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Just a Thought - More Stores! Should We Worry?

by

- September 21st, 2005

WooooooooooHoooo!

Apple is opening up another store here in Orlando!

This one is in Florida Mall, which is kinda strange because it is about 15 miles from the other Apple store in The Mall at Millenia.

I'm not complaining, mind you; I've always thought that the Apple Store in the Mall at Millennia was a bit too small, and I berated Apple for shrinking my store; I guess they are trying to make it up to me.

Now, Orlando has four major places to shop for the full line of Apple products; we have two CompUSA stores with Apple Stores-Within-a-Store, and the two Apple stores.

That's odd because I didn't know Orlando was such a hotbed of Apple activity. Oh, we like our Macs down here, and iPods are nearly as plentiful as anoles (those little green or brown lizards you see darn near everywhere in Florida).

I should have known that we could handle another Apple outlet; my little Apple Store in The Mall at Millennia is always packed, even on a Tuesday night. I guess that might have been too much of a good thing, and Apple decided to relieve some of the pressure on the wee store.

One thing does worry me, however; Apple has been busy opening stores like nobody's business, well, maybe like Gateway's business. You remember Gateway? They had all of those stores with the cow motif. I guess bovine inspired boxes weren't enough to keep customers coming back. Go figure.

When Apple first started opening stores there was the immediate comparison to Gateway, but, in truth, there were very few similarities: Apple hand picked the locations of its stores to insure that they would not only have heavy foot traffic, but also that the traffic be lugging heavy wallets.

Gateway, on the other hand, used the Dandelion Approach to locating stores: If it looked like a good spot to put a store, there you go. And they didn't seem to care how many stores were around; I believe there were 4 stores in Orlando at one time. I guess they were hoping that people would see the unique black splotches and say to themselves, "Hey, look! A cow flavored computer store! Let's go in."

Of course, we now know it didn't quite work out that way; and, as Apple began opening a small handful of stores, Gateway was closing big, giant handfuls.

Now Gateway does much, if not all of its business via the Internet and through vendors, while Apple has well over 100 stores in the U.S. alone, with stores in other countries as well.

True that Apple Stores are profitable, and that Apple's motto is that a store stays open as long as it is profitable, but I worry that too many stores will weaken the mystique that currently surrounds Apple Stores.

"Mystique," you ask? " What mystique? They are just friggin' stores, for cryin' out loud!"

Well, true that, Hamlet; they are just stores, but Apple Stores have got something going on that makes them money magnets. Even my little Apple Store has that certain something that keeps people coming back time and again, and usually with open wallets.

Is it the Genius Bar? Could be. I know I've had nothing but good experiences dealing with the Apple know-it-alls behind that counter.

Is it the notion that you can go in and fondle every manner of Mac and iPod available, all hooked up to great peripherals and accessories? Stop in any Apple store on any day and you are bound to see a lot poking, prodding, and fiddling going on. People who get stuff in their hands and have a good time with it usually are reticent to let the stuff go again; so they buy it.  

It could be both reasons and more, or none of it. But whatever it is, it is serving Apple well.

Maybe I shouldn't be concerned that the disease that affected Gateway stores might also infect Apple's. Maybe Steve Jobs is keeping an accountant's eye leveled on store profits, and an axe at the ready for the first sign of red ink on the bottom line.

Maybe I should just be happy that Orlando's big enough to host two Apple Stores, happy that I now have a choice to make: Do I stick with my little Apple Store or defect to the shiny new one.

Do ya feel my pain?

is a writer who currently lives in Orlando, FL. He's been a Mac fan since Atari Computers folded, but has worked with computers of nearly every type for 20 years.

You can send your comments directly to me, or you can also post your comments below.

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Show: Subjects Only | Full Comments
View Name:Guest
Subject: more stores ...
View Name:Guest
Subject: Just a Thought
Close Name:acdc1174 Posts: 693 Joined: 16 Apr 2004
Subject: Worry not my friend...

I was JUST in Orlando for about a month over the summer (we should have hooked up, but I was on business...sorry) and what you said about the store at Millenia is entirely true- Small and ALWAYS crowded. I frequent the store in Tamap at International Plaza- BIG and ALWAYS crowded. I don't thin k this is a case of overexpansion at all. I think that the choice of locations is key and those locations add to the cache' of the apple brand/image/shopping experience, unlike the Gateway stores which became the Kenny Rogers Roasters of the computer world.

Close Name:kenaustus Posts: 601 Joined: 27 Jun 2003
Subject: OK, I feel envy

Living in Tulsa we have a CompUSA with an excellent Apple Rep, but an Apple Store would be better. Four is not fair at all.

I was in Orlando over the last weekend Vern and I have to admit that while following my 4 year old granddaughter around WDW I kept thinking that Disney should make nice with Apple so they could get an Apple Store - or maybe an Apple Nation at Epcot. Lets face it - the iPod nano costs about as much as a meal in some of the food joints.

View Name:Guest
Subject: Less than Genius
View Name:Guest
Subject: "Well, true that, Hamlet"
Close Name:VSeward -   TMO Staff Posts: 971 Joined: 28 Jun 2001
Subject:

Quote
Guest wrote:
I've never sat at the Genius Bar at an Apple Store.
From what I hear, the "bartenders" are very knowledgable and helpful. What I do know from experience (I work a quarter mile from the Apple Store on Michigan Ave. in Chicago, so I frequently visit)is that their sales staff should probably be required to take an Apple IQ test. I once had to stop an Apple employee from trying to sell a customer a set of speakers with a USB connection to a guy with an iPod. Something tells me that wouldn't have worked out too well. I also went with my fiancee to help her purchase a new Powerbook last month and was told that I could get a fully loaded 15'' PB for 2350 with a Student Discount...I later found out that it was 2414 and didn't have two of the upgrades that were promised to her. The sales guy also tried to tell me that 1X1GB RAM was much faster than 2X512GB.
Part of my undying love for Apple is that I never have to settle for anything less than the best and everything Apple is tightly integrated. I would hate to lose my faith because they are selling to the masses. I wish Apple the best and would love to see them grow as a company, but not at my or any other loyal customer's expense.


That's odd because I've had exactly the opposite experience with the sales staff at the Apple Stores I've visited in the past.

For instance, I was having an issue with my iPod and I was in my Little Apple Store waiting for my apointed time at the Genius Bar. A sales rep came up to me and asked me if I needed help, I told him my situation. He took my iPod, brought it up in a factory mode I knew existed, but had no clue how to get to, much less understand what I would be looking at if I did. He reset some things and my iPod has been fine ever since. I never had to bother the genius.

I also eavesdrop on conversations between salespeople and customers no matter where I go. I hate folks who give out misinformation or lie about things to make a sale. I've never heard an Apple rep knowingly give bad info to a customer. I've heard them get corrected on things they admitted they knew little about, and I've seen them ask for help from other reps, and customers.

I think it may be an Apple policy to, above all else, be honest. I think the guy you ran into was either new or grossly misinformed. I'd be surprised if he lasts there without changing his ways. If it is more than one person, then it is the manager's problem, and that person won't be long on the job, I betcha.

Vern Seward

View Name:Guest
Subject: The difference between Gateway and Apple stores
Close Name:VSeward -   TMO Staff Posts: 971 Joined: 28 Jun 2001
Subject: True that...

Quote
Guest wrote:
Take a english class.

true dat.


You first. It should be "Take AN English class."

Vern

View Name:Guest
Subject: nice
Close Name:acdc1174 Posts: 693 Joined: 16 Apr 2004
Subject: My customer service experience.

In truth, I have found the associates at the International Plaza store to be very knowledgeable and helpful. The Genius Bar guys seem to be equally knowledgeable, but I really haven't needed them myself. I have been in the store when they are holding little instructional seminars and the "teachers" are quite good.

View Name:Guest
Subject: Gateway's problem with stores was...
Close Name:cooner Posts: 30 Joined: 17 Aug 2004
Subject: Apple Store / Disney Store

Your concerns sort of remind me what happened to the Disney Store. When they first opened, they were few and far between, and it felt like every store was something special ... a destination in itself to go find cool, unique stuff. Then Disney got greedy and followed the 'dandelion' approach, and the stores themselves got more like overpriced outlet stores than anything special, and, coincidentally, profits fell through the floor.

Hopefully Apple won't go that route.

Close Name:scotty321 Posts: 3 Joined: 23 Jan 2005
Subject: Sorry

Sorry, but as long as Apple's market share is as tiny as it is, opening more stores is only a GOOD THING. Plus, comparing Apple to Disney (as the poster above did) is ridiculous. If nothing else, if all else fails, Apple Stores are Internet cafes for people to check their email. Apple is the smartest company on the planet, and you're questioning their infinite wisdom?

Close Name:Bosco Posts: 999 Joined: 03 Jun 2002
Subject: Great place to meet hot chicks

The Apple stores have become a great place to meet hot chicks. Anyone else noticed this phenomenon? I think the analysts call it the "iPod Halo Effect".

Close Name:richb Posts: 27 Joined: 11 Mar 2004
Subject: apple stores

Apple needs to put the new stores in areas that don't have any third party resellers. Here in Northwest Indiana (pop. 400,000) there are NO places to buy a mac in a retail store. NONE, whatsoever. That means you have to go into Illinois to buy a mac at the retail level. But there aren't any stores in the south suburbs ether except for a Compusa in Orland. That means you have to go all the way to Oak Brook or to the Michigan Ave store (very cool store by the way) to get a Apple store. All the Apple stores in the Chicago area are north or west, none very close to here. Plus the areas to the north and west have third party resellers (some good some not). So Apple is competing with it own resellers, when no one is selling anything here.
There has to be other unserved areas around the country like this too. Areas with no stores, when apple is placing stores as close as fifteen minutes apart very bad move Apple. If they do that it will fail because profits (rents at malls are big bucks) will go down if they are too close.

View Name:Guest
Subject:
Close Name:VSeward -   TMO Staff Posts: 971 Joined: 28 Jun 2001
Subject: Re: apple stores

Quote
richb wrote:
Apple needs to put the new stores in areas that don't have any third party resellers. Here in Northwest Indiana (pop. 400,000) there are NO places to buy a mac in a retail store. NONE, whatsoever. That means you have to go into Illinois to buy a mac at the retail level. But there aren't any stores in the south suburbs ether except for a Compusa in Orland. That means you have to go all the way to Oak Brook or to the Michigan Ave store (very cool store by the way) to get a Apple store. All the Apple stores in the Chicago area are north or west, none very close to here. Plus the areas to the north and west have third party resellers (some good some not). So Apple is competing with it own resellers, when no one is selling anything here.
There has to be other unserved areas around the country like this too. Areas with no stores, when apple is placing stores as close as fifteen minutes apart very bad move Apple. If they do that it will fail because profits (rents at malls are big bucks) will go down if they are too close.


I feel your pain, but one of the reasons Apple Stores are successful is that locations are carefully analyzed for all sorts of factors, not just the 2 I mentioned in my article. They only put stores where they can be assured of high traffic with deep pockets. That's not to say that they wouldn't make money at other locations, but to set up a store just to serve an area ( like Gateway did) won't insure success.

Profits take into account rent and salaries, so in the end the is choice whether to put a store where you know you'll get traffic, or put it where you might get traffic.

The good thing is that vendors could service these areas nicely without fear of direct competition from Apple.

Vern Seward

Close Name:VSeward -   TMO Staff Posts: 971 Joined: 28 Jun 2001
Subject: Hot Chicks?

Quote
Bosco wrote:
The Apple stores have become a great place to meet hot chicks. Anyone else noticed this phenomenon? I think the analysts call it the "iPod Halo Effect".


Ummmm, OK. I won't doubt it; people find each other in the strangest places. Just don't tell me you want to be married in a Mac Store.

Vern Seward

Close Name:heifer Posts: 49 Joined: 25 Sep 2001
Subject:

Since our Apple Store opened up in Grand Rapids a few months ago, it has made my "job" easier. I (like most of you no doubt) am known as the Mac guy. Being able to talk about an iBook or something then send someone into the store to play with it and get more info seals the deal. I think simply making Macs accessible to people is putting them in their minds and selling them. oh, and the whole iPod thing ain't hurting either.

Close Name:richb Posts: 27 Joined: 11 Mar 2004
Subject: Apple stores

That's the problem with marketing "studies" that retailers use. It doesn't take into account the realities of a area. An Apple store in Southlake Mall in Merrillville (the largest mall in Indiana by the way) would be just as successful (or more) as the stores in Oak Brook or Old Orchard. The problem NW Indiana has is one of image. It has a bad image to outsiders. The community I live in has average income of well over $100,000. There are plenty of deep pockets around here, and that mall is very busy. So busy it is being added on to. The mall management say a apple store is one of the most requested to be added to this mall.
Its also too bad there are no third party retailers of macs here. I have looked into becoming a reseller but Apple is not looking for any though. I just can't understand why some areas are overpacked with locations when others are not being covered by anybody.
I guess that why retail in general has a high rate of failure. They look at "studies" that have mistakes and generalities of areas. They think there are no rich folks (or upper middle class) in NW Indiana. Big mistake, if another store is added to the Chicago area and it isn't south of Chicago then the Apple store idea is doomed in Chicago. No customer should have to go fifty miles for a location. That's the reason my local school district decided to go to Dell because of the lack of support apple has done in this area.

Close Name:cooner Posts: 30 Joined: 17 Aug 2004
Subject:

Quote
scotty321 wrote:
Plus, comparing Apple to Disney (as the poster above did) is ridiculous.


Feh. I wasn't saying Apple runs its stores like Disney did. I was just making a casual observation on Vern's angle for this story ...

Believe me, I have a LOT more faith in Apple (and Pixar) than I do in Disney. Really, I used to work for the Mouse.

View Name:Guest
Subject:
Close Name:acdc1174 Posts: 693 Joined: 16 Apr 2004
Subject: Re: Hot Chicks?

Quote
VSeward wrote:
Quote
Bosco wrote:
The Apple stores have become a great place to meet hot chicks. Anyone else noticed this phenomenon? I think the analysts call it the "iPod Halo Effect".


Ummmm, OK. I won't doubt it; people find each other in the strangest places. Just don't tell me you want to be married in a Mac Store.

Vern Seward


I don't know, somehow with all the white iPods around, it just seems right to me.

Close Name:VSeward -   TMO Staff Posts: 971 Joined: 28 Jun 2001
Subject: Here's a idea...

Quote
acdc1174 wrote:
Quote
VSeward wrote:
Quote
Bosco wrote:
The Apple stores have become a great place to meet hot chicks. Anyone else noticed this phenomenon? I think the analysts call it the "iPod Halo Effect".


Ummmm, OK. I won't doubt it; people find each other in the strangest places. Just don't tell me you want to be married in a Mac Store.

Vern Seward


I don't know, somehow with all the white iPods around, it just seems right to me.


Wouldn't it be great if you could somehow link iPods? Kinda like ganging drives. Then you'd not only have the wedding music and music for your reception, but music your 10 year long party afterwards!


You can daisychain FW devices... I wonder...


Vern Seward

View Name:Guest
Subject: I agree
View Name:Guest
Subject: Tourists
View Name:Guest
Subject: Employee retention
Close Name:jacrav Posts: 268 Joined: 04 Jul 2001
Subject: Re: Employee retention

The high rate of emploee turnover is something I had already read about somewhere before. It was then mostly attributed to low wages only. Your point about managers is very interesting, if maybe a little overgeneralizing from a (necessarily limited) personal experience:
- Due to the relative newness of the Apple Store concept, it is understandable that they have to hire managers out of the available pool of people with this type of experience … but
- I'm sure managers must go through a fairly thorough technical training program before being given such a primordial position. We all know, though, that bad habits are much easier acquiring than getting rid of … and many may get back into an established routine after a while …
- Manager is what its name implies: an administrative position. In my personal experience, the best managers to work with are "hands on" managers, people who don't mind sporting a salesman uniform and working the floor a few hours a day. This gives them an opportunity to go through the same customer contact as their team, and identify its peculiarities. It also gives them an opportunity to check on individual salesmen's performance, as they work side by side with them, spotting areas of weakness to be corrected, and areas of strength to be learned from … as they recognize that even a manager can learn from his/her underlings.

I wonder if the manager turnover rate is also high … which could be both a good and a bad thing, depending on who goes and who replaces them …
Apple stores haven't been in existence long enough to talk about "tradition" yet …
I wonder if there is a program geared toward providing extra training to regular salesmen, so they could be promoted to Genius, and then a business management program for Geniuses, so they could get promoted, if they so wish, to a manager position, as it seems obvious to me that internal training and promotion is often the best way to ensure quality staffing and the staff's understanding of, and compliance with, company policies.
Also, does Apple carry a program of "Secret Shoppers", who come in to inspect the stores and ensure that the customer experience is up to par ?

Close Name:VSeward -   TMO Staff Posts: 971 Joined: 28 Jun 2001
Subject: Re: Employee Retention

Some interesting observations.

I have no direct, personal experince with how management is handled, trained, and used in Apple Stores. I can say that the employees at My Little Apple Store do change hands often enough, but there is a core group that have remained long enough for me to get familiar with and learn their names. The manager has been the same person for quite some time now.

I have worked in retail, however, so I know that much of what you say, in general, can be said about any retail store, not just Apple's. The big difference, I believe, is that most folks who work at Apple stores like working there, at least until the shine of the experience wears off.

One of the problems with high turn over is that repeat customers who had a good experience with a sales person the first time, will want to deal with that person again. When I was in retail I had customers who would only come in on the days I worked. I don't know how much of that happens at Apple stores, but I can see that some may be put off by a constant change of faces.

Vern Seward

Close Name:jacrav Posts: 268 Joined: 04 Jul 2001
Subject: Re: Employee retention

Same here. When I worked in sales (furniture = expensive items), I had a number of customers who asked me what my day off was, so they wouldn't come back then and could be sure they dealt with me when they returned with their spouse to close the sale, which was nice, as I was on commission and didn't have to split it with anyone … Then, when I worked in restaurants, many of my customers would follow me from restaurant to restaurant and request my station … and usually tip me very generously.
Funny thing is the furniture store management didn't like that ! Restaurants, though, generally encouraged it …

Close Name:VSeward -   TMO Staff Posts: 971 Joined: 28 Jun 2001
Subject: Re: Retention

Quote
jacrav wrote:
Same here. When I worked in sales (furniture = expensive items), I had a number of customers who asked me what my day off was, so they wouldn't come back then and could be sure they dealt with me when they returned with their spouse to close the sale, which was nice, as I was on commission and didn't have to split it with anyone … Then, when I worked in restaurants, many of my customers would follow me from restaurant to restaurant and request my station … and usually tip me very generously.
Funny thing is the furniture store management didn't like that ! Restaurants, though, generally encouraged it …


I had the same reaction in the electronics store I worked in. Management seem to think I was giving something away, or dealing under the table. They never said as much, not openly, but I got a lot of snide remarks that hinted at their thoughts. Was weird because I was part-time and sold as much stuff as the full time guys, you'd think management would be happy.

The one thing I wouldn't do, which I guess was the real reason management was uncomfortable with me was that I wouldn't lie to make a sale. If something was a piece of crap I say as much, or at least point out the problems so that people would know what they were getting into. I would also not sell someone up if what they wanted was the lower priced item. I ignored spiffs and incentives.

And I treated everyone, regardless of who they were, or how they were dressed, with respect. The store I worked in was frequented by a lot of sharecroppers, many of whom were poorly educated and dressed shabily. Other sales people would avoid them, but I had no problem helping them. The other guys were always surprised when I'd make a fairly high ticket sale to one of these migrants.

Ahh, those were the days....


Vern Seward

Close Name:jacrav Posts: 268 Joined: 04 Jul 2001
Subject: Yeah …

In the first restaurant (a high-class French restaurant in Richmond, Va), a customer sat down with his wife and told me: "I'm a redneck, and I don't know anything about French food. You make our order". I chose Chateaubriand for two, carved tableside, served with Bearnaise sauce, with a bottle of nice Bordeaux wine. These people were delighted, paid their $60 meal with a $100 bill, asked me for my name and left after shaking my hand … $40 tip–in the 70s !
They became regular customers of mine, coming once a week with another couple. The restaurant owner's wife would laugh as they wouldn't have anyone else wait on them. Man owned a trucking company, probably made millions … and wanted to learn about French food. Ended up learning quite a bit, too … and also about good wine …

Close Name:jacrav Posts: 268 Joined: 04 Jul 2001
Subject: Yeah …

In the first restaurant (a high-class French restaurant in Richmond, Va), a customer sat down with his wife and told me: "I'm a redneck, and I don't know anything about French food. You make our order". I chose Chateaubriand for two, carved tableside, served with Bearnaise sauce, with a bottle of nice Bordeaux wine. These people were delighted, paid their $60 meal with a $100 bill, asked me for my name and left after shaking my hand … $40 tip–in the 70s !
They became regular customers of mine, coming once a week with another couple. The restaurant owner's wife would laugh as they wouldn't have anyone else wait on them. Man owned a trucking company, probably made millions … and wanted to learn about French food. Ended up learning quite a bit, too … and also about good wine …
The furniture store, though, had a policy that if you hadn't closed a sale within ten minutes, you called a manager, who would come and take over … and usually offer an additional discount or a lower quality substitute for what the customers wanted. I didn't quite toe the line, spending sometimes an hour or more with the customers, but ending up selling nice stuff that they would enjoy for a long time !