitters hoping to buy iPhones and turn them into instant cash. This year’s debut of the two iPhone 6 models created overwhelming crowds, with hundreds in line at smaller stores and almost 1,900 people by one count at the high-profile Fifth Avenue (NYC) store. The lines were divided by store staffers into two camps: those who had purchased on-line and came to pick up their iPhone 6, or walk-ins. That latter category, supplied with cash by mystery men, seemed to be the un-enthusiasts. There was true Apple loyalty and excitement at most stores. CEO Tim Cook threw open the front doors of the Palo Alto (N. Calif.) store, while Sr. VP Retail Angela Ahrendts attended the debut at the George Street (Sydney) store. But it was perhaps New York City that epitomized the trend of moving from true product enthusiasm to financial gain, created by a staggered country roll-out and under-supply of the iPhone 6, which creates an opportunity for third-party profit. Based on that financial model and using purchase techniques honed in China and Hong Kong, ordinary people at the SoHo and Fifth Avenue stores—and at many others—were offered hundreds of dollars if they agreed to sell the iPhone they had waited days in line to buy. Those middlemen will then make thousands selling the smartphones to exporters who quickly send them overseas where the iPhone 6 models are not yet available.The practice has been common abroad for years and occasionally seen in the U.S. But this year’s waiting lines seemed to ratchet up the scalping, as documented in a video by Casey Neistat. His six-minute video profiles the SoHo waiting line, the heavy police presence, an arrest, and how the phones were bought two-at-a-time with cash and then handed off. Apple took action after similar paid line-sitting sprung up in China and Hong Kong for new iPhone 4 models. To combat the practice, the company created a on-line purchase, in-store pick-up requirement in China that ended fights among scalpers and broken store windows. More significantly, the purchase requirements ended the independent entrepreneur activity in front of the Apple stores, which the Chinese government generally finds inappropriate for its economy. video/photos