Thanks for Nothing Apple Store!
Remember when the Apple store was super cool and the busiest retail site in the whole mall if not planet earth?
Not sure either is the case anymore. Let me tell you about my visit to the Apple Store today.
I decided to replace my three-year-old iMac with another iMac. My 27-inch 2.8 dual-core Intel iMac with 4 MB of RAM has slowed down – a sign of trouble. In my experience, the time to buy is now.
I had been waiting for the Mac Pro – love the ads – but realized it is probably more computer than I really need. Plus, I have yet to see an image of one hooked up to a monitor that is actually working.
Could the MacPro’s sleekness present a wiring nightmare as displayed in this picture?
After much consideration and research, I determined a new 27-inch iMac with a 3 TB fusion drive was the way to go. With money to burn I headed down to the mall intending to plop down my credit card and come home with a brand new iMac. The weekend would be spent transferring files – or so I thought.
Arriving at the Apple Store the first thing I noticed was the lack of crowds. Sure, there were people in the store. Just no crowds. This was not at all as it was a couple of years ago when the iPad had just come out.
Few, if any, customers were noodling around on the 30 or so demo iPads, iMacs, and iPhones. The folks that were there were mostly concentrated in the genius bar getting training or attending to a repair.
Was the Help Helping?
The second thing I noticed was all the blue-shirted Apple employees. There was at least six were in the demo area where I was admiring my potentially new 27-inch iMac. Kudos to Apple for the employee-to-customer ratio!
Craning my neck in that important way that shouts, “Hey, I need help!” I was ignored. All six employees were apparently too busy talking with one another to make eye contact or approach me.
Taking matters into my own hands, I decided to walk toward two of them. They saw me coming and kept talking to one another while moving to another part of the store.
Shaking my head in frustration, I went to the genius bar area and found someone to help me.
“Can you tell me what iMacs you have in inventory? ” I asked.
“These here,” he said pointing me to look at the iPad sitting next to the iMac.
Professional buyers, these days, do extensive research before engaging the salesperson. Likewise, I was quite familiar with what I was looking at.
“I was hoping to get one with a 3TB Fusion drive!” I said. For desktops at least, hybrid drives are better than all flash say the experts.
“Sorry man, we only have the 1TB fusion drives here on our top of the line model. You’d be better off ordering what you want online!”
He then replied with his version of the “have I helped you with all of your needs today” question every salesperson these days seems to required ask – even when they haven’t helped with any of the customers’ needs.
“I can show you how to do that if you’d like!” he said.
Really, that’s the Apple edge in retail? Product not in stock but we can order it online together?
I told him that I was familiar with the “interwebs” and could manage that on my own. He chuckled.
I then left the store without making a buy.
Thanks for nothing Apple store!
Some Deeper Analysis – Some Questions Raised and Trends Spotted!
While this is one store, one customer, one product, and one time – the worst data set possible – it does point to some concerns that are clearly out there in the post-Steve-Jobs presently Tim Cook Apple organization.
1. Will there be another disruptive innovation from Apple?
When announcing the Mac Pro at the World Wide Developers Conference (WWDC) keynote, Apple executive Phil Shiller said, “Can’t innovate anymore, my ass!” Roars erupted from the Apple-friendly crowd. Investors did not respond to Mr. Shiller’s bravado with the same enthusiasm. The stock price declined for several weeks after the conference. Apparently, new operating systems (Mavericks and iOS) and a geeked-out high-end machine (Mac Pro) were not the Apple TV or yet-to-be-named innovation investors hoped for.
To be fair to Apple, disruptive innovations are very rare. This is definitional. Not only that, but disruptive technologies (like the smartphone) to gaining mainstream acceptance as described by Everett Rogers’ with his Diffusion of Innovations S-Curve is even rarer.
This is what made Apple so special. They struck lightning at least twice (iPod and iPhone). Maybe even more (iTunes, iPad, and Apple Store). Apple rode the wave from early adopter through to saturation several times making billions of dollars along the way. The hope investors and fans share are Apple can continue to mine this innovative gold.
The truth is many companies with billions in their coffers have tried to innovate over and over – to no avail. This is because successful adoption of technological innovation requires a bit of Kismet regarding price, timing, and acceptance by a most fickle public. Perhaps it is a bit unfair to think Apple can just go on innovating as Thomas Edison did, without their Thomas Edison.
2. Is Retail a good long-term play for Apple (or any technology company)?
When Ron Johnson and Steve Jobs unveiled their Apple Stores skepticism ensued. What does Apple know about retail? Hadn’t CompUSA, Circuit City, Best Buy, and most analogously Gateway all fail at successfully bringing technology profitably to the masses?
Apple Stores surprised everyone becoming the best sales-per-square-foot retailer in the world.
What made that so?
Turns out it might not have been the open store designs and ultra-hip help that were driving sales. A more likely explanation is the nearly exclusive access to Apple’s innovative products – mostly all in stock and ready to go at over $500 each!
When Ron Johnson recently received his pink slip from JC Penny, he probably gained respect for how hard it is to sell JC Penny products and how easy it is to sell Apple ones. Retail is a difficult business. Circuit City in “Good to Great” was held up as a shining example of a successful retail business with amazing strategy and leadership. They went bankrupt in 2009. Many of their stores are still vacant.
The advent of omnichannel (a customer orders online but picks up in the store) has sent retailers spending billions on new Point of Sale (POS) and inventory management systems. They all hope to compete favorably with that other giant disruptor, Amazon.
Will Amazon Continute to Grow?
Initially, Amazon also benefited from an unfair price advantage – customers not being charged sales tax. This has been widely legislated away. It remains to be seen how with this level playing field of price, Amazon will fare in soft goods and perishables where retailers have the showroom advantage.
Technology has been hardware and software. Yet, almost all software today is available in the cloud. Expensive and popular programs like Adobe’s Creative Suite are now Software-as-a-Service (SaaS) and on a monthly subscription. There is literally no more software to buy and bring home to install at a retail store. The software has no real showroom value.
With hardware, it remains what will happen with the Dell-innovated fully configurable hardware model that made the leader in PCs and laptops.
But what about all the traffic in the Apple stores for training and service? Should Apple double down on these two areas?
Service is hardly a money-maker with relatively low-cost devices (as opposed to autos). Most gizmo and gadget manufacturers go out of their way to avoid directly servicing their products in a tangled web of resellers, partners, and service providers. Here, Japan and Edward Deming had it right – manufacturing products without defects solves a lot of problems.
That leaves training. Boomers (and older) love face-to-face training. They love having a person show them how to do stuff. They’ll even pay $50K a year for their kids to attend a “traditional” university to earn a degree.
But teaching (and training) is undergoing the most revolutionary change in its history. Colleges are figuring out what businesses already have that online, on-demand training is the cost saving way to go. Not only is it cheaper, but when done well, it is better. Students learn and retain more. Online training programs become a reference-able 24/7.
Anyone who has used Lynda.com knows this is true when it comes to software related training. Could this be why they received $104 million in Series A Funding in January this year?
The other more serious issue is with the younger crowd, the Digital Natives. They have no problem going online to get answers. They do it every day with walk-throughs of favorite video games (and other things). Most wouldn’t be caught dead with an appointment for a one-to-one training in an Apple store to learn how to use iTunes. Is it any wonder the snicker that was present in the “you’d be better off ordering online” comment. Duh!
Today Apple still benefits still from best in class products. Their iPhone, iTunes, and iPad all have competitors breathing down their necks. None, as of today, have been able to overtake them in those areas.
The desktop, laptop, and above all, the retail store, however, face some far-reaching challenges.
After all, it’s hard to keep changing the world and everything they touch.
Postscript – Ordered my new iMac when I got home. Configured it the way I wanted. Arrived 3 business days later with shipping updates along the way. Flawless customer experience!
Collins, J. (2001). Good to Great: Why Some Companies Make the Leap..and Others Don’t (1st Ed.). New York: HarperBusiness.
Lynda.com funding info retrieved from: http://crunchbase.com/company/lynda-com
Rogers, E. (2003). Diffusion of innovations (5th Ed.). Boston: Free Press.
Shiller quote retrieved from: http://www.theverge.com/2013/6/13/4423844/cant-innovate-anymore-my-ass-apple