Apple's New Retail Strategy

Forget the Naysayers, Apple is Finally Catching a Clue.

by David Lang (Posted: 5/15/01)

At last, Apple has officially owned up to its worst-kept secret: its new chain of retail stores. Because it's far more difficult to conceal a storefront under construction than it is to keep a Cube or TiBook safely locked in the bowels of One Infinite Loop, Apple's plan to open its own upscale retail stores has been well-known for months. And in that time, there have been plenty of armchair CEOs raising loud objections and flatly declaring why the strategy will never work.

Meanwhile, every rank-and-file Mac user has been secretly praying that a new Apple store would open in his or her hometown. Why? Because we know what the naysayers don't: that Apple cannot rely on anyone else to effectively sell its products.

Apple Store:

I've been to Best Buy, CompUSA, and Circuit City, and I'm here to tell you that these stores do virtually nothing to increase Apple's market share. Even if their Mac sections are actually staffed with a few knowledgeable Mac salespeople (which is rare), these stores force customers to march past aisle after aisle of bargain-basement PCs before they ever discover the Apple "store within a store." Having a small subsection of a PC-oriented megastore, no matter how attractive or well-staffed, does nothing to dispel the impression among the average consumer that the Mac is little more than a somewhat-hip-but-largely-incompatible PC.

As for the Mac-only resellers languishing in rundown strip malls across the country, many of them are indeed likely to fold in the face of direct competition from Apple; but Apple can no longer afford to die a slow death out of fear of alienating its existing resellers. Cliff Edwards of Business Week argues that "rather than taking on the retailers who ought to be its partners, Apple would do better improving how it works with them"; but while Apple certainly deserves much criticism for how poorly it has dealt with its retail partners, I believe Edwards' assertion ignores the fundamental failure of Apple's partners to grow the Mac's marketshare. After all, a Mac-only retailer is even less likely than a computer superstore to draw new customers to the Mac, since only people who are already interested in Macs typically enter such stores.

In short, the forces drawing customers away from the Mac are legion; while Apple's retail presence has, until now, done very little to expose new customers to the Mac's advantages, and in many cases, has actually done more to hurt sales than to help them. So forget the naysayers, and feel for the loyal Mac resellers who are likely to suffer, but don't question the wisdom of Apple's new retail strategy. Apple absolutely must do this if it is going to increase the Mac's visibility and win customers away from the Wintel juggernaut.

Now the question remains: will Apple's trendy new retail stores accomplish its goal of increasing marketshare? I believe it will. In fact, I believe the Apple stores will be such a raging success that by year's end the only criticism anyone will be able to raise is that Apple should have done it years ago. Here's why:

According to an article at MacCentral, Apple has come to the conclusion that "'destination' locations (such as Best Buy and Office Depot) won't work for the 95 percent of non-Mac computer users." In other words, people who intentionally go to a store specializing in computers and electronics typically have some idea of what they are looking for, and it is very hard to steer those people toward looking at a Mac unless they had already intended to do so. The end result is that the Macs that are sold at these stores are almost exclusively being sold to existing Mac users rather than to new customers. According to Steve Jobs, Apple's new strategy will be to "ambush" non-Mac users "by being where they're already at, by locating in high-traffic gathering places, such as malls, hip streets, and the new lifestyle centers, such as coffee shops."

Ever since the debut of the iMac, Apple has been churning out stylish new products that appeal to consumers on an almost visceral level. Yet few people who aren't already Mac users actually get a chance to see these machines in person, much less to play around with them and see what they can do in a favorable environment. With posh, visually appealing stores in "high-traffic gathering places," Apple will draw consumers into a setting in which every detail communicates the idea that using a Mac is just plain cool. Everywhere they turn, they'll be presented with the siren song of a new "digital lifestyle." They'll be shown how they can make their own movies, record their own music CDs, publish their digital photos on the web, even burn their own DVDs--all without having to earn a degree in computer science. They'll be able to sit down and watch demos of Apple hardware and software on a 10-foot video screen. They'll see Microsoft Office running on a Mac, and Macs running Windows-only software via Virtual PC. They'll see Mac OS X everywhere and be shown how clean and inviting the interface is. They'll come away saying, "I didn't know Macs could do that!"

Having wandered into the Apple store to satisfy their curiosity, many of these people will then go into traditional PC-oriented computer stores and come away missing that sense of style and excitement that they experienced at the Apple store. They'll find themselves thinking, "Yeah, I can get that PC for several hundred dollars less, but man, those iMacs are just so much cooler." In short, they will have developed an emotional attachment to the Mac and its promise of a digital lifestyle--an emotional attachment that's more effective than any rational argument for the Mac's superiority.

So, I say, bring on the Apple stores! Only by getting people to "Shop different" will Apple get people to "Think different" . . . and ultimately, to Buy different.

David Lang is CMUG's Content Editor. David works as a developer of Accordance Bible Software, and lives in Maitland, Florida with his wife and four children.