What’s the Apple Store without Apples? Empty.

January 1, 2012 | blog | By Mike Sullivan

This must be the six-millionth piece written about Apple, but it may be one of the few that’s not about the love. OK, just a little love. Like so many, I absolutely love the products. And that’s why I pay too damned much for them and willingly subject myself to what must be among the most god-awful retail experiences in the western hemisphere. There, I got it off my chest. Apple is anything but perfect. Only those afflicted with scales the size of apples over their eyes could see the Apple Store experience as pleasurable. True, the stores are usually crammed full of customers, but these enthusiasts aren’t all there to buy new products. Anyone who’s taken even a passing glance at the service area – self-described by Apple as the “Genius Bar” –knows the stores are often stuffed with people just trying to get answers to product questions and help with problems. It’s a take-a-number-and-don’t-leave-the-store-until-we-call-you system that makes even the most chaotic doctors’ offices seem like well-oiled customer-loving machines.

In a recent Harvard Business Review Blog post, Ron Johnson, the chief architect of the Apple Store “experience” had this to say:

“Any store has to provide products people want to buy. That’s a given. But if Apple products were the key to the Stores’ success, how do you explain the fact that people flock to the stores to buy Apple products at full price when Wal-Mart, Best-Buy, and Target carry most of them, often discounted in various ways, and Amazon carries them all — and doesn’t charge sales tax!

People come to the Apple Store for the experience — and they’re willing to pay a premium for that.”

Johnson is taking over as CEO of J.C. Penny ostensibly to try to replicate for the century-old retailer the feeding frenzy that is the Apple Store experience. I hope he sorts out a few things before he fires his team for failing to pull off that highly improbable task. Contrary to Johnson’s assertion, the reason for Apple Store’s success is, indeed, the product. Subtract the killer Macs, the culture-changing iPhone, and the absolutely awesome iPad, and you’re left with big empty spaces in the highest-priced malls across America. Without all those brilliant products the Apple Store concept simply turns to dust.

Which brings me to my point. As the authors of, “The Discipline of Market Leaders” point out, companies can effectively differentiate based on one of three factors: product, service, or price. Sure, a small sampling of companies manages to create distinction based on two of the three, but not very many. Lexus comes to mind. They offer a class-leading product, and revolutionized the service experience when they entered the industry in the late 90s. But rare companies like these are the exceptions that prove the rule. In fact, once lauded by the auto industry for its visionary design, in recent years Lexus has been criticized for falling off the design pace of competitors like Mercedes-Benz and Audi.

Whether it happens by design or default, it is widely recognized that the most successful companies succeed because they commit to doing one thing better than anybody else. The idea is supported by a meta-theme that runs through countless business books: you can’t be all things to all people. And, the one thing around which successful companies make a primary commitment to create advantage inevitably ties back to their product, their service, or the superior value they deliver.

This doesn’t mean companies like Apple, whose primary commitment is to product, must willingly surrender territory in the areas of service and value, but the natural laws of business always seem to conspire against their efforts. An arrow has but one tip, after all.

As long as Apple continues to create imaginative computing tools that people love, the Apple Store experience will play second fiddle. And, those responsible for that store experience should remember the product development team in they’re prayers.

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Mike Sullivan

President at LOOMIS, the country’s leading challenger brand advertising agency


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