Apple Store is Genius May 30, 2008
Posted by geoffwolfe in : Off Topic , add a commentI will admit I thought the Apple Store was a bad idea when they first opened. I saw them going into high-end shopping centers like the store in Walnut Creek, CA located next door to a Tiffany store. How could a traditionally low-margin business justify expensive-as-hell retail locations? I figured Apple expected these to be just cost-of-sale demo centers / brand-builders and never expect the stores to be profitable. Again, I admit I was wrong. When Apple choses a location, they do so with the requirement that it be profitable within a year.
“It was very simple. The Mac faithful will drive to a destination, right? They’ll drive somewhere special just to do that. But people who own Windows - we want to convert them to Mac. They will not drive somewhere special. They don’t think they want a Mac. They will not take the risk of a 20-minute drive in case they don’t like it. But if we put our store in a mall or on a street that they’re walking by, and we reduce that risk from a 20-minute drive to 20 footsteps, then they’re more likely to go in because there’s really no risk. So we decided to put our stores in high-traffic locations. And it works.” - Steve Jobs
The aspect of the stores I believe to be the smartest thing they did is the Genius Bar. I’ve had nothing but excellent experiences with the support I’ve needed with my MacBook and iPhone. I’m not one to run to technical support when I first have a problem but will dig into it myself until I exhaust all options in the guides or online. My MacBook’s keyboard cover cracked and they fixed it at no cost. My iPhone had some problem with the audio and they fixed it on the spot. The people staffing the bar are not the clueless types you likely find at big-box retailers, but are “geeks” (in a complimentary way) who really know their stuff.
What makes the bar genius is that customer and technical support for most other consumer products sucks. The shift to online and off-shore support to cut costs leaves the consumer feeling isolated (for the record, this is true for Apple online/phone support too). Ever try Linksys support? You know what I mean. The Genius Bar gives consumers an outlet (lifeboat) to go and see someone in person and explain the problem first-hand without the barrier of impersonality and communication. Sure, the stores and bar can be crowded, but you can make an appointment online, often for the same day.
Apple has gone against the group-think, MBA-concept, that there is always a race to the bottom for margins in the consumer electronic/computer space and there is nothing you can do to fight it. Using the Apple Store, they have justified the higher margins they charge for their products and made a profit on the vehicle itself. It’s not the first time that Apple went against the grain when it comes to sales strategy. When they opened iTunes, they offered songs for a flat 99 cents — no bundling, no tiered (discriminatory) pricing. This goes against the conventional wisdom for pricing where you should attempt to claim all levels of a consumer’s likeliness to pay for something.
Apple is a great case study in how a company should keep its head down on its core principles and strategy and throw out the MBAs who say they are wrong. At MessageDance, we have the same belief with a focus on what we believe our users will want; we will go against the social media early adopters who are ga-ga about life-streaming aggregators but don’t see the value of a service for mainstream social media users who need to simplify the way they share their stuff in the first place.
Blogged with MessageDance using Gmail | Reply On Twitter