Apple Retail Brenneise, Daniel BUS 527 5/22/14

History Apple was struggling as a company in the late 90’s. Macintosh had lost its luster and Apple was struggling to innovate. The stock price had plummeted from $70 to $14. After buying NeXT, Jobs became CEO and began a secret project.

History Cont’d Jobs secretly began interviewing executives who could begin opening a string of stores. Jobs envisioned his computers standing by themselves, not next to an outdated PC. He wanted a store where people could find out how great Macs were. After a time, they picked Ron Johnson who was a vice- president at Target.

History Cont’d The first Apple Retail store was opened in 2001 at Tyson’s Corner Center, Virginia. The second one opened 3 hours later in the Glendale Galleria. There were close to 7700 visitors in the first 2 days alone.

Initial Feeback The Apple Store was predicted to fail because of the small size. Typically sales per square foot were used to measure the sales of a store. Though there was interest in the stores, sales were generally low.

Expansion The launch of the iPod generated a lot of interest around Apple, and the Apple Stores. Apple introduced the idea of the Flagship store Though there was interest in the stores, sales were generally low.

What made the Apple Store Different Apple wanted a store with only 1 entrance and a simple layout. Why? So they could control the experience of the customer. Detail, detail, detail. They obtained floor stones from a private family quarry, which yielded only about 3% of what Apple would purchase. Clean, simple, and inviting appearance were the Apple Visual standards.

What made the Apple Store Different The Genius bar is a service center where patrons get service for their computers and mobile devices. Face to Face customer service, and relationship building. Built relationships with customers, and invited them back for personal training..

Genius Bar and Personal Training Scheduled technical support that was free of charge. 1 year of personal training, with the purchase of a mac, for $99. The idea was to build lasting relationships with the individuals, and WOW moments with the product.

The Success of Apple’s Retail By 2010, Apple’s Fifth Avenue Store was the highest revenue per square foot in the world. The annual revenues were near $10 Billion. In 2012, Apple became the most valuable company in the work with a market capitalization of $623.5 billion. There are now over 400 retail stores open in many countries around the world.

Ron Johnson and JCPenney Ron Johnson stepped down from Apple and went to work for JCPenney. Johnson Overhauled the company’s pricing structure and gave a flat price with no coupons or discounts. Critics say that he did not show much enthusiasm for the company, and that disconnected him from his customer base. There was no trial run for the discounted pricing and customers were introduced to unfamiliar business practices. Johnson Was released in 2013 and they hired back the old CEO.