Sales, Not Service At Target’s Apple Zones

January 7, 2012

Facing an increasing number of Genius Bar visitors and the resulting stress on employees, Apple has reportedly chosen to create store-within-a-store zones at a select group of Target stores, rather than open more of its own stores that would provide additional points of service and support. According to AppleInsider, Apple will install Apple-branded zones within 25 Target stores over the next year, in cities that don’t currently qualify for a stand-alone Apple store. Neither the locations of the stores or their selection criteria has been revealed. Presumably the zones will be staffed by Apple Sales Consultants (ASC), Apple-hired and trained employees who have been staffing some of Best Buy’s Apple zones for several years. Apple has said that it will open only about 10 U.S. retail stores this year, preferring to emphasize international expansion. That slow pace of U.S. expansion means that Genius Bars at existing stores are even more crowded. Service and support at Apple stores is arguably the most critical element of the company’s retail operation, providing quick solutions for customers and creating customer loyalty. Update: On January 12th Target confirmed that it would install “expanded displays” of Apple products in 25 of its stores. However, a spokesperson declined to further describe the arrangement with Apple or what the displays would look like and which products would be sold.

The AppleInsider story doesn’t speculate on how the 25 Target stores will be selected. However, Apple enthusiasts in small cities and towns should probably not be optimistic about receiving a store, since population has been a relatively small factor in the company’s siting formula. More relevant are proximity to registered Apple product users, universities, economic demographics and a region’s retail traffic patterns.

The store-within-a-store concept was born from the notoriously poor customer support and bad product maintenance provided by authorized resellers, including CompUSA, Sears, Good Guys, Circuit City, Office Max and others. At one point Apple installed ASCs at CompUSA stores to improve marketing support. However, one by one, Apple de-authorized these resellers in the 1990s, eventually leading to the creation of Apple’s own retail operation in 2001.

Most recently, Best Buy has been Apple’s favorite big-box reseller, selling laptops, iPads, iPhones, iMacs and iPods from the Apple zones, the widest product range of any reseller. The zones are staffed at least part-time by an ASC, who typically maintains the displays up to Apple’s brand standards and answers customer questions. However, the ASCs perform no sales duties, but instead pass paying customers off to in-store personnel.

Target has been a major reseller for Apple for iPods, iPads and iPhones, and has Apple-branded graphics and displays within certain stores. However, their stores have never been an exemplary marketer of Apple products. Live products are rarely displayed on counters for hands-on use, empty shopping carts frequently block the locked cabinets of Apple stock, and store personnel are hard to find. An October 2010 article on IFO noted that Target stores had been approved to sell iPads, but also noted the retailer’s poor product displays and inattentive personnel.

An analysis by Experian in 2010 showed which Apple-loyal areas of the country do not have an Apple store, including Baltimore (Md.), Charlottesville (Virg.) and Lafayette (Ind.). Two cities on the list without an Apple store—Boise (Id.) and El Paso (Tex.)—have since received a store.

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{ 4 comments… read them below or add one }

James January 7, 2012 at 0750

> An October 2010 article on IFO noted that Target stores
> had … poor product displays and inattentive personnel

Target is mostly self-service and Apple products are only a tiny percentage of its merchandise, so of course you won’t have the same level of display and service that you would in a dedicated Apple Store. No surprise. And Apple obviously knew this when they originally partnered with Target.

But if Apple willing to create a store-within-a-store with “Apple-hired and trained employees”, then great, that’ll be a nice improvement.

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HD Boy January 7, 2012 at 1210

An Apple retail expansion did not surprise me, especially with all the rumors of new HDTV products and Apple’s very limited retail presence in smaller U.S. markets. Apple would have to greatly expand its retail presence to enter the HDTV market in a serious way. Watch for more announcements.

The move to Target is a bit of a surprise. Since Apple’s Ron Johnson moved to JC Penny, I’ve been half-expecting that company to branch out and add the “Apple Store within a store” concept. I’d also like to see Apple move back into Costco. The iPhone, iPod, iPad, iMac, Mac mini, AppleTV and of course, HDTVs make for a great retail product lineup.

This also could be a pre-emptive move in preparation for the possible failure of Best Buy, which has been in the news lately due to sinking financial results.

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Nick January 7, 2012 at 1930

Doing boutiques in Target will allow them to go into the smaller markets that don’t justify a full-scale store.

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Actual Baltimore shopper January 9, 2012 at 0813

Baltimore has an Apple Store – Towson.

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