The Real Reason Apple Retail Stores Flourish

| John Martellaro's Blog

One of the classic Steve Jobs videos is his introduction to the first Apple retail store in Tyson's Corner, Virgina in 2001. In that legendary video, Mr. Jobs lays out his vision for what those stores would do for customers. Because other similar stores had failed, pundits assumed the Apple store would as well. Here are my observations why Apple flourished.

The retail business is tricky, especially so in the age of Amazon, point and click (or tap), wish lists and free two-day delivery. (Amazon Prime.) However, one must remember that there is a class of products that need some customer care and feeding (as with computers and smartphones) and there are light bulbs and laundry detergent.

The genius of Steve Jobs was to recognize that the business of retail computers wasn't just about sales. Instead, it was about making great products and then providing an awesome purchase and support experience. Computers aren't perfect and no human being knows everything. And so a friendly place to buy, learn, congregate and occasionally get a computer (or iPad or iPhone nowadays) working again is an oasis in a sea of merchants trying to sell ho-hum, complex products to confused customers and all the while trying to squeeze pennies from a stone.

That marriage of simplicity and elegance that Mr. Jobs imagined comes at a price. When a company makes the very best, it can justify charging a premium. Where the Apple retail stores fit in was a happy marriage of consumate customer assistance and the low perceived level of complexity of the product.

When those two concepts merge, the retail experience becomes a booming success. I think of it like this.

The upper left section, when the product is premium, the assistance is high, and the perceived level of complexity is low, is what I call the region of success. Nordstrom understands this. Coach and Brooks Brothers understand it too. They also reside in the upper left section.

On the bottom right is the region of death. The perceived complexity of the products is high (PCs, routers, etc.) and the genuine customer service is minimal. That's how CompUSA failed. Plus, salespeople were looking out for themselves, not the customer, via spiffs.

The other regions can be successful and muddle along with varying profit margins, but they're not going to be beloved. They're an essential part of life. Mundane on the lower left, confusing, wearying and expensive on the upper right.

In the video above, Steve Jobs not only tapped into the desirability of that easy to use iMac, he also touched on themes that are fundamental to family and life: "Music, movies, photos and kids (education)." So not only did these stores sell products, they tapped into the pulse of American digital life.

A final design element that makes these stores so compelling is that the layout invites customers to come in and hang out. While some stores are just stacks and shelves, the architectural design of the Apple stores makes them both landmarks and pleasant places to be. This trend is getting even stronger in the new designs, starting with Apple's flagship store in San Francisco this week. See: "Apple Stores get major makeover."

Image credit: Elizabeth Weise, USA TODAY

Apple's retail stores may have changed in some ways over the years. The online app stores have eliminated the need for boxes of software with a CD inside.  The now iconic wooden tables were introduced. But the combination of enthusiasm for the product and enthusiasm for just being there remains unmatched.

My colleague Bryan Chaffin made this observation about the Steve Jobs video above. "We often look back, but Steve Jobs never did."

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Lee Dronick

I saw segment on the news today about Apple redesigning the stores, a few have been done. The Genius Bar is now the Genius Grove and there are other new names for areas in the store.

Gerald F. Shields Jr.

Actually, because Apple’s products are mostly online, the stores don’t have much of an inventory physically at the stores. I still remembered during my brief time in retail that it costs a lot of money to stock and display the products in the stores. Apple is one of the very few that doesn’t have to. Also, it’s the few places were the POS terminals are iPhones and iPads, but that’s a nice gimmick.

Gerald F. Shields Jr.

Oh, I forgot: Remember when it was tough to find 3rd party software and products for you Mac because it costed too much to develop and market it, and then you have to get retail store chain to carry it? All that stopped with the advent of the App Store, thus, (1) You didn’t have to go to a retail store to purchase it and (2) For the software and product developers, they didn’t have to spend much money to post it at said App Store. That gave the smaller developer some leverage over the larger, well established ones like Microsoft and Adobe and of course, that still led to less inventory at the stores to handle. Think about it: You go to Best Buy and then to the brick and mortar Apple Store and you see the difference.


I’d like to think Apple Stores would do better if they were closer than 150 miles from my town.

We have half a dozen Apple Stores that are all between 150 and 220 miles from the third largest city in the state of Missouri, with a population of almost half a million people, home to three major and several other minor Universities.

We do have a ‘Simply Mac’ (by GameStop) in the big mall, but that’s hardly the same thing.


He was masterful at something modern day Silicon Valley absolutely sucks at: understanding the human part of the equation. Under Jobs, Apple created technology and experiences that accommodated our humanity, not experiences that expected us to rewire ourselves to accommodate the tech in pursuit of the lowest common denominator and the highest profit. I really do believe that in this regard, innovation died right along with him, by and large. Even Apple stores are a lesser experience these days, alas.

Landon Miller


What alt form of reality do you live in that has Spfd listed as “almost half a million people” residing there?? Last I checked 165k was a little high…

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