Aug 29

IN THE NEWS: How to Kill a Brand, Apple Store Edition

Photo Source: ArsTechnica.com

As someone who’s worked in retail before and who’s learned a lot of tough lessons about finding the balance between good customer service and corporate compliance, I have to say that I’ve always had a lot of respect for the way that Apple has approached retailing with its Apple Stores. The St. Louis store is just down the street from my office in the St. Louis Galleria, and the original store was so successful that it had to be moved to a storefront three or four times as large just to handle the massive amounts of traffic the store was generating. And what’s more, even with a much larger floorspace, the place is still constantly packed.

Compare that to the Best Buy or the Micro Center around the corner, and you’ll still find plenty of people buying electronics, but both stores are significantly larger and combined don’t seem to generate half as much foot traffic as the Apple store does. That’s hardly a surprise, since Apple Stores are reported as being more profitable per square foot than high-end jewelry stores like Tiffany’s.

But that may change over the next decade, and there could come a time where Apple Stores are a black eye for the brand.

I know, I know. It sounds crazy. But if you read this op-ed on Ars Technica, you’ll see that things are changing for the Apple Stores largely due to a shift in management. The new senior VP of retail, John Browett, comes from a UK consumer electronics retailer called Dixons Retail that has stores like PC World and Curry’s that are pretty much everything the Apple stores aren’t – namely, dark, dirty, crowded with product, and staffed by salespeople who are focused on upselling high-margin items instead of helping customers make the best decisions.

The op-ed goes on to explain that the stores are going to be less staffed during the holiday season and that financial incentives have changed for the employees. What’s worse, sales personnel are going to be encouraged to push payment through the EasyPay service (used through the iPhone), which isn’t tracked in their sales numbers. Demoralizing the staff and forcing them to do things that don’t make sense? That sounds more like Best Buy than Apple, doesn’t it?

Part of the appeal of Apple Stores is that they’re low-pressure, uncluttered and clean, putting an emphasis on the products rather than sales tactics. The people on the floor are extremely well-trained and know the ins and outs of everything being sold. The prices are high (most items are marked at full retail), but consumers are happy to pay them because they know that the experience is going to be great. Apple has hit on the perfect mix for retailing: a restricted, high-quality product line, showcased under the best possible conditions with the highest quality staff, and a brand that is both respected and considered “cool.”

It’s well-known that consumers hate high-pressure sales tactics, clutter and junk, and they’re only willing to put up with that nonsense if they believe they’re getting a deal. That’s fine if you’re carrying a bunch of product from no-name suppliers and you’re catering to bargain shoppers. But now that Amazon, specialty retailers and discount stores have risen to meet that niche, it’s not a game that a superior brand like Apple needs to play.

It’s one of those decisions that demonstrates why Apple under Steve Jobs was something special, and why Apple under Tim Cook is destined to decline. Over the last fifteen years, Apple has rebuilt its brand from a niche to the most valuable brand in the world. It’s proven that marketing can really begin at the product level rather than with an ad firm – Apple’s been so savvy and so cutting-edge as an expert at marketing that textbooks are going to use it as a case study company for years to come.

But now that the visionary CEO is gone and the money men are in charge, I predict that Apple’s brand is going to go through the wringer and emerge as a husk that only hints at its former glory. It happened once before, of course. But this time, the company won’t have a visionary to bring back when things start going awry.

Read the full op-ed at Ars Technica.