Apple Retail

Those familiar with the UK’s PC World store chain will probably suppress a groan at its mention. It’s a box-shifter store aimed squarely at the masses. However, while there this afternoon, I was floored to see an Apple store-in-store inside.

In a sense, it’s not a surprise. PC world drives a lot of footfall, and any manufacturer would want in on that. The shocking part is the difference between the two.

PC World:

• Stores are huge, and contain all the big brands. Hence, a certain level of knowledge is required on the customer’s part to make sure everything works together.
• Customers, on average, have no knowledge whatsoever.
• Sales assistants generally hate their jobs and the general public.
• One of the most fun games you can play, besides trying to FDISK all the Windows machines, is Find The Sales Assistant. PC World TV ads usually contain three sales assistants in one place chatting about the deals, which is how I know the ads were not shot in store.
• Customers hate sales assistants and get the impression that they don’t know anything. In my 15 minute visit, someone managed to direct me towards getting a firewire cable for connecting my USB camera. PC World’s staff turnover is pretty high, and high turnover means short training periods.

That all happened because PCs and high tech contains a consumer segment, and it’s not necessary to invest in better training / pay in order to generate turnover.

Apple retail:

• Stores are a set of big rooms rather than a big warehouse, as the product line is pretty small. Apple designs to make things easy to use, and assumes little knowledge on the part of the consumer to make sure things work together.
• Customers exist in two distinct sets – the straight Mac faithful who know everything about their beloved, and those best described as “Apple curious”.
• Sales assistants generally love their Jobs (geddit? I’ll get my coat) and want to do everything they can to convince the general public that Apple is a good idea.
• Sales assistants aren’t too pushy, but at the click of a button they appear like Aladdin’s genie. They have business cards they give to you if you’re going to come back.
• Customers love sales assistants because it’s such a relief to talk to someone in a computer store who wants to talk to you and knows what they’re doing.
• Although I don’t know about Apple Retail’s staff turnover, I’d expect it to be relatively low, as it’s a pretty prestigious job if you’re already a Mac nerd.

That all happened because Apple PCs and high tech appeals to the premium consumer segment, meaning much better product margins, but customers expect “value added”, i.e. better product quality, and marketing-assisted cool.

So why did they do it?

My conjecture is that it’s all about segmentation. I’d guess that their segmentation strategy looks like this over time for the Mac:

1. Those working in graphics: Happy accident due to better graphics, screen and tight integration with Adobe products
2. Student demographic: Cooler, multimedia focus, and appeals to this segment’s need for differentiation
3. Black roll-neck psychographic: Those types of people who want to be associated with good aesthetic design

It’s logical that when the segment they’re targeting becomes saturated, they need to create products or brand images that appeal to broader segments so that they can maintain growth. It’s difficult for me to substantiate that without any data, but here’s a picture of the University of Missouri:

So we can guess that Apple are starting to saturate their latest targeted segment, and are now looking to move into a larger one. That segment could well be the average Joes that shop at PC world.

Does Apple Retail work?

To quote Will Smith, hell yes. I’d love to quote some proper figures to you, but I don’t have any, so I’ll be hand waving and anecdotal instead. There’s a Sony Ericsson store on Kensington High Street right here. If you’re ever in Kensington, go in – it’s a great location, and the store itself is laid out neatly and sparsely, showcasing each of the pretty decent SE Walkman phones. But it’s empty. All the sales advisors will be standing around discussing last night’s football. The brochures will look pristine, as if they have never been touched. And you will be the only customer in there.

Clearly, Apple has a secret sauce in their retail mix.

Inevitably, clueless PCW customers will wander up to the Apple people asking where they can find printer paper, or AAA batteries. Apple’s sales people will go for a beer at the end of a long day of evangelism with their purple-shirted PCW colleagues. Cross pollination is inevitable.

Looking at Apple’s oasis of … sauce … inside PC World’s warehouse of suck, one wonders how such dissonant cultures will be able to work alongside each other.