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15 Retail Lessons From the Worlds Highest Volume (Per Square Foot) Retailer
Years ago when we shopped for a computer, our choice was to go to OfficeMax, Best Buy, Circuit City, and stores of that ilk, or Gateway, Dell and Radio Shack. Then there was the Costco’s, Sam’s Club and then all the other independent technology stores. They all did pretty much the same thing. You learned from a sign of features or you had a salesperson read to you off the sign of features. They gathered your purchase together and checked you out at the register and then sent you over to the checkout and wished you luck. Before you left, they may have given you an 800 number you could call for technical support, if you were lucky. Then you got home and began loading up all the software and registering everything on line. Apple computer was hardly a thought. They were that strange company that made good-looking things that were supposedly expensive. They were also the ones that had the following of some real gung-ho enthusiasts that many thought were bordering on being some sort of cult. Remember those days. Real computer geeks didn’t give Apple a second thought. After all you couldn’t add boards, and plug in and build your own tower. What was wrong with this company?
Apple couldn’t get any respect or shelf space in many retail chains, and when they did, the displays were a shambles in the stores as a result of being neglected. The people that sold them gave them little respect and didn’t really understand what Apple was about or how to sell them. It was as if Apple had been marked with a large “A” painted across their products to brand them as less than acceptable. The attitude towards Apple reminded me of how adulterers were treated with a large “A” marked on them by the Puritans. Remember, The Scarlet Letter, with Demi Moore?
Meanwhile everyone that could stick some circuit boards into a tower were selling virtually the same product. They all tried to add their own little gimmicks or special graphics boards to set themselves apart. Then the usual Microsoft software of the day was downloaded into them and they worked (some more smoothly than others). All came with the “fatal error” message from time to time. There was nothing special about any of them other than they continued to get faster as chip technology improved. Along with the advances came tens of thousands of known software bugs which required constant patches and updates…and that was before you dealt with the security and virus issues.
There’s More Than Meets The Eye
Apple has never been satisfied with their product or their service. They are constantly trying to raise the bar in the way their products work and interact with their customers. I often wonder where the industry would actually be today if Apple hadn’t been pushing the envelope. Once they opened their own stores, they took the same approach with their retail stores. And once again, those skeptics who don’t get Apple, predicted the failure of their stores within about a year or two. One more interesting aspect of all this, is the timing and growth of Apples’s retail stores. It seems to have coincided with the general death of chains selling computers such as Gateway, CompUSA, Circuit City, and many others during this same time period. Meanwhile, Apple quietly continued to work to make the technology-buying experience something that has been among the best consumer retail experiences around in any market.
Those people who don’t get Apple are now saying the same things about their stores as they did their products i.e. “You’re paying for gimmicks and looks.” But there’s a lot more to the Apple retail experience than clean modern stores, bright lights and premiere retail locations with great glass staircases. If you don’t believe me, go build a store with a supersized glass walls, large heavy wood tables, and a great glass staircase and see if your sales become even a reasonable fraction of the $4,046 per square foot for the Apple Store (with online sales â€¨it’s-$5,914)
One Important Lesson
Here’s the big difference right here: “Apple understands that having satisfied customers isn’t good enough anymore. If you really want a booming business, you have to create raving fans.” If you are a retailer, you need to memorize that statement and if you don’t get Apple at all as an outsider, you must not understand that Apple lives and practices that philosophy and whoever you’re buying your computers and gadgets from probably doesn’t get it. That’s the dirty little secret!
Consumers don’t care about electronic gadgetry for very long. You can only get so far on that. Ask Sony! They care what the products can do for them. Consumers also care a great deal about the experience they have to go through in order to purchase those products they need and want. Whether it’s a computer, a phone, a car or a boat, a lot of it comes down to the buying experience! You can buy Teddy bears anywhere? Why did Build-A-Bear become such a sensation? It’s the experience and the emotions! People feel good about what they do and what they buy at Apple. Apple makes it fun, and they remove the pressure and they make products that do what their supposed to do. Too often, the larger more substantial purchases, seem to come along with a clumsy and lengthy sales transaction. Anyone buy a car, some furniture or a boat lately?
Should Apple Hard Core Fans Be Called Apple Cores?
Just what are we talking about when we mention Apple hardcore fans? According to a new BBC documentary, tests on Apple hardcore customer advocates has found brain activity virtually the same as in religious worshipers. Using an MRI (magnetic resonance imaging) test, neuroscientists found when hardcore Apple fans are shown images of the company’s products, the same portions of their brain lights up in the same way as a person of faith does when shown religious imagery. The BBC in London reported that they witnessed something more like an evangelical prayer meeting than a chance to buy a phone or a laptop.” The documentary illustrated that a number of people at a recent store opening in London England had come from the U.S. and other locations around the world to wait in line for the doors to open. When the store finally opened, these fans found virtually the same things they could find at the Apple location that was closest to their homes. This actually reminds me of those who follow rock groups like The Rolling Stones, U2 and others around the country and the world, to hear the same music over and over again that they could have seen and heard in their own cities.
A Different Retail Experience
Have you ever been to one of these stores where the definition of customer service is, “we’ll try to ring you up once your ready to buy and if you just want to look we’ll hover over you like a vulture until we finally get a chance to answer a question and then we’ll read off the sign or information stickers about the product for you as if that is our purpose. Once you really do want help, it may take you 10 minutes or more to get someone’s attention. And then once we take your order, we’ll probably need to call a manager to come over and help the salesperson with the point-of-sale system.
Apple is once again changing the way things are done, even at the retail store level. While they’ve been doing it for years, they are still “practicing what they preach” once again by offering, clean lines, a simple uncluttered environment, reliability, service, ease of use and listening to their customers so that they can run their retail business the same way they build their devices. They are also using technology and software to deliver the best customer experience possible. One innovation was deemphasizing the purchase itself, by eliminating the check-out line and the POS terminal. Their system was called “EasyPay” and it let salespeople wander the floor with wireless credit-card readers and ask, “Would you like to pay for that?” Even that system is already being improved and replaced. The Genius Bar, was another innovation. It is staffed by what Apple calls, “Creatives” who offer one-on-one training on everything from putting together your salute to Grandma, to how to be a deejay on your computer.
Apple’s retail experience is one major reason why Apple has become “the force” in the industry, and that experience explains Apple’s success at attracting new customers who in the past would never have considered the Apple brand. Apple’s philosophy with its stores, seems to be to let customer explore and have fun and be self-sufficient on their own until and unless they need help, and then they’re promptly available for you in a multitude of ways to help and support you before, during and after the purchase.
Do We Still Have Some Doubters Here?
Well since they are the only computer manufacturer running double digit sales increases, they dominate the phone industry with the iPhone, they dominate the music industry with iPod and iTunes, and they dominate the computer pad business with the iPad, I am sincerely hoping you skeptics are not going to try and tell me that their retail success is just a coincidence too.
It All Shows Up In Sales Per Square Foot
While it is hard to generalize about all retailers. Big box stores traditionally may generate $250 to $350 in sales per square foot per year, while a well run smaller store of approx. 2000 square feet may generate sales as high as $700 per square foot per year. Before Apples stores, Tiffany jewelers had the highest sales per square foot of any retailer in the country (currently $3070). Apple has now dwarfed the figure along with sales of all other retailers as well, including $1,776 for Coach – $880 for Best Buy. But this was all before they made the latest changes in their stores. I guess they weren’t satisfied… Is this company driven or what?
Now Apple will be shifting the focus of it’s in-store classes, it has offered for years, in order to simplify and offer more tips and tricks for the iPad and iPhone, especially since these are closer to the devices of the future. Yes seminars on movie editing and digital photography will still be offered. The big changes inside the store there will now be iPad sales stations, or as Apple calls them, “smart signs” -You will be able to tap a button for help, and the picture of an available sales rep shows up on the iPad with a promise that he or she will be right over to assist you. Apple has also been quietly testing “personal setup” for customers in all its stores. Purchasers of Apples computers, the iPhone, iPod, iPad or Apple TV – could have the sales staff add their e-mail settings, set up an iTunes account and download favorite apps for them with very little effort. Apple is setting aside a dedicated, marked area in each store for this service.
More Confirmation From Other Retailers
Nordstrom is taking a page from the Apple retail playbook and is rolling out a series of iPad touch based systems for their retail stores. While Nordstrom wrote the book on customer service and had a reputation for service, decades before Apple existed, they seem to want to stay at the cutting edge of customer service as well. As disclosed in an earlier article, other retailers are discovering more great ways to make use of this gorgeous piece of technology including Sears, K-Mart, J. C. Penney, Puma, Gap Inc., Amazon.com Inc., eBay Inc., Gilt Groupe, The Golf Warehouse, QVC, HSN Inc., Toys ‘R’ Us Inc., and Wine.com have jumped on board. Meanwhile, Apple has not been trying to emulate anyone else. Their attitude has simply been, “Why copy when you can create?”
Last but not least, while I haven’t mentioned the heroic retail customer service stories that Apple is famous for, it’s funny you don’t seem to hear the same stories about Microsoft, Gateway, Dell, HP, or Sony. Maybe some of these stories have become more legend in some cases than fact (although I can tell you some pretty impressive personal stories myself) there really is an important accuracy and soul about these stories. Apple has taken the experience of buying something expensive and complicated to a new very high standard in retailing. And in the end, that leads to surpassing customer expectations and that leads to sky rocketing sales.
At the very least one could certainly make a good argument that Apples retail stores have been a “core” reason in contributing to Apple’s success. Regardless Apple has succeeded because they give a lot of attention to a lot of details all aimed at more than satisfying the customer.
15 Retail Lessons To Be Learned From Apple
Have a passion for serving your customers, and put the customer at the center of what you do.
Start with the philosophy that you are there first to solve problems for customers, NOT to sell them lots of stuff.
Sell solutions or benefits. Sell what your products can do for your customer, rather than features
Sell great products and provide great service, and don’t worry about being the low price seller.
Work to simplify the purchase process.
Continually look for ways to improve your customer service.
Understand the goal is not customer satisfaction, but customer loyalty.
Many of Apples legends of customer advocates came as a result of a customer complaint or problem. How you take care of it is what generates great word of mouth!
Work to understand all of your customers’ needs-some of which they may not even realize they have,” (one training manual says) â€¨
Keep any technology current that involves serving the customer better.
Stand behind your products and/or service
What can you do to make the buying experience fun and/or memorable?
Be disciplined in all areas. Apple’s raining manual indicates that in six months time, if employees are 6 minutes late, three times or more, they can be dismissed.
Work to control the customer experience to their benefit. (Apple has made painstaking efforts in this area.) For instance, in their training manual, Apple store technicians are even told specifically what to say to the customer using the right choice words when it comes to listening and understanding.
Give more thought to your guiding principals as a business rather than policies. Policies were made to be broken.
Note: Apple does not make use of sales quotas or commissions for their people.
“I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake.”
A 2001 prediction by David Goldstein, president of Channel Marketing, about Apple’s then newly launched retail stores
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