Good background data on Apple retail stores. They make the retail experience compelling focussing on simplicity, and interactivity, supported by the Genius bar, hosted by experts. Their sales per foot confirm the success of their approach.
The stores’ growth rate in revenue per store — an increase of 44 percent from 2004 to 2005 — eclipses industry norms. By comparison, major retailers like Target Corp., Wal-Mart Stores Inc., and Best Buy Co. Inc. saw growth rates of 3 percent to 6 percent in 2005.
Apple’s stores also reap more revenue per square foot than others: Its annual sales of $2,489 for every square foot of space is more than eight times that of Target and 2.5 times that of Best Buy, according to Forrester Research Inc. The stores, along with innovative products like the iPod, helped Cupertino, Calif.-based Apple reach a record of nearly $14 billion in revenue last year.
“What the stores have done is really build the Apple brand,” said Charlie Wolf, an analyst at Needham & Co., an investment banking and asset management firm. “It’s so consistent with what Apple is that it has really added value to the entire enterprise.”
Apple stores feature stark white walls and wood floors. Web-connected computers and iPods are arranged sparingly on tabletops, beckoning for a test drive. An abundant staff of knowledgeable salespeople — who don’t work on commission — are there to help when needed, but otherwise hang back, adding to the low- to no-pressure sales environment.
The larger stores host free how-to workshops, while all stores have “Genius Bars” where technicians fix Apple equipment and answer questions. “Other retailers are also increasing the hands-on experience, but no one has done it as well as Apple,” said Mary Brett Whitfield, a Retail Forward analyst.
Relevance to Bankwatch:
Bank branches haven’t changed significantly for ever, and there are lessons from the likes of Apple in how they focus the retail experience on what customers want and expect.
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