APPLE STORES Genius Bars and Siena Sandstone By Walter Isaacson Lea Stemmer 4/9/15 1

The Trigger/Initiation - Jobs hated to cede control Problem: - No control over the experience of buying an Apple product in a store (big box stores) Lea Stemmer 4/9/15 2

Problem of big box stores - No knowledge - No incentive to explain the specialty of Apple products Lea Stemmer 4/9/15 3

Idea -> Own shops for Apple “Unless we could find ways to get our message to customers at the store, we were screwed.” Lea Stemmer 4/9/15 4

The process Lea Stemmer 4/9/15 5

Step 1 – Finding the team (Preliminary studies) - Late 1999: Steve Jobs interviewed executives who might be able to develop Apple Retail Shops -> Trying to find the right team for the project -> Ron Johnson - vice president for merchandising at Target - passion for design Lea Stemmer 4/9/15 6

Step 2 – Scanning the environment (Preliminary studies) - Jobs and Johnson walking around a closed mall - Checking out different stores -> Way to find out what they want for Apple - Jobs‘ Decision: - only one entrance (more control) - best location (Malls or Main Street) -> people drop in by curiosity Lea Stemmer 4/9/15 7

“...once we get a chance to show them what we have, we will win.” (Steve Jobs) Lea Stemmer 4/9/15 8

Important factors - Size of the store -> Show the importance of the brand “The store will become the most powerful physical expression of the brand” (Steve Jobs) Lea Stemmer 4/9/15 9

Important factors - Only a few products -> Take it as an advantage! - minimalist and airy store, where you can try the products -> The stores should impute the ethos of Apple Lea Stemmer 4/9/15 10

The Prototype - Steve Jobs presented his idea to the board -> The board is against it -> Only one supporter: Mickey Drexler - Advice: Build a prototype on the Apple Campus Lea Stemmer 4/9/15 11

Designing the Prototype Duration: 6 months - wander around, finding new ideas - meeting every Tuesday - inviting friends - Jobs: obsessed with every detail Lea Stemmer 4/9/15 12

The Prototype - Jobs wants to avoid having a cash register counter → needs a specialist: Larry Ellison “...Steve gave us the exact, explicit recipe for how he wanted the checkout to work.” → Project Manager is giving the guidelines Lea Stemmer 4/9/15 13

-> Genius Bar Lea Stemmer 4/9/15 14

October Nearly finished Johnson: „the prototype is wrong“ -> The stores should be organized around what people might do Turning point: What is the project manager (Jobs) going to do? Lea Stemmer 4/9/15 15

Turning point - Jobs adapts the idea and changes the whole concept shortly -> Delay: 3-4 months “If something isn’t right, you can’t just ignore it and say you’ll fix it later...That’s what other companies do.” (Jobs) Lea Stemmer 4/9/15 16

January 2001 – Prototype completed - The board: enthusiatic -> approved the prototype A lot of critics from outside experts: “Apple’s problem is it still believes the way to grow is serving caviar in a world that seems pretty content with cheese and crackers.” (Joseph Graziano, Apple's former CFO) Lea Stemmer 4/9/15 17

The first store: Tyson's Corner, Virginia - May 19, : 5,400 visitors per week (in comparison Gateway: 250) - Revenue: $1.2 billion Lea Stemmer 4/9/15 18

Team Project Manager: Steve Jobs Project Assistant: Ron Johnson -Vice President for merchandising at Target - passion for design The board (includes Mickey Drexler, the only supporter of the project from the first moment on Lea Stemmer 4/9/ Larry Ellison (Cash register) -architectural firm of Bohlin Cywinski Jackson

Further Development - Still working on the perfect store Lea Stemmer 4/9/15 20

-> Special gray for the restroom signs Lea Stemmer 4/9/15 21

-> Staircases (see-through-look) Lea Stemmer 4/9/15 22

-> light wood floors -> original siena sandstone Lea Stemmer 4/9/15 23

- Since September 2006: all-glass storefront (before: black metal panels with white, back-lit Apple logos) Lea Stemmer 4/9/15 24

Today -453 stores in 16 countries -Store in Manhattan. 24/7 open, more gross per square foot than any store in the world Lea Stemmer 4/9/15 25

Lesson learned -Stick to your idea –> Project manager must be brave -Scan the environment -Choose the right people -Delay vs. Going public even if it is not perfect -Time triangle -Finished project -> still development Lea Stemmer 4/9/15 26

Questions? Lea Stemmer 4/9/15 27