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 – I love the ads – but realized it is probably more computer than I need. I have yet to see an image of one hooked up to a working monitor.
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 to the mall 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, I noticed the lack of crowds. Sure, there were people in the store. Just no crowds. This was not 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 there were primarily 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. 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 critical way that shouts, “Hey, I need help!” I was ignored. All six employees were 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. 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 the iPad next to the iMac.
Professional buyers these days do extensive research before engaging the salesperson. Likewise, I was pretty 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 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 require to 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.
That’s the Apple edge in retail? The product is not in stock, but can we 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.
This situation bothers me, 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 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. 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) 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 adoption to saturation several times, making billions of dollars. The hope investors and fans share Apple can continue to mine this innovative gold.
The truth is many companies with billions in their coffers have tried to innovate repeatedly – to no avail. Successful adoption of technological innovation requires a bit of Kismet regarding price, timing, and acceptance by a fickle public. Perhaps it is a bit unfair to think Apple could continue innovating as Thomas Edison did without Thomas Edison.
2. Is Retail an excellent 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? Didn’t CompUSA, Circuit City, Best Buy, and most analogously, Gateway 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?
It 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 tricky business. Circuit City in “Good to Great” was a shining example of a successful retail business with great 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 Continue 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 no more software to buy and bring home to install at a retail store. The software has no real showroom value.
With hardware, what will happen with the Dell-innovated fully configurable hardware model that made the leader in PCs and laptops remains?
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 many 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 history. Colleges are figuring out what businesses already have online; on-demand training is the cost-saving way. Not only is it cheaper, but when done well, it is better. Students learn and retain more. Online training programs become reference-able 24/7.
Anyone who has used Lynda.com knows this is true regarding 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 daily with walk-throughs of their favorite video games (and other things). Most wouldn’t be caught dead with an appointment for 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 from best-in-class products. Their iPhone, iTunes, and iPad have competitors breathing down their necks. None, as of today, have overtaken them in those areas.
However, desktop, laptop, and retail stores face some far-reaching challenges.
After all, it’s hard to keep changing the world and everything they touch.
Postscript – I ordered my new iMac when I got home. I configured it the way I wanted. I arrived three 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