I Will Be Vindicated: Apple Retail Store, Revisited March 16th, 2000 The first undertakers in all great attempts commonly miscarry, and leave the advantages of their losses to those that come after them. Samuel Butler By now you heard the latest round of rumors concerning a chain of Apple-branded stores. I wrote in a previous column that this, among other things, was a damned-good idea. I didn't get any flaming responses from my last column, but I did receive a few messages stating that I was wrong headed in my belief that Apple should create its own retail presence. Most cited the sagging economy, Apple's small market share, and the resultant loss of a retail presence in stores like CompUSA, Sears and Circuit City. The same reasons cited to argue against an Apple Store are, ironically, the same reasons I use to argue for the store. My overriding argument should be obvious, though: Apple's current retail presence sucks, a few notables notwithstanding. CompUSA, for example, has been selling Macs for the last three-to-four years, and their effort is still less than desirable; the only reason they do so well is because customers have nowhere else to go! The Sears initiative seemed hopeful in the beginning, but even that is proving to be much ado about nothing. Circuit City? Don't go there. Now let's look at the aforementioned arguments against Apple's opening a chain of stores: 1) Personally, I think a sagging economy is the perfect time to start such a venture. The economy is cyclical and will get better, so why sit on our hands and wait for that. People still have money and need or want new computers. Besides, the precedents and indicators for Apple's assured success are there: Apple already makes a good profit from its on-line store; Gateway's "Gateway Country" stores rake in hefty profits. I'm sure that Apple can make a far superior retail experience than that PC purveyor; Gateway, like all PC makers, have no style. Style sells. Style is the definition of marketing. 2) Lest we overlook it: Apple's small market share is a creature of Apple's own making. Apple can grow the market share any time the company's management wants. The true problem isn't market share. The real problem is that Apple has a history of not being able to keep up with demand (can you say Motorola?). I believe that once that hurdle is overcome, it won't matter if Apple has a million stores. But that is a topic for another time. My point is that the market share argument is a moot point. Build it, and they will buy. The problem is that Apple can't build it fast enough nor in enough quantity. To paraphrase Guy Kawasaki, "market share, shmarket share." 3) "But Apple will lose valued retailers if Apple opens its own store," many say. Trust me. CompUSA and the other big ones won't abandon Apple so quickly. I'm sure that the Mac still brings in about 15% of the CompUSA's revenue. You don't just throw that away. Sears and Circuit City? Who needs 'em? The ones we should worry about are the small VARs who have stood by Apple through thick and thin. Their fate is the big question mark. I don't believe that Apple wants to cut them off. At least I hope not. Keep in mind that Apple's store presence won't be universal. So, someone has to service the smaller markets. There is also another overriding consideration we need to keep in mind: we are living in a time when the economy is in flux. We are changing towards that society described in Alvin Toffler's The Third Wave, a time in which the old ways of doing things just won't work any more. Customers want more. Service is paramount. The time is prime for Apple's move into the retail space. Also, keep in mind that Mac marketing isn't the same marketing mentality that we are used to in the PC sphere. Apple Computer is not a run-of-the-mill computing platform. It takes an out-of-the-ordinary approach to marketing and selling such an out-of-the-ordinary computing lifestyle. Yes, I said lifestyle. Nothing about the Mac nor Apple is ordinary. That's why, I think, it is about time that Apple considers a retailing strategy that reflects this extraordinary quality. Your comments are welcomed.