aryayush
Aspiring Novelist
Apple’s Lesson for Sony’s Stores: Just Connect
*graphics8.nytimes.com/images/2007/05/27/business/600-digi.jpg
Customers at an Apple store in Palo Alto, Calif. Apple opened its first store in 2001 and now has over 180. More than half of each store’s staff works in post-sales service.
By RANDALL STROSS
Published: May 27, 2007
RETAIL is supposed to be hard. Apple has made it seem ridiculously easy. And yet it must be harder than it appears, or why hasn’t the Windows side of the personal computer business figured it out?
Of the many predictions in the world of technology that have turned out to be spectacularly wrong, a prominent place should be made for what the pundits said in 2001 when Apple opened its first retail store in Tysons Corner, Va. “It’s completely flawed,” one analyst said, and that was the conventional wisdom. Commercial rent and furnishings would be expensive, inventory tricky and margins slim. Experienced computer resellers were struggling, and no computer manufacturer had ever found success operating its own branded stores. Analysts predicted at the time that Apple would shut down the stores and write off the huge losses in two years.
That assuredly would have been the Apple store’s fate had Steve Jobs permitted aesthetic and design considerations to trump all else. But while guiding the planning for the stores in 2000 and 2001, Mr. Jobs took on a more ambitious challenge than building freestanding museums of design that would show the Apple flag and do little else. He set out to create the conditions most likely to convert museum visitors into actual customers, and then to make those customers feel that they were being pampered long after the sale was consummated.
At the time, retail stores seemed passé. Gateway Country Stores were trying to make a go of a combination of old and new, inviting customers to come in, touch, order — and then go home and wait patiently, because the stores did not carry any inventory. Dell’s build-on-demand model dispensed with stores altogether and seemed to embody the future.
Mr. Jobs understood, however, that his stores would sell not merely products but also gratification. He told the trade magazine Chain Store Age Executive in 2001: “When I bring something home to the kids, I want to get the smile. I don’t want the U.P.S. guy to get the smile.”
The stores were born fully formed and have not required any fundamental changes. The best innovation was present on Day One: the “Genius Bar,” with a staff of diagnostic wizards whose expertise is available in one-on-one consultations — free. Pure genius. More than half of the retail store’s staff is assigned to post-sales service.
Customer response is told in the numbers. Last month, Apple released results for the quarter ended March 31. More than 21.5 million people visited its stores, which now number more than 180. Store sales were $855 million, up 34 percent from the quarter a year earlier, and they contributed more than $200 million in profits.
For perspective, look at the parallel story of Sony, which in 2004 began its attempt to create a branded retail chain. That was the same year Gateway closed the remnants of its 188-store chain. Today, Sony has 39 Sony Style stores, built out from the flagship stores in New York and San Francisco. The company’s breadth of product lines in consumer electronics and related accessories, as well as computers, would seem to give it a significant advantage over Apple. But because Sony does not release data on the stores’ sales or profits, it is hard to assess how its retail venture is doing.
Last Sunday, I set out to have a look for myself. I began at Sony’s flagship in San Francisco, at the Metreon Center, the shopping and entertainment complex. The mall was crowded, but Sony’s store, measuring an enormous 20,000 square feet, was all but deserted. The two uniformed members of the store security staff matched the number of customers I could see browsing the store’s wares.
Then I headed for the Stanford Shopping Center in Palo Alto, where I could see a Sony Style store compete almost directly across from an Apple retail store. The weather was gorgeous, drawing the usual weekend throng to the shopping center.
Sony’s mall store was long and large — 6,000 square feet — and filled with curvy panels and chirpy taglines like “My Style” on the walls and plush theater nooks. Here, too, the sales staff seemed to outnumber customers.
A group of five young salesmen and saleswomen who stood near the door when I entered were so engaged in a private, and apparently amusing, discussion that my imploring presence failed to draw anyone’s attention. The only other customers in the store were at the far other end, near the PlayStations. I suppose that the employees near me had become accustomed to busying themselves with their own entertainments.
A few yards away was the Apple store, which is one of Apple’s newer “mini” stores, introduced in 2004 and only about an eighth the size of Sony’s Stanford store. It was simplicity itself: a rectangular space with products lining the two sides, laptops placed on a small table, open space taking up most of the room, and, of course, the Genius Bar. The store was packed, yet the sales people were alert and attentive.
Read more...
I found it to be a fascinating and insightful read. Give it a shot.
*graphics8.nytimes.com/images/2007/05/27/business/600-digi.jpg
Customers at an Apple store in Palo Alto, Calif. Apple opened its first store in 2001 and now has over 180. More than half of each store’s staff works in post-sales service.
By RANDALL STROSS
Published: May 27, 2007
RETAIL is supposed to be hard. Apple has made it seem ridiculously easy. And yet it must be harder than it appears, or why hasn’t the Windows side of the personal computer business figured it out?
Of the many predictions in the world of technology that have turned out to be spectacularly wrong, a prominent place should be made for what the pundits said in 2001 when Apple opened its first retail store in Tysons Corner, Va. “It’s completely flawed,” one analyst said, and that was the conventional wisdom. Commercial rent and furnishings would be expensive, inventory tricky and margins slim. Experienced computer resellers were struggling, and no computer manufacturer had ever found success operating its own branded stores. Analysts predicted at the time that Apple would shut down the stores and write off the huge losses in two years.
That assuredly would have been the Apple store’s fate had Steve Jobs permitted aesthetic and design considerations to trump all else. But while guiding the planning for the stores in 2000 and 2001, Mr. Jobs took on a more ambitious challenge than building freestanding museums of design that would show the Apple flag and do little else. He set out to create the conditions most likely to convert museum visitors into actual customers, and then to make those customers feel that they were being pampered long after the sale was consummated.
At the time, retail stores seemed passé. Gateway Country Stores were trying to make a go of a combination of old and new, inviting customers to come in, touch, order — and then go home and wait patiently, because the stores did not carry any inventory. Dell’s build-on-demand model dispensed with stores altogether and seemed to embody the future.
Mr. Jobs understood, however, that his stores would sell not merely products but also gratification. He told the trade magazine Chain Store Age Executive in 2001: “When I bring something home to the kids, I want to get the smile. I don’t want the U.P.S. guy to get the smile.”
The stores were born fully formed and have not required any fundamental changes. The best innovation was present on Day One: the “Genius Bar,” with a staff of diagnostic wizards whose expertise is available in one-on-one consultations — free. Pure genius. More than half of the retail store’s staff is assigned to post-sales service.
Customer response is told in the numbers. Last month, Apple released results for the quarter ended March 31. More than 21.5 million people visited its stores, which now number more than 180. Store sales were $855 million, up 34 percent from the quarter a year earlier, and they contributed more than $200 million in profits.
For perspective, look at the parallel story of Sony, which in 2004 began its attempt to create a branded retail chain. That was the same year Gateway closed the remnants of its 188-store chain. Today, Sony has 39 Sony Style stores, built out from the flagship stores in New York and San Francisco. The company’s breadth of product lines in consumer electronics and related accessories, as well as computers, would seem to give it a significant advantage over Apple. But because Sony does not release data on the stores’ sales or profits, it is hard to assess how its retail venture is doing.
Last Sunday, I set out to have a look for myself. I began at Sony’s flagship in San Francisco, at the Metreon Center, the shopping and entertainment complex. The mall was crowded, but Sony’s store, measuring an enormous 20,000 square feet, was all but deserted. The two uniformed members of the store security staff matched the number of customers I could see browsing the store’s wares.
Then I headed for the Stanford Shopping Center in Palo Alto, where I could see a Sony Style store compete almost directly across from an Apple retail store. The weather was gorgeous, drawing the usual weekend throng to the shopping center.
Sony’s mall store was long and large — 6,000 square feet — and filled with curvy panels and chirpy taglines like “My Style” on the walls and plush theater nooks. Here, too, the sales staff seemed to outnumber customers.
A group of five young salesmen and saleswomen who stood near the door when I entered were so engaged in a private, and apparently amusing, discussion that my imploring presence failed to draw anyone’s attention. The only other customers in the store were at the far other end, near the PlayStations. I suppose that the employees near me had become accustomed to busying themselves with their own entertainments.
A few yards away was the Apple store, which is one of Apple’s newer “mini” stores, introduced in 2004 and only about an eighth the size of Sony’s Stanford store. It was simplicity itself: a rectangular space with products lining the two sides, laptops placed on a small table, open space taking up most of the room, and, of course, the Genius Bar. The store was packed, yet the sales people were alert and attentive.
Read more...
I found it to be a fascinating and insightful read. Give it a shot.