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In the words of its 2005 annual report, "One of the goals of the retail initiative is to bring new customers to the Company and expand its installed base through sales to computer users who currently do not own a Macintosh computer and first time personal computer buyers. By operating its own stores and building them in desirable high traffic locations, the Company is able to better control the customer retail experience and attract new customers. The stores are designed to simplify and enhance the presentation and marketing of personal computing products." The report added, "The stores provide a forum in which the Company is able to present computing solutions to users in areas such as digital photography, digital video, music, children’s software, and home and small business computing." The company has now opened over 225 stores, including in Japan, Canada, the UK, Italy, Australia and China, and I've confirmed future stores soon in Germany, Switzerland and France. Apple's latest annual report states they'll continue capital expenditures for retail operations, indicating that they have a long-term strategy for opening more stores. Financially, Apple's stores has been steadily improving since they first opened: the number of visitors has steadily increased from 25.2 million in 2004 to 102.4 million in fiscal 2007. Store revenues have continued to increase during the same period, from $1.185 billion to $4.11 billion, now totaling about 17.1 percent of the company's overall sales. [charts & graphs] Perhaps most importantly, Apple's overall market share has reportedly increased since the retail stores have opened, perhaps beyond six percent. Apple now reports that "new to Mac" sales through the retail stores now is more than 50 percent. History So how and why did Apple invest in a chain of retail stores? In 1996 the "old" Apple announced it was going to open a chain of cybercafes, starting with one in the Los Angeles area. Yes, they intended to promote their own products, but also have Internet terminals available right next to food and beverages. Apple partnered with Landmark Entertainment Group to create the chain and even had some wild-looking renderings created. Obviously, the concept was never fulfilled. But you can just begin to see a spark of the retail concept that kicked off around 1999. You may know that Apple never sold directly to customers until the Internet revolution, when it began offering computers via its on-line store. Before and since that, Apple had only a network of authorized dealers who sold computers to customers, including to big corporate accounts. Apple is very particular about most aspects of its business--witness the fact that it manufactures both the computer and operating system so both operate smoothly together. Well, Apple had particular tastes for retailers, too. They attempted to make sure Macintosh retailers were dedicated, well-trained and focused on sales. They avoided the mass-market outlets, such as Target and K-Mart, even though they might have liked the traffic the stores received. However, they did dabble with two outlets that were considered more mass market--Sears and CompUSA. My personal experience with Macintosh marketing at Sears stores is probably representative of Macintosh sales during this era: I visited several stores in northern California during 2000 and 2001, and invariably found missing keys on the computers' keyboards, particularly the older iBook computers. There were very few models on display, they were usually tucked away in an obscure location, and there was never a salesperson who knew anything about the computers. The same problem was obvious at the CompUSA stores I visited, including the one in Emeryville (Calif.)-- which happens to be just one block from the headquarters of Pixar, where Steve Jobs works. Apple had apparently realized they weren't getting enough exposure in CompUSA stores, and so instituted a concept they called "store within a store." They put up giant posters over a corner (usually rear) of the store, posted Macintosh marketing materials, and displayed computers. But they left the area's maintenance and sales to the regular CompUSA staff. Again, the computers invariably had missing keys, shipping boxes were crammed into the area, merchandise was askew, and software was poorly displayed. Even worse, CompUSA employees were generally completely unknowledgeable about Macintosh computers and related gear, and would consistently steer prospective buyers to Windows-based machines, because the salespersons receive manufacturer rewards for selling Toshiba, H-P or IBM models, and the corporate margin was greater for those computers.
Apparently the first such store-within-a-store, or what some call a "vendor shop," was apparently at the Market Street CompUSA in San Francisco, which occupied its own 1,000 square feet along the front of the store, and had its own entrance. Interestingly, this store is just a few hundred feet from Apple's planned retail store that will open on Feb. 28, 2004. Apple took two steps to improve this situation: they fired Sears and other retailers in Feb. 1998, and hired Apple-branded employees to staff the store-within-a-store area at CompUSA to help keep the area clean, and to sell Macintosh computers. The Apple employees in CompUSA perked up sales, no doubt. At the least, the employee kept the Macintosh area clean, free of stored Windows PCs, and could answer questions from anyone wandering into the area-- and maybe even sell a few computers. (This concept of selling is active today.) Check this 2001 article by David Lang of the Christian Macintosh User Group which explores Apple's decision to enter the retail business, and this MacWorld article. By the way, Apple ended a contract with Best Buy around 1997 because of poor Macintosh sales support. Best Buy obtained permission to sell iMacs (the "flavored" variety) in October 1998, but was canned again in April 1999 over purchase requirements. BB wanted to purchase only some of the original iMac "flavors," but Apple insisted on selling only pallets of mixed colors. Best Buy obtained permission once more in Sept. 2002, this time to sell iPods, and Apple began pilot program with Best Buy to sell certain Macintosh models at 50 stores. But all this wasn't enough. Apple wanted to go even further. They wanted total, complete control of the retail experience, something they could accomplish only by opening their own stores. A Wall Street Journal article about the 2004 mini-store openings explained, "Mr. Jobs said that Apple wants, 'the best buying experience' for its products, and that most of the resellers weren't investing enough in their stories (sic) or making other selling improvements." They hired Ron Johnson (right) as vice-president of retail for Apple in Jan. 2000. He was formerly vice-president of retailing for Target stores, and brought a tremendous amount of experience to a company which had never directly marketed its products. He's also a Stanford University and Harvard University (MBA) graduate. Previously, in 1999, Apple had appointed Gap. Inc. president Millard Drexler to its board of directors—Drexler subsequently became CEO of clothier J. Crew Group. If Apple's stores resemble anything, many people say they look like Gap stores--bright, airy and lots of light-colored wood. Johnson used the alias John Bruce (a play on his middle name) while developing the project, so competitors wouldn't be tipped off that Apple was developing a retail store initiative. His title was Sr. V-P for New Business Development. The company also assigned a code word to the project to keep its purpose a secret. Read about Johnson's 2004 presentation to a design group that details more of the early development and history of the stores. Of course, gaining market share was also at the top of Apple's list of reasons for opening their own stores. By all accounts Apple accounted for 5% or less of the total U.S. personal computer market. In Apple's mind, they could only gain share if they opened their own stores. In fact, they were more optimistic than this, adopting a "5 Down, 95 to Go" advertising slogan that they termed--in true rebel fashion--their "Manifesto." This slogan quickly disappeared, and the more-enduring "Switcher" campaign became more prominent. At a Jan. 2005 retail conference, Johnson told the audience about an early strategy meeting with Steve Jobs about the store. "I sat in a room with Steve, and he put on the table Apple's product line. And we had four products, two portables and two desktop computers. The iPod wasn't created yet." So immediately, Johnson knew Apple would have just four products to fill the 6,000 square-feet stores. "And that was a challenge. But it ended up being the ultimate opportunity, because we said, because we don't have enough products to fill a store that size, let's fill it with the ownership experience." Johnson continued, "So we quickly moved from a buying experience to an ownership experience--Genius Bars, theaters, and face-to-face help and friendly people. But we had a liberty that most retailers don't have that are overstuffed with products. You know, you don't have the space to innovate." Johnson told a 2006 conference audience that he visited the Ritz-Carlton Hotel to learn how to deliver on service day-in and day-out. He also explained some of his design rationale behind the stores. Johnson has said, "I imagined it as a store for everyone, a place that would be welcoming to all ages and where people could feel they truly belonged.” Johnson said at the point he arrived at Apple, the company had never had any retail operation. He recalled, "People thought I was crazy." Check some interesting history of Apple's plans to open a series of Internet cybercafés back in 1997.
The Stores In a May 2001 MacCentral article, Steve Jobs explained the there were nine, what he called "success factors" for the retail stores. The first six he felt Apple had already mastered, but for three others, the company had no previous experience. In May 2001 Apple opened its first two retail stores, in McLean (Virg.) and Glendale (Calif.) (see video). These two stores reportedly had 7,700 visitors and sold $599,000 in merchandise during their first two-day weekend. These stores, and subsequent ones, had several common characteristics:
Perhaps the most important of the above features is the "hands on use." The computers on display in an Apple store aren't some type of artificial display--they're hooked up to video camcorders, digital cameras, iPods, music keyboards, etc. so the visitor can actually create something, burn it to a CD/DVD, and get a feel for the hardware and software. You can also access the Web, download e-mail or otherwise use the Web through the store's open Airport wireless system, and their heavy-duty data line (the bill for DS3 is reportedly $5,000 a month per store). Check this list of Ginza (Tokyo) store features that also applies to U.S. stores. Apple set a goal of 25 store openings for its first year of operating a retail division. At the San Francisco grand opening in 2004, Ron Johnson told the press that 90% of the U.S. population is within 15 minutes of an Apple store. See our store Chonology for more information on the store openings and future plans. Apple's first store outside the United States opened Nov. 30, 2003 in the Ginza shopping district of central Tokyo, and now have stores in 16 international cities, with plans for the first-ever stores in Australia, China, Germany, Switzerland and Mexico.
Apple has official reseller Apple stores in other countries, including a store in Beijing and Australia. They're usually called "Centres" or "Shops" so as not to confuse them with official stores, and they have a slightly different look, yet retain the Apple white colors and brightness. As for the stores' locations, Fred Anderson told a Sept. 2003 conference that when Apple considers a site, they use their customer base to forecast visitors volume and revenues, and can accurately predict both. He said the company would not build a store unless the forecast predicts a profit for the store during the first year. In previous interviews, company personnel said they were also analyzing the geographic distribution Windows computer users when deciding where toite new Apple store.
Most of the stores are within existing shopping malls, or what developers are now calling "lifestyle centers" or "super regional" malls that feature not only stores but attractions: theaters, playgrounds, rides, skating rinks, food courts, museums or other displays. Apple doesn't intend to build so-called "destination" stores (Home Depot, Best Buy, etc.), but rather like other retailers, to locate at places where traffic is already high. Apple signs relatively long-term leases for its spaces, ranging from five to 20 years, with the majority being 10-year leases. The high-profile stores in the chain are particularly pricey, with remaining lease commitments as of April 2006 ranging from $5 million to $48 million. [It's pretty clear that the most expensive location is Regent Street in London.] Many of the malls where Apple locates its stores are managed by The Macerich Company, the Westfield Group, and the Simon Property Group. A few stores have been placed on a city street, or in the case of the Santa Monica (Calif.) store, along a pedestrian promende. In Palo Alto (Calif.), they had to contend with renovating an historically significant building (they couldn't expand or change the walls), and in some locations they tore down the existing structure and built a completely new building (Chicago, Burlingame). They also integrated a store into the old downtown section of Pasadena (Calif.), retaining the outside architectural features. The SoHo (NYC) stores is the former "Station A" for the U.S. Postal Service, and the Regent Street (London) store belongs to the Monarchy. [store front varieties] [Apple's storefront gallery] The "fit-out" of 55 mall-located stores durint 2004-2005 was handled by Shawmut Design and Construction (NYC), who boosts they finish the job in 11 weeks with "zero disruption" to the surrounding mall businesses.
Visually, the Apple stores range from distinctive to almost revolutionary. Interestingly, one of the architectural firms frequently used by Apple for its stores is Bohlin Cywinski Jackson, based in San Francisco (Calif.), not far from another project they worked on--the headquarters of Pixar Animation Studios in Emeryville, whose president is, well... Steve Jobs. The architectural firm uses Macintosh computers in their work, too. Physically, the stores are of two types:
Eleven stores are designated as "high-profile" stores, meaning their location, size and configuration designate them as very special. These stores include SoHo (NYC), North Michigan Avenue (Chicago), Ginza (Tokyo), Union Square (N. Calif.), Osaka (Japan), Regent Street (London) and Fifth Avenue (NYC). The stores are so important, Apple designates about $27 million a year to them for brand marketing and promotion. The stores are built around a standardized size and design, which in the retail trade are called prototypes. The store layout and design was developed in a Cupertino warehouse in the year before the first store opened. Now Apple has two main store sizes: 30-feet and 45-feet wide, with variations within each size (designated by letters A, B, C). There are a very few larger stores (up to 70' wide), and several mini-stores [full info] that have two basic sizes (small and smaller). I've seen the store types described in other ways, too. The storefront configurations vary widely among the stores, including entrance and logo configuration and building materials. Overall, Apple's retail stores range from around 3,600 square feet to 20,000 square feet, with most being in the 3,000 to 6,000 square foot range. When the first store opened at Tysons Corner, Steve Jobs told a reporter that most stores would be 4,500 square feet, with another 1,500 square feet for inventory. In some cases (malls), the store takes up all the available space, and inventory must be stored at a separate location within quick walking distance. In June 2004 tipsters pointed to the Stanford Shopping Center (N. Calif.) and the Santa Rosa Plaza (N. Calif.) as two very small future stores. The former is barely 20 feet wide, but 100 feet deep, while the latter is less than 1,000 square-feet. The former store could be a temporary location while the nearby Palo Alto store is being upgraded (floor & furniture), but the Santa Rosa store is almost certain to be one of Apple's planned "mini" stores. [mini-store report] Each property manager has a list of rules and guidelines for tenants, describing the plumbing, electrical and other support systems the tenant must provide, as well as rules for the lighting, signage, door opening, security, flooring, ceiling and other elements. [sample rules, 5.1 Mb pdf] [sample rules #2, pdf] The facade of Apple stores is a mix, either bead-blasted, matte stainless steel from Japan or semi-polished Indiana limestone from the U.S. mid-West. The former metal finish is prepared by using a series of small shot or BBs to impact the metal, giving it a non-polished appearance. The latter stone finish is almost neutral, medium brightness gray, and despite looking rough, actually it has a very smooth feel to it. It's the same stone used on the Empire State Building [stone details]. The storefronts are usually all-glass, with a back-lit Apple logo in white plastic someone visible. In some cases the swinging doors are in the middle, but in some cases a logo wall is in the middle, and two doors flank it on either side. As shown in the photo (right), there is also a variation that has a large logo wall and one door to the side. Here is another example of a mall store, with stone paneling and the large black wall with Apple logo. In almost every case, Apple has been able to convince local zoning authorities to allow them to display the back-lit Apple logo on the front of the building. In some cases zoning boards have objected to the having the logo on the second level, or even lighted. At least two Apple stores are in buildings with historic significance (SoHo, Palo Alto), and the architect had limitations in how the building could be modified. In Chicago, the Apple logo is actually a window to the inside of the store. At the SoHO (NYC) store, the logo is almost invisible, since it's just a 10"x10" piece of black metal with the Apple logo cut out from it, hung perpendicular to the storefront. Check this collection of photos that demonstrate the various storefront styles. The logos and associated lighting hardware is designed and manufactured by Thomas Swan Sign Co., Inc. of Richmond (N. Calif.). The company was formed in 1877 by Mr. Swan, and was later purchased by Mr. Thomas, whose son now operates the company. The firm also does work for Pixar, including the huge sign over the company's Emeryville (N. Calif.) entrance gate.
By the way, before the construction is finished, Apple routinely keeps the storefront hidden with plywood and other materials, frequently painted black, with or without the conspicuous Apple logo [The Grove]. Sometimes it's a challenge to determine which building will actually become the store! [news story on the barricade specifications] So, will passersby come into the store? And if they do, what then? Retailing consultant Paco Underhill has some answers. About 25 stores have a upper floor, most linked to linked to the ground floor with a glass staircase, which are designed and intended to draw visitors upwards into the upper levels. You can find a list of the glass staircase stores here. Read more complete information on the engineering behind the glass staircases. The interior lay-out and design of the stores has changed sustantially over the years: gray, 30"x30" Pietra Serena ("stone the color of the skiy") variety sandstone floor tiles mined from the Sienna district of Italy (outside of Florence) replaced blond wood, and blond wood display talbes replaced the white Corian "kidneys." Point of sale counters disappeared when handheld computers were introduced to process purchases. Black wood island shelving for products disappeared and was replaced with metal wall shelves. Theaters space, including rear-projection screens, were removed, except at the larger stores. Early stores usually had their point-of-sale (POS) or check-out terminals at the front, while narrow stores usually had their POS terminals at the rear of the store. The larger stores had a theater at the rear of the store, or in the case of the larger stores, on the second floor. The length of the Genius Bar also varies depending upon the size of the store. The Regent Street (London) store has the longest bar, at 46 feet. A few selected stores have a Creative Bar. [full layout-out info] Besides the retail floor, the Apple stores have backroom areas that sometimes include a public restroom, offices and the inventory area, commonly called "the cage," where computers, displays and other products products are stored. In some cases, inventory storage is located at another location within walking distance because of limited space at the store location (at malls). The stores with a full presentation theater (flagships) have a very sophisticated audio-video system. It allows the presenter to project the computer display onto the rear-projection screen, and includes a wireless microphone and headset. Before the presentation, the presenter can play a pre-recorded set of slides (Keynote?) that promote the topic. The presenter simply punches in a number code on keypad at the podium, and the slide show begins: animated slides show the list of the day's presentation's, their times and topics. The next slide focuses on the next presentation subject. A pre-recorded audio announcement is played throughout the store ("Coming up next....."), alerting visitors of the upcoming topic. By the way, the Ginza (Tokyo) store has four stories of retail space, a 5th-floor training center, and offices on the 6th floor. Building upward is typical in Tokyo's crowded metropolis, so don't expect this configuration to appear in U.S. stores. Here's an unusual sight--the interior of an Apple store after it's been finished, but before any products have been placed. Most Apple stores are open from 10 a.m. to 9 p.m. Monday through Saturday, and then from 11 a.m. to 6/7 p.m. on Sundays. Some stores stay open a little later on Saturdays, and some have shorter Sunday hours. The North Michigan Avenue (Chicago) stores stays open until 11 p.m. on Saturdays, the Saddleback (Tenn.) store is open only from 1 p.m. to 5 p.m. on Sundays, and the SoHo (NYC) stores is open only from 10 a.m. to 8 p.m. Monday-Saturday. During the "holiday" period from Thanksgiving to New Years the stores have expanded hours. Steve Jobs gives you a tour of a typical store in this video posted at the Apple Web site. The front display windows are changed periodically to focus on the latest marketing campaign-- iPods, laptops, back-to-school, etc. The window displays are designed by Apple's in-house team, and frequently use a slot and cable system to suspend the design elements within the window (similar to this system). The original interior design was by Eight Inc., a San Francisco-based company headed by Tim Kobe and Wilhelm Oehl, who bill themselves as "design consultants," and whose projects include commercial and residential structures, both inside and out. Here's how the company describes its Apple store design philosophy. Inside, early stores were constructed with light-colored, old-growth maple wood floors from Carlisle Restoration Lumber (NH), a 40 year-old, faimily-based business. In newer stores, the dark gray floors have been Italian (Pietra Serena) siltstone imported from the Sienna district of the country asn 30"x30" tiles. According to Ron Johnson, "It's the same stuff Florence was built on." I hear that the wooden floors were not staying flat for some reason, creating all sorts of maintenance problems In Oct. 2003 several stores closed for a flooring change-out, and by 2005 a more general flooring change-out was underway. Early stores also had giant white plastic islands (I call them battleships, but employees call them kidneys) made of Corian on which merchandise was displayed. Vintage stores have black-stained ash wood shelving for software, books and other small merchandise. Newer stores (since mid-2003) use light-colored maple wood tables that create islands of merchandise and present a much "warmer" customer experience. For example, the Bay Street store used the white Corian battleships (Nov. 2002), while the Burlingame store had all-wood furniture. The store lighting is very well designed and executed. Sylvia Bistrong of ISP Design, Inc. (Miami) reportedly worked on the original design for two years, and has continued to design lighting for new stores. You can read about the technical aspects of the lighting for the Regent Street (London) store, which is representative of the complexity and thoroughness of design. The ceiling in many of Apple's stores are specialized, one-piece plastic-type material streteched over perimeter frames. The material and frames are provided by Newmat Stretch Ceiling Systems (NY), and provide many design and appearances features. We've posted a complete list of the companies involved in the design and construction of the Palo Alto (Calif.) Apple store, and no doubt many of these companies also participated in the work on other stores. Here is that same list for the SoHo (New York City) retail store.
The display tables are made of sugarmaple from Canada (same wood as bowling alleys, baseball bats and NBA courts), and are enormously complicated, both in construction, assembly and in their accomodation of the power and other cables required for the display computers. Starting with the SoHo (NYC) store in 2002, the interior design changed to stone floors and more maple-wood shelving. The stores were originally arranged into six areas by the type of application, with identifying signs hanging from the ceiling above each area (although some stores opened during 2005 do not have such signs). Each area has Macintosh computers and third-part hardware tuned to the application, along with associated hardware and software for that application:
In addition, there is were sections for software (the "spine," in the middle of larger stores), and another for what Apple terms "etc.," which includes printers, scanners, hard disks, and miscellaneous supplies. Check Apple's interactive, VR panoramas of a typical store layout, and this QTVR of the Houston Galleria store. In late Nov. 2005 Apple began reconfiguring the store sections, putting iPods and music-related items at the front of the stores, and moving 'home' and 'pro' sections further back. Then In Sept. 2006 Apple debuted V2.0 of their stores, which mimic many of the features of the mini-stores, upon which the Fifth Avenue (NYC) store is based--stainless steel interior walls, back-lit graphics and a different display table arrangement. Check my report on the Mall in Columbia (Md.) opening for more information on the V2.0 design. In Spring 2007 several stores underwent a floor plan change that removed the rear wall POS counter, relocated the right-side Genius Bar to the rear of the store, and installed a "help nook" where the Genius Bar had been. POS activities were switched to a combination of the handheld computers and the Genius Bar. By 2008, the stores were generally divided into two responsibilities and areas: the Red Zone, consisting of the sales floor (mostly at the front), and the Family Room, consisting of the technical support and training activities (mostly at the rear and back-of-house). In the process of these various reconfigurations, the sections and signs disappeared. The product placements now change and morph throughout the year, especially as new products are introduced or the holiday shopping season approaches. In 2009 nearly 100 stores were remodeled to bring 2006-2007 vintage stores up to the current interior design. By the way, you'll notice that "Gaming" is not among the areas in an Apple store--I've heard some complaints about this. Of course, the game software is included in a special section of the software area. However, hard-core gamers want their own area, with G5s equipped with upgraded video cards running the lastest version of....well, something action-packed. Sorry, you'll just have to head over to the kids section to play games. In the original store lay-out, the various sections were separated by large frosted-glass partitions. At selected locations there were smaller, round counters between the sections, displaying digital cameras, camcorders, and SmartDisk FireLite hard disk drives. In early 2004 Apple installed stand-alone, 4-sided kiosks to display iPod-related merchandise. Some of the plastic display stands are manufactured by Quality Plastic Industries, including some product boxes and containers. Steve Jobs said in an earlyvideo that all of Apple's products are on display in the "first 25%" of the store. That is, the "pro" and "home" sections of the store, which are always at the front-left and front-right respectively. Prof. Alexander Chernev's (Northwestern University's Kellogg School of Management) 2002 case study offers a more detailed analysis of the distribution of merchandise within a store. Another obvious feature of the stores is their front window and wall displays: they are large, well-lit and printed in very high quality. The front window displays are many times dynamic (moving), including the use of lenticular displays (as you walk by, the graphic image changes). The windows also feature motor-driven, rotating displays, mobiles that move on their own, or computers that show a selection of photos and graphics. The wall graphics reinforce the various sections of the store, and picture current products and "happy people." The design for window graphics is created by Apple's in-house retail team. while production is handled by various companies [ColorEdge - Retail Visual Group (NYC), Delphi Productions (N. Calif.), LiteBrite Neon (NYC), Shasty (NYC)]. The window displays have won several awards, including for 2009. While you're shopping, you're listening to music over a very sophisticated sound system that stores music on--what else?--an Xserve computer that is remotely updated with new music from Apple's headquarters. The same sound system is linked to speakers surrounding the in-store demonstration theater. View the full list of sound gear, or read this article by BSS Audio, who provides the sound control equipment for Apple store, including the SoundWeb networked signal processor that's used to control audio in the store. The audio, theater control and security systems are installed and maintained by ATK Services (Burbank), a division of a well-known sound design and consulting company. The top layer of some merchandise islands are 2-inch clear plastic, with 1/4-inch deep round or oval indentations on which the merchandise sits (digital cameras, camcorders, etc.). The placard describing the merchandise has a small round, Aqua-style, colored button that's key to a 3D plastic button adjacent to the indentation (harder to describe than it appears). This makes it easy to match up the description you're reading on the placard with the item on the display. In October, 2004 Apple began installing Vocera Communications gear in the mini-stores, which will allow store employees to communicate with each other, other stores and the home office over the local AirPort Wi-Fi and company IP network. Employees use tiny "badges" to make voice calls, page one another or send text messages. It also links to the telephone system to allow in and out calls, voice mail, conferencing and other features. By mid-2005 the the Vocera devices were no longer being used for an unknown reason. Besides Macintosh computers, and Apple displays, iPods and iSights, the Apple stores carry third-party computer printers and printing supplies, storage devices, computer memory, digital video and still cameras, PDAs, digital music players and related accessories, various other computing products and supplies (cables, computer and iPod cases, display cleaning supplies, printer ink cartridges, etc.), and books. In early stores there was more emphasis on third-party hardware products, since the store had plenty of display space. Now, as Apple has added more hardware products to its own line-up, fewer stores have display spaces for digital cameras and camcorders. During a tour of the Soho (NYC) Apple store, Steve Jobs told reporters that the store would stock 1,000 software titles. The number of titles at most other stores is considerably less...around 300. The software includes titles by Apple (OS X, iLife components, Keynote, Final Cut Pro, DVD Studio Pro, Appleworks, etc.), Adobe, Microsoft, Filemaker and many other companies.
As for hardware, the Apple stores originally carried Nikon and Canon digital still cameras and camcorders, but as Apple's own product line grew, it phased out lots of third-party products. However, they still carry third-party printers, scanners and hard disk drives. Overall, the company says its stores carry about 500 "SKUs," referrring to stock-keeping units, or individually inventoried products. According to the company, they distill third-party products down using the "six best" principle, effectively reducing the decisions that a customer is required to make when selecting merchandise. Most products are delivered to the stores by Fed-Ex, with a very few products delivered by UPS. Service parts are delivered by DHL. Besides new merchandise, the individual stores accumulated other merchanise that they periodically sold as "refreshed" at a discount of 10% to 15%. This merchandise includes laptops, desktops, iPods, software, books and peripherals that have been returned by a customer in working condition, usually because they were dissatisfied with it. Usually the merchandise was displayed a little cockeyed on a cart or table, and it was a little inconvenient to fumble through it to see if there's anything of value. I've found a few items of interest, including cables, that would be a value buy. I've never saw any discontinued or "old" merchandise. Update: In mid-2007 it was reported that the stores no longer hold end-of-quarter sales of refreshed merchandise. Returned merchandise that isn't working is not re-sold by the store, since the Genius team does not have the time to repair merchandise for re-sale. These items are possibly shipped back to a warehouse where it's disposed of in other ways (sold as refurbished, disassembled for parts, etc.). Returned software is never re-sold, but destroyed, and the loss is taken by the store--unless the software is defective and the customer was given another copy. All of the portable Apple hardware on display is secured with either phone jack-style security cables, or adhesive-backed cables, and the newer systems are supplied by SE-CURE Controls Inc. The electronic cables are linked to an alarm underneath the display and, unlike some of the other electronic stores, I've never heard the alarm go off by accident. And speaking of theft, read this account of how iPods were allegedly used to copy software from the display hardware. The wall counter display tables slide out from the wall to reveal the security connections. Check these photos of the gear behind and below the counter. [#1 / #2] What if an in-store computer goes "poof!?" I've seen Mac Specialists use a clear plastic keyboard cover to indicate to shoppers that the computer is not working (it says "See Mac Specialist"), and a LaCie PocketDrive hard drive to transfer files onto the affected computer using Carbon Copy Cloner. At many stores Apple has implemented a "runner" system to streamline the delivery of products from the stockroom to the retail floor for purchase. Under this system, the Specialist talks to the customer, then uses a store display computer to log into the Runner software to communicate with the stockroom personnel what items are needed. The system allows a Specialist to also check onhow long it will take for an RAM upgrades, software installs or other custom work. Check some sample screens of the system here. The last step in your visit is the purchase, which used to be made at a point-of-sale (POS) counter. During a 2005 holiday shopping season Apple debuted handheld computers to handle credit card transactions, and the practice was continued afterwards. The POS counters were eventually removed, and all credit card purchase operations were switched to handheld computers. In this configuration, the Genius Bar handles cash and non-credit card purchases. [full info] You can also use an Apple gift card to complete your purchase, including a generic card for any amount and any product, and those specifically for iTunes, the One to One training service and the iPhone. Apple has even patented (pdf) the gift card design. At older stores, the POS terminals were located either at the rear of the smaller stores, or at the front of the larger stores. The stores have also been known to have a temporary, rolling POS position with a Powerbook during holiday sales periods, or during OS or iTunes events that draw large crowds. [newest style POS counter] The POS counter is very clean--they use iMacs to run the application, and the keyboards and barcode reader are stowed inside a shallow drawer. The counter includes a card reader with a small LCD screen for signing credit card transactions electronically. There are usually several brochure holders on the counter, along with CD copies of iTunes. The POS application was programmed by 360Commerce Inc. of Austin (Tex.), and it's written entirely with Java, so it took less than a day to get it up and running on the Macintosh, according to the company. Download the company's case study (Acrobat, pdf) of their work with Apple. The POS application is run on Macintosh computers (usually iMacs), and laser prints receipts on watermarked paper (it says "Apple Store") pre-printed with the distinctive Apple blue logo and the store's address and other information. The back of the receipt explains the "Purchase Policies" that include a provision to match prices on any item if it's reduced within 10 days of your purchase. In Nov. 2009 Apple switched to an entirely in-house POS system: a iPod touch mated with a scanner and battery back, running an Apple-written software application. Under the original purchase process, if you used a credit card, your signature was taken electronically on the LCD screen, and you then pressed an Aqua-style "OK" button to continue processing the transaction. Your receipt was typically folded into thirds, and placed inside a cardboard-envelope that includes a cut-out for inserting the Specialist's business card. At some stores, the POS counter was at the front of the store, and adjacent to product shelving. Visitors wandering the store sometimes mistook the POS iMacs for display computers, and try to access them. So, Apple programmed the screensavers on the POS terminals to display "Employee Station," and to contact a sales representative if you wanted a computer demonstration. Apple is very aggressive on promoting rebates: they'll print out the required forms for you when you make your purchase, and merchandise price cards are changed quickly when the manufacturer begins a rebate. A Fall 2008 back-to-school rebate was easy to claim: go home, surf a Web site and enter the receipt number. Within seven days you'd receive your check. By the way, Apple offers an Instant Loan Program for your purchase, allowing you to finance a purchase up to $25,000 with no interest payments for 90 days. And then you receive the Apple bag! The first design was quite an impressive way to carry out your purchase: a slick blue, slight-transparent, two-ply, plastic-type material. The two layers were composed of a frosted outer layer and a dark blue inner layer, giving the overall Aqua appearance. This bag is certainly in synch with other retailers who use their bags to advertise, "I just purchased something at the Apple Computer store!" This is especially important at a mall, where you might walk around for another hour after your purchase, swinging that blue bag by its drawstring. There also has been a larger, gusseted "paper" style bag, which is flat white with a red, Aqua-style Apple logo on the side. During 2003 Apple gave paying customers a silver-colored shopping bag with silver-colored drawstrings attached at both the top and bottom of the bag ("Made in China"), and designed to be worn as a backpack. [private source of similar bags, click on "Trade Show Bags"]. In Spring 2005 Apple debuted a smaller bag--about the size of a standard software box-- but otherwise identical to the larger backpack-style bag. Update: In March 2009 it was reported that Apple will no longer use plastic bags, as part of stricter environmental policy. To assist in tracking merchandise going out the door, some in 2007 Apple created a "Thank You" stocker they put on merchandise. The sticker also makes an Apple bag unnecessary, indicating to other employees and security officers that you purchased the product. Oh... the Apple store employees will be happy to carry you purchases out to your car with a handtruck--even if that means a long trip through the mall. I've seen employees trucking 8-10 boxes of merchandise very long distances, and then wait at the curb while the customer retrieves their car and drives it up for loading. I'm told that the loading of the merchandise is part of employee training, and my impression is that this conspicuous duty helps advertise purchases to passersby. What if you're interested in leaving the store with merchandise and not pay for it? Apple's display merchandise is hooked to a security system that sounds an alarm if an item is detached. In some cases the cable attaches to the RJ-45 connector, but otherwise it's via adhesive directly to the device. Some loose merchandise (in boxes, plastic bubbles, etc.) have RF-style anti-shoplift tags attached to them. There is no security "gate" at the door, only security on products. I've only heard an alarm going off in an Apple store once. By the way, the "Keyholder" job position has responsibilities that include "loss prevention." [Read this interesting "theft" story!] Apple tracked its 25.2 million visitors during fiscal 2004 using very discrete, video-based, customer counting equipment by ShopperTrak (Chicago). The system provides real-time analysis of store traffic for both in-store (staffing, etc.) and headquarters (marketing, financial) purposes, and automatically uploads the daily traffic data to Apple's headquarters for analysis. The ShopperTrak gear can determine how many shoppers pass within 15 feet of the store's door, how many enter the store, and how many of those shoppers approach the point-of-sale area to make a purchase (conversion rate, which is about 4%-5%). The very sophisticated technology can distinguish between ingoing and outgoing traffic, count side-by-side traffic and differentiate between actual people and their baby strollers. ShopperTrak's gear can use multiple sensors, and track and analyze where shoppers go within the store, and can be linked to the point-of-sale system, although it's not clear if Apple uses these features in its stores. As you come into the store, look straight up overhead--there's a small opening over the door, about two feet inside of the door frame, with a black recessed lens. The device is pictured here. To be clear, the ShopperTrak system does not "video tape" store visitors. It performs video-based analysis on the movement it detects within the optical frame by comparing two successive video frames, and it then discards that video. The gear is not "surveillance" video in the ordinary sense. The "output" of the system is data--numbers, columns of figures-- and not moving video. It only captures the same information a human would with a hand counter, but automatically every 15 minutes. You may know that there has been extensive research on the behavior of store visitors (customers?), how and why they enter, where they go, what they like and dislike, etc. Read an interview with consultant Paco Underhill, a long-time Mac user and "retail anthropologist," who generally likes the stores, but has some suggestions for improvement. Apple schedules regular and special events at its stores, including mini-classes on each of the Digital Hub products, OS X, Final Cut Express/Pro, Keynote, and .Mac. You can check their calendar for the store nearest you to see what's up. As for special events, in July 2003 the Doobie Brothers appeared at the Palo Alto (Calif.) store to talk about using computers in the music production process. Apple offers to accomodate those with special needs who want to attend store events. And very lastly, Apple's customers include many celebrities from the world of sports, stand-up comedy, TV and motion pictures. Perhaps drawn by "the best money can buy," or by the appeal to their artistic nature, celebrities have visited many Apple stores--and in some cases have made the switch to Macintosh! Every store has employees who can tell you celebrity stories--ask next time you visit. After you exit the store, you may encounter a survey-taker who will ask you questions about your experience. I have e-mail from someone who was asked about the store experience, including his impressions of the staff, the Genius Bar, software selection, Back of House All of the above material describes the public areas of Apple's stores but, of course, there are other areas set aside only for employees-- in the retail industry it's traditionally called the "back of house." Since I've not visited these areas, I can only summarize some of what you don't see at an Apple store. Oh, and not all features are available at all stores… First, the back of the stores includes a "lock-up" or cage for high-value items, accessible by the Keyholder or Manager. There is also lots of ceiling-high, open shelving for stocks of other products--Apple says there are about 500 separate items stocked at a store, ranging from very small (Firewire cable) to very large (30-inch Cinema Display). There are usually some type of small lockers for the employees, where they can put their iPod, keys or other items while working. There is a sink area, along with a microwave and small refrigerator. Along the wall there are desk surfaces, drawers and shelving for administrative work and computer repairs. The rechargers for store radios or Vocera devices are on a shelf. There are bulletin boards, at least one with "Surprise & Delight" messages, consisting of commendations from customers or HQ. There are supplies for shipping products out to customers. Repairs have become a more important part of store activity, and no doubt it will continue to grow. There are areas where computers can be disassembled, parts replaced or repaired, and there is equipment and tools for the repairs. Inventory is a big deal for any retail store, and especially so for an electronics retailer. Much of the back of house activity is related to receiving items from Apple's warehouses via UPS, accounting for the delivery, stocking the back shelves, and then stocking the retail floor. It may appear to be a chaotic area full of boxes and carts, but it's all coming in from somewhere, and going out to somewhere. The Employees This Web site focuses on Apple's stores and not its employees. Nevertheless, I've collected lots of interesting information about the people that staff Apple's retail stores. At the opening of the Palo Alto (Calif.) Apple store, vice-president of retail Ron Johnson joked that it is literally harder to become an Apple store employee than to get into Stanford (his alma mater). Indeed, during a Nov. 2003 financial briefing he said Apple hired 978 store employees during 2002 from an applicant pool of 16,438--less than a 6% chance of being hired! He also noted that the employee turn-over rate was very steady, and among the lowest in the retail industry (which ranges from 40% to 80% a year). This hiring percentage has stayed steady even through the retail operation's fourth year. [In Sept. 2006 Johnson said the turn-over rate was just 20% at the Apple stores.) Despite his statements, turn-over is high when compared to non-retail companies. At least one person noted that as of July 2005 there were fewer than 15 of the SoHo store's original employees still working there, out of a total workforce of about 250. At that point the store had been open three years, indicating a 93% turn-over rate over 3 years (although presumably some of the positions turned over more than once during those 3 years). Apple maintains a Web page with job information and current openings, organized by geographic location. Apple hires from the outside using internal and contract recruiting personnel, but is also very proactive in promoting its current retail staff to upper level positions (assistant manager, manager, etc.). Recruiting efforts include e-mail solcitations, postings on Monster.com and its own Web site. No newspaper or other printed advertising is used to publicize open store positions. The recruiting process progresses through rough screening by telephone, to personal interviews, to hiring and training. Final employee candidates are subjected to a background check by HireRight, which offers an Internet-based system that provides "the industry’s fastest turnaround times," according to the company. Read my complete collection of information about Apple retail employee hiring. Each store has about 30+ employees (although SoHo and other flagships have 100+). Here is a list of the standard positions..check here for a full job position listing.
Note: In April, 2008 I learned that Apple had dropped the "Mac" portion of the job description for the Genius and Specialist positions, intended to better describe their overall duties that now include iPods, iPhones and other products. As you'll notice reading the job descriptions on-line, Apple is quite playful in explaining the positions, and focuses more on the type of person they're seeking, rather than the work tasks you'll perform. Despite these specific positions, all Apple employees share certain goals of selling, keeping the store in "tip-top" shape, suggesting ideas for improvement, etc. The people that Apple hires are extremely diverse, and represent a full range of age, ethinic background and culture. At the Ginza (Tokyo) store opening, the company noted the employees were 50%-50% men and women, collectively speak 10 languages, 80% "speak" Windows, 40% have "Pro" expertise. Apple does not have a policy forbidding various hairstyles, facial hair or body piercings, and it's common to see employees with a variety of personal styles.but actual staffing is based on the stores "class," which in turn are based on the store's annual sales figures. According to ThinkSecret, a Class "C" store ($8-12 million) would be allowed one manager, two assistant managers, 4 Mac Geniuses, two Keyholders, two full-time Mac Specialists, about 15 part-time Mac Specialists, and an Inventory Control Specialists. Stores with less revenue may not fill all of these positions. Apple store employees receive a fixed, hourly pay--no commissions. Like many other retailers, Apple's pay scales taken into account the location of the store, the area's cost-of-living and other factors. In Apple's case, it has established four pay rate categories, based on the size of metro market size where the store is located. Within each category there are pay scale ranges for each of the job positions. Each pay range consists of a mid-rate, a +20% top rate, and a -20% low rate. The top pay rates for Mac Specialist I/II, Keyholder and Inventory Control Specialist are just a few dollars more than minimum wage, while those for Mac Genius (various levels) and assistant manager max out around 5-6 times the minimum wage., and the pay rate isn't much higher than minimum wage. In June 2004 the ThinkSecret Web site published a story that outlined some pay and staffing information, including the pay of non-management personnel. For pay purposes, the following jobs are equivalent:
To maintain low operating costs, Apple very carefully works out scheduling, and usually doesn't post it for employees until the week before--you have to be flexible! Also, despite Apple's seemingly casual culture, you have to sell while working. Apple wants to see some .Mac, AppleCare and ProCare packages going out the door with systems. Employees are evaluated on their sales performance, even if commissions aren't involved, and steps (?) are taken to improve low performance. Full-time retail employees receive the usual company benefits, which includes flexible benefits, retirement and stock option plans. Part-time employees reportedly receive some retirement and stock option benefits. It's been widely reported that store employees are eligible for a quarterly performance bonus-- if the store meets or exceeds a sales goal, part-time employees (at least 250 hours during the quarter) receive the full $500 bonus, and full-timers (avg. 32 hours a week) receive a $1,000 bonus. Lastly, Apple offers its employees a standard discount on retail store merchandise, a larger discount once a year on systems, and a limited number of "friends and family" discounts each year. Various third-party merchandise suppliers (Nikon, Canon, H-P, etc.) also offer the store staff varying discounts on some of their merchandise.
Once you're hired, you receive an Apple ID card and a distinctive lanyard in which to carry the ID and your supply of business cards. The cards are arranged portrait style, and feature a blue Apple logo, the store's name (Cherry Creek, etc.) in bold black letters, and then the employee's name in smaller, gray type at the bottom. I've received lots of e-mail about what qualities or knowledge Apple is seeking from applicants, and have written some advice about being hired. There seems to be some minimum required knowledge of Apple products, technical knowledge of Macintosh systems, and prior retail experience. However, a larger consideration seems to be the applicants personality, attitude and how they will fit into providing the customer with the right in-store experience. It seems that Apple is willing to train applicants about retail selling, technical details and other specifics, but want employees who have already have the qualities that highlight teamwork, enthusiasm and the ability to project Apple's corporate philosophy. So an applicant with lots of technical knowledge about Macintosh systems doesn't automatically have an edge over someone who fits a certain personality type. Apple's employees all wear the same outfit: an Apple-supplied T-shirt and... well, whatever pants and shoes they want. The shirts are limited to employees only (although you can now find them for sale on eBay), and promote a particular product or service. The shirt were originally black with red and/or white lettering--where do you think that design came from?! In one case, the shirt was bright orange for Apple's summer "Camp" for kids program (starting insummer 2006 Apple hosted 20,000 for the camp program). [for example...] Now, like an aircraft carrier, the shirt colors indicate their duties: orange for Concierge (greeter, store guide); light blue for Specialists who have general knowledge of all the products, run workshops and Personal Shopping sessions, and iPhone activations; and dark blue for Creatives and Geniuses, trainers One to One and the Genius bar team. Information about employee training is notoriously hard to come by. I do know that the training period is three weeks, and includes role-play, Web-based product familiarity access, and classes on Apple's retail philosophy, basic sales techniques and customer relations. Apparently all product information is obtained through two Apple Web sites--there is no in-person product training. Furthermore, the store computers are the only source of software for employee familiarity training--there are no computers where employees can sit down, run a program, learn about its features, and gain proficiency. I have read that the company's philosophy for customer contacts is "one at a time," rather than to try to rotate among several who are in the store. My experience (personal and overheard) has been that Specialists are attentive when they have the time, and focus on, "What are you going to use your computer for?" They naturally zoom in the functions at which the Macintosh excels, including video, photos and music. They seem well-informed about Apple's products, technology, and how both might serve the customer's needs. They give you their business card when the sale in complete so you can contact them with any questions or problems. I know that Apple has a specific sales procedure, keyed to a letters of the alphabet, and which describe the components of a sales contact. Here it is:
Besides these employees who work in Apple's own stores, the company also hires persons to work in other retailers' stores, including CompUSA. These persons, called Apple Solutions Consultant (ASC) Retail Representatives, usually staff the store-within-a-store area, and train the stores's staff on Apple products, promotions and solutions.
Now, having said that I'll avoid gossip, I should note that there is lots of debate among on-line Mac advocates about the level of service and the knowledge of store employees. Some say that Apple doesn't train employees enough on products, while others equate the employees to those at other electronics retailers (Whoa, now!). Yet, it's clear that Apple is hiring people who have some degree of passion for the Macintosh and other Apple products-- no one would work for near-minimum wage without the passion. It's also clear that they're providing at least 80 hours of training for new employees on sales techniques, customer service and Apple products. This generally translates into friendly, accommodating store employees who are knowledgeable about the Mac, and what products fit customer needs. It's also obvious that every store has its own "personality," ranging from a casual "skateboard and BMX kick-ass" feeling, to a more formal suit-and-tie feeling. (On the other, it's a little tough to act formal when you're wearing a bright orange shirt with the word "CAMP" on the back!) I've encountered stores where I felt at home immediately, and others where I seemed out of touch. Naturally, the level of store activity, number of employees on-duty at the time, and the mood of the employees (everyone has a bad day) contribute to the store's personality. When you visit, you should be prepared to be a little flexible when entering an Apple store, and seek out a store employees that seems like a fit for your own needs and personality. But note--non-Macintosh users and "just casual" Mac users are a little less interested in the finer points of store personality, but just want to know if a certain printer cartridge is stocked. Most of the criticism I've described seems to come from real Mac nerds (can I use that word still?), who probably have very little actual need for the expertise an employee has--ironically. Macintosh customers--real Macintosh customers-- can sometimes be a real pain! They feel very close to the company, its products, and even its employees. When something doesn't go just how they feel it should, they're writing passionately on the Internet, they're firing off e-mail, they're going nuts! As always, it's a double-edged sword: having such loyalty translates into sales, but if something goes wrong, they're the same people who will call you a *^)@#$%^&*(. At the San Francisco store press event, Ron Johnson mentioned a learning experience: Early in the company's retail store history, Apple required store employees to log every question asked of them by visitors to the stores. However, they later dropped the activity after learning that the logging tasks took too much time away from helping customers. Check this MacWorld magazine store for one writer's experience--15 hours at an Apple store! Lastly, it is absolutely, positively forbidden to ambush the Mac Geniuses! I know lots of Mac propeller heads (I can still say that!) who can't wait to visit their local Apple retail store, and race to the Genius Bar to ask the most obscure question on earth so they can stump the Genius-- or force them to use the Red Phone. Please, while they may have a passion for Apple and Macs, they're still employees trying to make a living. Don't embarrass them with outlandish questions. Tip: Being first in line at an Apple store grand opening can't be a bad thing to put on your resumé! I know at least three persons who camped out with me, and who I spotted several months later wearing an Apple ID card in an Apple store. The Details What you don't see at an Apple store is the unbelievable organization of everything in the store. Apple had a full store mock-up hidden in a San Jose-area warehouse for a year prior to opening an actual store, so they could test out various layouts and designs. They continue to tinker with the formula-- furniture, lighting, merchandise mix, so-called "collateral" (those brochures and cards, etc.), placement of objects, etc. Like many retail stores, Apple produces a printed planogram for each store, showing each and every table in the store, and each and every object that should be on the display tables-- iPods, power cords, security cables, brochure holders, etc. Everything. Every aspect of the display and marketing comes from the corporate offices, and presumably has been tested and approved. There is no "individual" placement of merchandise or advertising materials at the various stores.
One example of Apple's attention to detail: When they first set up the shelves for software, they stocked them with perhaps two, three or four copies of each software title. However, after one or two copies were sold, the front, overall appearance of the shelf would appear "hodge-podge," with some titles more visible than others. So Apple came up with a solution: they had manufactured an L-shaped piece of metal with a magnetic bottom plate. They placed one of these metal plates behind each stock of software titles, on the metal shelving. Now, when someone purchases a copy of the software, an Apple employee simply slides the metal support forward on the shelf, putting the remaining copies flush with every other title. Take a look yourself next time you visit an Apple store. Similarly, Apple devised a clear plastic tray for the music keyboard display in the 'Home" section, allowing the computer keyboard to fit underneath. When the iPod shuffle was introduced, and later the iPod nano, Apple came up with plastic stands to hold them, an later even installed shiny metal stands. Apple keeps the store's ~35 display computers running properly and with the latest software by using a network feature built into OS X--NetBoot. During the night, Apple's corporate computers "push" disk images to the local stores' Xserve computers, probably using a version of Apple Software Restore. In the morning the individual computers are booted up using NetBoot, which allows the computers to load the necessary start-up software from the Xserve computer's hard disk. The software on the Xserve also includes Apple's applications for demos at the various computers, iTunes music that's played from the Xserve into the store's speaker system, and specialized software such as the Christmas gift selection application. [read this if you want to iChatAV with an Apple store!]Each computer is re-booted initialized every day (after closing or before opening) to erase any errant files created by customers.
At closing time, the Xserve computer displays a message in white letters on a black screen at each computer: "Thanks for shopping at xxxxxxx Apple store. We'll be reopening at 10 a.m. tomorrow. Thanks and have a good night." At other times that they're performing maintenance on a display computer, there will be a black screen with a photo of a padlock to indicate that it's not useable. The stores are supported by several computer systems and programs, all known by acronyms: POS (point-of-sale), GIA, GRA, ARW, T&A CICO, Scheduler, Maestro, Kiosk, ARLM. The applications handle inventory, employee scheduling, training, repairs and other activities. If you've ever been to an Apple store opening, you'll know how meticulous they are about cleaning the windows, the floors, the shelving, etc.--it's almost to the point of being absurd. During the Palo Alto opening, they almost continuously cleaned the windows (inside and out) between 6 p.m. and 11 p.m., and then returned at 6 a.m. to start all over again. The same activity has occurred at subsequent openings--the cleaning crew must be the hardest-working team in an Apple store! By the way, each Apple store also has a corresponding on-line Internet store, with a complete array of products that mirror the main Apple on-line store--it's designated as the home page for the Safari browser on each of the store's computers. The on-line store appears very much like the main Apple store, but is customized in some respects for the retail location. Presumably any purchases made from a specific Apple on-line store are credited to that store's revenues. A May 2003 article in "Business 2.0" magazine by Bob Parks said that Steve Jobs spends half a day each week meeting with a 20-member design team for the retail stores. According to Parks, during one session the group agonized over three types of lighting so iMacs would shine like they do in glossy print ads. Apple's goals is keeping retail store inventory at no more than 14 days, and each quarterly financial report notes the company keeps very closely to this goal. Computers in the stockroom are within a week or two of manufacture--neat! The Apple stores post sales per-square-foot much higher than most retailers. During the 2006 Fifth Avenue (NYC) store opening, Ron Johnson said the stores average $4,000 in annual sales per square foot, compared to $971 for Best Buy and about $300 for Target. In Dec. 2006 a financial analyst put the figures at $4,032. Figures from mall developer The Macerich Properties, often the site of Apple stores, show that sales over $300 per s.f. are considered good, more than $400 is very good, and over $500 is excellent. Specifically, Macerich malls that host Apple stores report-- Chandler Fashion Center averages $400 per s.f. in sales for 210 stores, the Biltmore Fashion Park (Phoenix) averages $490 per s.f., the Washington Square mall (Ore.) averages $553 per s.f., and the Village at Corte Madera (N. Calif.) averages $466 per s.f. Another of Apple's favorite mall developers, the Simon Property Group, reports in financial filings that its malls averaged $408 in sales per square-foot during fiscal 2004. In Aug. 2005 ThinkSecret posted details on several Apple policies, including dead pixels, price drop rebates, Bose gear returns, and employee Web postings. The Experience I've been buying Apple products since the orignal Apple II+ (1979), and using Macintosh computers since the first model (1984), so my impressions of an Apple store are quite different from others, including those without a computer or those owning Intel/Windows computers. Nevertheless, I do have impressions: The windows are large and allow a view of the inside, which I also appreciate before entering a store I've not previously visited. There are literally scores of products to interact with, which for kids, people who like to test-drive their purchases, or anyone else is a definite advantage. Virtually any software application available at the store is installed on at least one computer, and you can try it out, including Final Cut Pro, Photoshop and the entire line of iLife applications (music, photos, video, Internet). There are scores of third-party products displayed for handling, including digital cameras and camcorders, and they're all connected to power cords so you can turn them on, look through the finder and get a feel for how it actually operates. Other products like printers, scanners and hard drives are displayed for handling. Employees don't zero in on you when you come in the store, but not through inattention. They'll come by and ask, "How are you?" or perhaps, "Can I help you?" But they'll say it almost in-passing, and never give you the impression they have spotted you as a sales opportunity. They'll let you poke, pound or otherwise interact with the computers and other gear forever, if that's what you want to do. They'll ask you to leave if you start sufing the Web inappropriately (!), but in general you'll have to approach a sales person in order to get some salesmanship going. For some, this might seem a bit disconcerting, but for others who like to investigate the merchandise on their own before tackling the sales process, it's a good thing. I don't expect employees in a technical profession to answer every question correctly. Rather, I expect them to know what they know, and then find out the answer to any question they can't answer. In that regard, Apple employees are pretty successful. During the contacts I've had or observed, they're mostly accurate with their information, and if they don't know the answer, they'll admit it and try to find someone in the store who does know the answer. In April 2004 Apple introduced Standard care and ProCare services for customers who buy a computer at one of its retail stores. The Standard service includes free set-up, application installation and file transfers. The $99 ProCare service includes Genius Bar reservations, on-demand theater presentations and more [see AppleInsider story]. At the same time, Apple bumped up its in-store repair services, including overnight repair service for laptops [AppleInsider story] [Apple's ProCare page] [ProCare vs. Standard service]. By Sept. 2006 there were over 100,000 ProCare members. About the same time, Apple instituted a reservation system for the ever-popular Genius Bar, allowing you to sign up for specific or next available time at a specific store, to view the current Genius Bar waiting time at any store using your browser from home or office, and to view the queue on LCD screens behind the Bar. In July 2004 a paging system began appearing at some retail stores, allowing the Geniuses to hand out pagers to those who need service, and for you to be alerted when a Genius was available to talk to you. The systems are by NTN Communications Inc., but the pagers are much more elegant than the ones shown on the company's Web site. Overall, I'd describe the experience of entering and browsing through the store as low-impact and touchy-feely, with lots of things to try out and use, and backed up with a knowledgeable sales staff. Here's my personal scorecard on Apple's store experience. Again, you mileage will vary, especially if you visit the store because of a product problem, return, etc. Submit you own experiences for my on-going store survey. You can provide Apple with specific information about your personal experience at its retail stores. Their "Feedback" Web page asks you 18 questions, and you answer with pull-down menus that range from "strongly agree" to "strongly agree." Grand Openings Even without the presence of Overnighters, the grand opening of an Apple store would be an "event." There are typically 200 people in line about 90 minutes before the opening, and sometimes more. Without being a snob, it seems that the people who believe they're arriving "early" get to the store between 5 a.m. and 6 a.m. They usually exclaim," Wow, I thought I'd be the first one here!" When we point to the person who arrived first, and explain what time they arrived, they usually walk away to the end of the line shaking their head. The overnight experience begins early on the Friday before the opening: we arrive, set up chairs in a row, talk to the store maintenance staff and Apple employees. During the afternoon there are a few passersby who have questions, and then the sidewalk traffic picks up in the evening as people come and go from the stores, theaters, restaurants that are typically in the area. Apple now has the final construction and touch-up work down to a science. Frequently the store looks hardly habitable 7-10 days ahead of the grand opening, and then suddenly it takes shape and looks absolutely finished at 10 a.m. on Saturday. Since the stores are built from a tried-and-tested template, things come together pretty quick. However, I have heard that at one store the table legs were considered too long, within 10 days of the grand opening. The grand opening was pushed back for at least this reason, and perhaps others. But carpenters came out and worked on the legs to shorten them, and lower the furniture appropriately. Attention to detail! So may people have asked me "Why?", that I'll try to explain why anyone camps out overnight in front of an Apple store. First, it's a social outing with like-minded people, much as you'd go camping with other people who appreciate Yosemite. It's a great time to share Macintosh stories on software, hardware and services, to trade favorite Internet sites, watch Quicktime movies, engage in iChatAV conversations, and generally have a good time. Second, arriving early allows you to be part of the festiveness of the grand opening, which you wouldn't experience by being further back in the line. Part of this is also the bragging rights to being #1 (or #10) in line. Thirdly, it's an opportunity to support the store's employees as they begin their new jobs, and the company as they open a new store. In the end, you have the feeling that you helped Apple contribute to the effort to promote the Macintosh. Our overnight group is pretty diverse: students, people looking for work, people working, older and younger. The only bond, of course, is that we're die-hard Macintosh users. That doesn't mean we don't have some critical opinions of either Apple or the Macintosh, but it's always an informed and constructive opinion. We're pretty well-equipped: Powerbook G4s in 15-inch and 17-inch configurations, iBooks, iPods, iSights, cellular Besides the "curiosity" questions, passersby frequently have technical questions about their own Macintosh computers, ask about "switching" from a Windows-based computer to Macintosh, or in rare cases engage us in debate over the better computer or operating system. I can say that we're a very mellow group, and unmoved by taunts from Windows users. We have a supply of official Macintosh brochures, and frequently hand them out to passersby who express interest in a specific Apple product. We anticipate that we've steered more than a few people into the store for help with an existing Apple product, or to explore purchasing their first Macintosh. I recall one Powerbook laptop user in particular who was very dissatisfied with his purchase--he claimed it just never worked right after he bought it. We answered a couple of his questions--he basically misunderstood some user issues. And then we pointed out that every Apple store has a Genius Bar, stocked with experts specifically trained to handle questions about Apple products--no charge! The young man seemed surprised, and relieved. Around 11 p.m. the sidewalk traffic tapers off, and we're left to entertain ourselves with watching Quicktime movies stored on hard drives, iChatAV conversations with strangers (we've linked up people in Germany, France, England, Boston, Arizona and other states). Things are pretty lively until about 4 a.m., when fatigue and the quiet takes its toll. Some get an hour or two of sleep, while others take off on walks around the area. Sometimes there are all-night Apple-branded security guards (at Palo Alto the guard was armed!) inside or outside the store. Around 6 a.m. the coffee stores (Starbucks, Peets) start to open, and Saturday foot traffic begins to increase (joggers, newspaper readers, etc.). The truck traffic increases, too, including the noisy garbage collection routines. Many of the people who believe they'll be first-in-line arrive around now...boy are they surprised! Read a long and detailed article from the Gold Coast (Fla.) Mac Users Group about the grand opening in Miami--it accurately describes the excitement. Apple employees begin to arrive around 8 a.m., usually after the cleaning crew arrives. The cleaning continues until just before opening time. There's lots of employee activity inside, prepping the store. About 15 minutes before the opening the employees may come out and give the entire line "high fives." Just before 10 a.m. the store manager appears, gives a short speech, and then waves everyone inside. The Overnighters jog inside, past a double line of Apple store employees, giving them all "high fives" along the way. There is music playing--sometimes "Love Shack," sometimes "A Beautiful Day," sometimes other songs. They let in the maximum number of people allowed by the fire code, and the inside crowd roams the store. There is usually a double-complement of employees, some from other area Apple stores.
Of course, the prize for all this adventuresome-ness is the official, grand opening T-shirt! Typically, the first 1,000 persons to visit the store (well, officially the first 1,000 to leave the store--they handed out when you leave) receive a T-shirt. They were originally handed out in clear plastic tubes with white plastic caps on both ends, designed to preserve this special T-shirt. However, at the Walnut Creek store opening the T-shirt did not include tubes--the shirts were just handed out loose. The Burlingame store grand opening returned to handing out T-shirt in tubes. At the Honlulu store opening, a troupe of Hawaian dancers performed in front of the store prior to the opening. At the Ginza (Tokyo) grand opening, congratulatory flower arrangements were placed on the sidewalk next to the waiting line. [other photos] Interestingly, the original grand opening T-shirts had a serif typeface (2-inch) in black with the name of the store, and a large blue, Aqua-style Apple logo. The newest T-shirts (Walnut Creek & Burlingame openings) had a smaller, sanserif typeface (1-inch) screened in gray, with a smaller, similar Apple logo. I have no idea why the design was changed. The T-shirt for the Ginza (Tokyo) store was black, with a white Apple logo and white lettering "Ginza" on the front. Lastly, besides the grand openings, Apple's retail stores have also generated long lines for two other events: the debut of the iPod digital music player, and OS X 10.2, or Jaguar (pronounced Jag-wire). I attended the former at Bay Street, and the latter at Palo Alto. In both cases I was about 30th in line when I arrived 90 minutes early. Oh, my! Trivia: The Bay Street store grand opening was slightly anti-climatic. The store had what they call a "soft" opening on Friday. When the first person got in line at 3 p.m. Friday for the Saturday grand opening, the store was already open! Passersby couldn't understand why we were camped in front for the grand opening--hey, the store is already open! The same thing happened to the Trafford Centre (UK) store in Nov. 2005. The Willow Bend (Tex.) store was nearly flooded before the grand opening, when a fire sprinkler system was tested without one sprinkler head attached in a store over Apple's space. Read ThinkSecret's account of the incident. The Rest I should mention that independent, Apple-authorized dealers have taken a hit even as Apple has continued to open its own retail outlets. ComputerWare, a major independent in northern California, unexpectedly shut down its stores in 2001, but was then purchased by another independent, Elite Computers. In turn, Elite unexpectedly closed all their branches in 2003 and then filed a lawsuit against Apple. Several other authorized retailers are angry at Apple for taking away potential business, but others say they appreciate the increased advertising and attention that the Apple stores create. [another article on original store openings] [latest lawsuit moves] The ComputerTown chain shuttered its stores in early 2001, saying sales had dropped off-- it apparently wasn't related to Apple's later retail openings. At the time the first two stores opened, Apple said that it had 3,000 retailers, and that its stores would work side-by-side with them to sell products. Apple's 2002 financial statement said, "While the Retail segment may cannibalize some net sales from the Company's preexisting sales channels in the U.S., the Company does believe that a substantial portion of the Retail segment's net sales are incremental to the Company's total net sales." That is, opening the Apple stores may take away sales from other suppliers (brick-and-mortar stores, on-line sellers, etc.), it believes the stores actually add to the overall sales total. Apple CFO Fred Anderson told a Sept. 2003 conference that the company believes that retail store sales are "incremental," and don't canabalize overall sales. More specifically, he estimated that between one-third and one-half of retail store sales are incremental, or add new revenue. The rest, presumably, take sales away from other retailers. I should also mention that Gateway, which markets custom-built PCs based on Windows, announced in March 2003 it would close 76 of its 230 stores and lay off those staffs to save money, hoping to stem continuing losses. Apple continues to be bullish on its stores, and says it's on track to open more stores. Anderson mentioned that Apple would never have as many stores as Gateway-- about 170 stores. In July 2003 Apple announced that Best Buy would again begin selling selected Macintosh products (iPods, iMacs?) at 48 of its stores, under a pilot program--the first such arrangement with a mass-market retailer in several years to sell computers. It's also Best Buy's third attempt to satisfy Apple's marketing requirements. In October 2003 vice-president for retail Ron Johnson said that the Best Buy program was only 90 days into the pilot program, and it was too early to tell how successful it is. [I visited a Best Buy store to evaluate the program] If you'd like more information on the on-going dispute between resellers and Apple, check this ThinkSecret Web article. The current national chains that have Apple reseller agreements are:
Looking Ahead
The stores have been profitable for the last nine quarters, and are contributing about 16 percent of Apple's total revenues and profit. In fact, during the first quarter of fiscal 2006 the Retail segment delivered a record $1 billion in revenues for Apple. Gateway shut down their retail operation in early 2004, lifting a considerable competitive weight from Apple's shoulders, and Dell Computer's kiosk operation presents only token competition for business. By all measures, it's all Apple in the retail arena right now.
Also check these special reports:
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In 2001 Apple Computer acted on a decision to open a series of retail stores that would display their entire line of computer products, software and peripherals. Part of the decision was based on Apple's declining share of the computer market. But the move was also forced by poor marketing of Apple's Macintosh products at other retails stores, most noticeable the Sears and CompUSA chains. Either way, Apple made it clear that it wanted more control over the retail selling experience for its products.
Apple stores are usually in the same mall as, or in the neighborhood of a standard set of stores, including: Gap, Abercrombie-Fitch, Pottery Barn, Williams-Sonoma, J. Jill, J. Crew, The Walking Company, Banana Republic, Victoria's Secret and The Gap.
For an academic explanation of Apple's retail strategy, download this 2002 
As for the stores' furniture, it's manufactured by 
I understand that Apple has taken to promoting employees into General Manager positions, which oversee the operations of two or more stores, and which is a way to cut costs.
ASCs assist the retailer's sales staff with demonstrations and selling Apple products, but they are not involved in any sales transactions, but rather hand off the actual sale to the retailer's sales staff. Further, the ASC does not do any daily household store chores, but does assist the retailer's staff in ensuring the general look and feel of the Apple area and Apple displays in other areas of the store are up to standards. An ASC candidate is required to have at least three years of retail experience in the electronics market.
On Oct. 21, 2005 Apple began the first major revision to the store lay-out. Check the details 
Apple also uses 
phones, PDAs, and other gadgets.
Apple typically runs 
Apple has committed to have up to 175 stores open by the end of October 2006, and just announced their first store on Continental Europe (Rome). They have signed long-term, non-cancellable leases for retail space, and announced a substantial capital expenditure for retail store facilities and equipment during fiscal 2006. Financial statements show at least a $1.4 billion commitment to the stores through leases and capital expenditures. There are at least 30 additional store locations identified by tips and other sources, along with a handful of "pretty sure" international locations.
