So Bill Wilson starts his day at the Wichita Eagle (Kan.) by talking to Apple reseller Richard Haddock, who said he expects Apple to locate there at some point. Haddock closed his Oklahoma City store in May, “because the market wouldn’t support three Apple retailers.” Now he’s afraid he’ll have to close his Witchita store, too. So then Wilson calls up Apple for comment and reaches retail PR manager Amy Barney. She tells him, “Our vice president for retail, Ron Johnson, has said often that there is evidence third-party retailers benefit from the corporate stores.” Read Wilson’s entire piece here.
She Said, "He Said"
Big Event Goes Flat
Apple’s “Showtime” event turned out to be far smaller than the hype had predicted. On the other hand, what could possible met the expectations of the world’s Apple fans? The speculation has been fantastic, and the work on Photoshopped possibilities has been endless. But even so, what did Steve Jobs really end up showing? A much smaller shuffle mp3 player…ah, that was about it. The upgraded iPods were pretty much zero, as was the re-packaged nano–which looked like the iPod mini redux. And the iTV thingy…well, exactly what was that they were showing? A mock-up? And after you ponder that, focus on the products’ availability: iPods and nanos now, but shuffle not ready until later, and the iTV not ready until “1Q07!” You may recall Apple used to announce products at Macworld Expos, and they wouldn’t be ready to ship for months. Jobs stopped the practice, moving announcements to mid-year to coincide with the actual ship date of new products. But that policy seems to have been scrapped in this case. We got two rehashed products, one new one that won’t ship until October, and another that doesn’t even work yet (in public). It was deflating. [Get yourself a one-day chart of Apple's stock on Sept. 12th and guess when Jobs began his speech!]
Dell…Lots of Stores
Just for perspective, consider electronics retailer Best Buy: they have 771 stores in the U.S., along with 20 Magnolia Audio stores, 14 Pacific Sales showrooms and 12 Geek Squad stores. And stores in Canada an China. They opened 245 new stores in the past 12 months, of which 17 opened during the latest quarter. I wonder how much more difficult it is to operate 711 stores than it is to operate 163? Does the required energy and coordination continue to increase with the number of stores, or does it eventually flatten out?
Dell Store Numbers Don’t Make Sense
The big mystery about Dell’s retail store plans continues…today Ro Parra, senior vice president of Dell’s home and business group, told reporters that the company will evaluate and learn from its first two stores (Dallas now, NYC in 2007), and decide on an expansion strategy. However, he said Dell had no plans to sell through big-box retailers like Best Buy. Parra, said the single store’s performance was exceeding expectations–presumably because they have pretty low expectations. Of course, he didn’t mention profitability. If you’re still skeptical of Dell’s initiative, consider the numbers: Apple sold 216,000 computers through 146 retail stores last quarter, contributing 16% of total revenue. Put another way, that’s about 16 computers (avg.) a day per store during the quarter.
To match that revenue contribution by selling only CPUs, a single Dell retail store would have to sell 29,352 computers every day the store is open. Now, if Dell wanted to increase their revenues by just one percentage point, that single Texas store would still have to sell 1,835 computers every day. [Math based on avg. $854 consumer computer price, $14.1 billion in revenues.]
And even if Dell opens 100 stores, in order to match Apple’s 1% revenue contribution, Dell would have to pump out 18 computers each day. That’s still more than Apple’s chain is selling, which has 161 stores. What’s the possibility of that any time soon–or at all?
Working Out the Kinks
So, a friend tells the story of buying an iMac. She wanted a wireless keyboard and mouse for an iMac 17″/1.83 GHz, so on a busy Friday afternoon the Mac Specialist says they just received an iMac shipment, and haven’t unpacked the boxes, so didn’t have an iMac wireless model available. Could you come back? She arrived on Monday afternoon to hear another Mac Specialist explain there’s no such thing as a wireless version of the iMac–you buy the wired version, and then simply add the wireless keyboard and mouse for extra. So she buys the computer and AppleCare, and gets the rebate printer, and heads home. Only when she started setting up the computer did she realize…no Bluetooth is included for the 1.83 MHz version of the iMac 17-inch. Yikes! Fortunately she knew someone with an idle Bluetooth dongle, and so the wireless capability was easliy activated. But…whew! It seems like a little more work than it should have been. Apparently there isn’t universal familiarity with the new Intel iMac models.
Nokia Customer Service
The magazine Fast Company has an annual issue on customer service, and ranks the best companies–Apple didn’t make this year’s list. But they did include Nokia among the Honorable Mentions of the “Customers First” awards, noting the company has opened 25 “Experience Centers” around the country. “But there’s a twist: the 25 Experience Centers around the country don’t sell anything. And that means no commission,” the magazine notes. About one-third of the store’s 1,250,000 visitors (since Jan. 2005) are directed to nearby cellular stores to sign up for service and buy phones, the article notes. Winston Wright, Nokia’s exec in charge of Nokia’s retail initiatives, said, “We want the guest to take us where they want to go, then start talking really deeply about the features of that device. It is a little opposite from what you’re accustomed to.”
Air Travel Companion
One of my most-needed travel accessories is a pair of Bose QuietComfort 2 noise-cancelling headphones, especially when you travel nine to 12 hours by air to an Apple grand opening in other countries. Simply turn them on, plug them in and the jet engine and passenger noise disappears almost completely. And you can very clearly hear the in-flight movie or music, instead of a blend of “whoosh-h-h” and the sound system. I sometimes get nods from flight attendants, who recognize the headphones’ excellent capabilities. One time a flight attendant acknowledged how well they drowned out the sound of crying babies. The only possible drawback is the size of the headphones–they fit entirely over the ear, so are necessarily large. But now Bose has introduced V3 of the headphones, which is an on-ear model and is much smaller to pack. Shure markets a complete line of noise-cancelling earphones that are extremely compact, and are of the in-ear variety. Some of the models start at $109 and range up to $500 or so, but if you travel by air, they’re worth every penny.
Holyoke Mall Rated ‘MB-18′
The Holyoke Mall at Ingleside (Mass.), site of a future Apple store, has a “must be 18″ policy, restricting visitors on Friday and Saturday, from 4 p.m. to closing, to those 18 or older. Technically owners Pyramid Management Group calls it a “parental escort policy.” They don’t uniformly enforce the policy across their mall portfolio, which includes 20 malls in the northeast. The policy states, “One parent or guardian (21 years of age or older) is permitted to supervise up to five teens. Teens must remain within the company of their parent or guardian.” The policy does not apply to the movie theater or stores with an outside entrance. Several groups have criticized this and similar policies as being too restrictive against people under 18 years old.
Great Source of Web Site Links
There are a perhaps over 35 million Web sites, making it almost impossible to find anything interesting or meaningful. But now there’s an assistant: StumbleUpon. You download a tiny plug-in for your Firefox browser, and then click on the button to be presented with the next in a series of pre-ranked sites that are considered Five Stars. You can select any combination of various categories of Web sites to see. Either way, the sites you’ll visit have a higher probability of being interesting and relevant, something that random surfing just doesn’t provide. If you stumble across an unranked site, you’re prompted to submit a review. There’s so much great design out there, along with some pretty fantastic Flash programming. There are also some interesting concepts for the Internet, including JumboFile, a site that let’s you post files for download, in exchange for viewing some advertising before the download. Or check this fascinating multi-user site for some fun.
Dell Store Leader
You may know that when Apple wanted to dip its toes into the retail waters, it hired Stanford/Harvard graduate Ron Johnson away from retailer Target to get the process started. Retailing is a pretty serious, complicated business that must take into account a broad range of issues: site selection, real estate, architecture, construction, staffing and supervision, product display, sales and service policies, customer behavior, and cashiering–and that’s the short list. So when Dell Computer decided to crank up a retail operation, where did they reach out to find someone to lead their retail initiative? Jim Skelding has a B.S. degree from Northern Arizona University, and has held various posts with Dell, most recently the General Manager of Asia Sales, based in Penang (Malaysia). He’s described as director of Dell’s retail stores, and has been the source of all the PR about the store. But beyond that, there’s no mention of him on Dell’s Web site and, in fact, little mention of him on the Web in general.
A Store…In Detail!
First, I acknowledge that I operate a Web site devoted to Apple’s retail stores, and admit to everything associated with doing so. But even in my wildest writings I can’t come close to the buzz going on at the yelp.com Web site–it’s off the charts! Visitors to the San Francisco store are discussing their experiences, and they don’t leave out any details, both physical and emotional. Note to Olivia: everyone is staring at the merchandise, girl.
Stores Key to Customer Service?
Is it possible that Apple’s retail stores are the secret to its every-increasing customer service satisfaction? The authority on the subject, the University of Michigan’s American Consumer Satisfaction Index gives Apple an 83 rating, up 2.5% from last year’s rating. Ranked behind Apple are Dell (78), H-P (75), Gateway (73) and H-P/Compaq (72). Personal computers in general received a 77 rating in the university’s yearly rating, while “electronics” received an 80 rating. So, is it the stores? Actually, Apple’s rating fell in the period after its retail stores first opened in 2001, but then jumped 4 points from 2003 to 2004, and has inched up since. None of the other computer companies has ever been over 79, never seeming to gain any momentum on customer satisfaction. Check the latest figures and draw your own conclusions.