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Retail is theater.
Apple has the highest performing stores in retail history. There are 363 Apples stores worldwide, which combined to produce more than $11.7 Billion in revenues last year.
Measuring Retail Success
Sales per square foot is the primary measurement of store success. In 2011, Apple generated more than $6,000 per square ft. of retail space (which is by far the most in the world). Tiffany & Co generated $3,000 per square ft. of retail space during the same period. Apple also generates more foot traffic than any retailer in the world. According to TechCrunch, the average Apple Store has more than 18,000 visitors per week. THAT’S CRAZY! Did you ever wonder how that’s possible? The easy answer is, “well, Apple makes exceptional products.” Although that’s true, it doesn’t explain why people insist on buying directly from Apple –especially since its $100 cheaper to buy your Mac Book Pro from Best Buy. Obviously, people have to want what you sell. But to reach above average sales per square ft. you have to think beyond the actually product. Your store has to be more than a place to acquire merchandise. The shopping experience has to be exciting, entertaining, and emotionally engaging. Always remember that retail is theater.
In the US, annual store sales in the range of $300 per square ft. are “okay.” If your store is significantly below that you definitely should go back to drawing board and reassess your business model. However, if your sales per square ft. are okay, here’s how to make it even better:
The fact of the matter is, “people ALWAYS judge the book by its cover.” Your retail space is your stage. It has to be well designed and engaging. Stage your space to make an emotional connection and conjure up certain sentiments in your customers that reinforce your brand. Apple’s tagline is “Think Different.” Is their store even remotely similar to anything you’ve ever experienced before? The open layout, huge fixtures, Genius Bar, and fully loaded Mac Books give off a vibe that is just magical.
Value Added Mindset
Most retailers think in terms of dollars and cents. “How do I sell more stuff?” Although that is indeed the goal, the focus is all wrong. They should be thinking, “How do I create value [for customers] beyond the transaction?” Examine your purchase process. Is there any way to make the process more exciting by using technology? Would an iPad kiosk help customers better understand complex components of an item? Would an actual display add value by providing design ideas (IKEA)? Apple adds value with their “Try before you Buy” proposition. All of Apples products are loaded with applications that you’d actually use. They’ve even got specialist roaming around to show you how to use those applications. They’ll configure your Mac before you roll. If you have a problem, just bring it to the Genius Bar for one on one, face to face technical support. NO PHONE CALLS TO INDIA. NO OPERATING MACHINES. Interacting with real people is real value. “Apple is a relation business and much as it is a computer business.” ~ Ron Johnson, retail guru, designer of the Apple Store, and current CEO of JCPenney’s.
DID YOU KNOW? Statistically speaking, it is harder to get a job on the Apple sales floor than it is to get accepted to Harvard. In 2009, The Apple Manhattan store received 10,000 applications. They hired just 200 people (Apple’s acceptance rate is just 2%. Harvard gets above 29,000 applications for 2000 slot, that’s a 7% acceptance rate). Another thing you should know is that a potential Apple store manager goes through a series of 7 interviews before getting hired. Why? Because Apple only tolerates A-players, and they want to make sure a manager’s personality matches the brand and the vibe that they want for their stores. Apple doesn’t want a sales pitchey environment. Therefore, they don’t use a sales commission compensation package. Apple specialist don’t sale, good products actually sell themselves. The specialist’s job is to help customers find the product that solves their problem or satisfies their desire, even if it’s not at Apple. The human resource is the most influencial resource. Build a team of A-players that naturally represent your brand. Train them well, treat them well, and your customers will ultimately benefit.
It is easy to generalize takeaways based on the performance of the successful few. Apple is indeed a very special company with a strong brand and billions of dollars’ worth of resources. Most of us can’t afford to do what Apple does, but we can think how Apple thinks…. Different. Reimage your retail space. Use excitement, entertainment, and real emotional engagement to add value in way that others don’t. If you build it, they will come….and buy more stuff.