Apple's Retail Strategy

[MacRumors]

Businessweek provides an analysis of Apple's retail presence in the wake of recent Gateway store closings and reseller lawsuits.

While Apple's stores appear to be a financial success at this point, the author questions the results on Apple's marketshare, which hasn't increased substantially since the launch of Apple's retail initiative.

Related: Gateway to shutter stores, cut staff.

[BornAgainMac]

When they had the big long lines for Panther, I noticed a lot of people in the mall curious and even came up to the line to find out what the fuss was about. At least people are curious about the products with these stores.

[Grimace]

Even if this increases access for longtime Apple users - I say it's a success. You don't need to convert the world. Some are happy living in darkness.

[AirUncleP]

How does the general public know Apple Stores even exist?
TV ads?....NO
Radio?.....NO
Paper?.....NO
Mac nuts dragging them to the store to check out what a real computer can do?......Bingo.

[DeusOmnis]

I think Apple needs to do more TV ads in general, they've put no money into it. It's already the general consensus around here that macs are better than PC's, a little bit of advertisement about it and i think things could start to pick up.

[MacsRgr8]

Originally Posted by AirUncleP

How does the general public know Apple Stores even exist?
TV ads?....NO
Radio?.....NO
Paper?.....NO
Mac nuts dragging them to the store to check out what a real computer can do?......Bingo.

Exactly.

[mgargan1]

the apple stores may be a success numbers wise, but think of it in this regard. While apple may charge $60 for an ipod warranty, it costs apple absolutly nothing, well except for the box which may be $2... so they charge the apple store $5, and the rest is pure profit. So they play with the numbers so investors think the stores are a good thing. They also don't pay their help commission so they have fixed expenses. So the success you may see the apple stores having, may not be too too true. I do believe the stores are a good thing, but to what extent?...

[mgargan1]

oh yea, by the way... i did work at the gateway store in Gaithersburg, MD... and now that they closed all the stores I found a new job working for an apple reseller. They pay much better than the apple stores...

so go me!

[brhmac]

Originally Posted by AirUncleP

How does the general public know Apple Stores even exist?
TV ads?....NO
Radio?.....NO
Paper?.....NO
Mac nuts dragging them to the store to check out what a real computer can do?......Bingo.

The problem isn't with the general public. The problem is with Apple. iPod aside, the company does not do a compelling job of creating consumer interest in its products or articulating the value of its offerings.

Windows XP, as much as it pains me to admit, is a fine OS. It's clean, simple and does what people need it to do -- plus they can play all the new games.

Not important for me, but it's part of the perception people have about Macs. Great machines but no -- or very limited -- software.

Apple needs to get its advertising act together -- more functionality and less image -- and its pricing in line with the industry.

Dell offers a 2.8 GHz Pentium 4 machine for $500 -- and that price includes a 17-inch monitor, keyboard and mouse.

Does Apple have anything close?

[wdlove]

Originally Posted by BornAgainMac

When they had the big long lines for Panther, I noticed a lot of people in the mall curious and even came up to the line to find out what the fuss was about. At least people are curious about the products with these stores.

My wife and I had the same experience at our local Apple Store. We happened to be number one and two in line. A lot of people would look at us. We also had several ask us what the line what about. There were a couple that were familar with Apple. One of them had a daughter with a Mac, he was going to check with her about the update.

At my local store, there always seem to be alot in the store. Not really sure about the sales. I do notice customers at the registers.

[wrldwzrd89]

Originally Posted by Macrumors

Businessweek provides an analysis of Apple's retail presence in the wake of recent Gateway store closings and reseller lawsuits.

While Apple's stores appear to be a financial success at this point, the author questions the results on Apple's marketshare, which hasn't increased substantially since the launch of Apple's retail initiative.

Related: Gateway to shutter stores, cut staff.

Apple certainly has done a good job with their retail stores; I just don't see why Apple doesn't advertise their retail presence in their own stores (and in other retailers too) more. If Apple did that, they would surely get more business and more Mac users to boot. Why, Apple? WHY???

[nsb3000]

As much as I would love for apple to have 20-30% market share, I recognize that that is not going to happen...so as long as Apple is still selling enough computers to keep OS X a viable operating system (And that means they have to make profits too) I am happy. It looks like from this article that this is happening. Apple is not going anywhere for the foreseeable future, so I am content.

[cxny]

My office is right by the Apple store in Soho, so I'm in there quite a bit. Of the 60 or so computers on display almost all of them are occupied all day long by people checking their hotmail accounts. If you want to actually check out a machine, good luck! So the lesson here? You give free, unlimited, high speed internet access to people in a really nice setting and
they will come in to your store! But will they buy anything??

[Grimace]

Originally Posted by brhmac

Dell offers a 2.8 GHz Pentium 4 machine for $500 -- and that price includes a 17-inch monitor, keyboard and mouse.

Does Apple have anything close?

No, and for good reason.

1. I don't want a huge CRT monitor (viewable screen size 16 inches).
2. I want at minimum a CD/RW drive. Dell is offering a CD-ROM drive
3. You need more 128MB of RAM to run XP Home.

One shouldn't have to upgrade the computer as soon as you buy it.

I can't even find that deal on Dell's website. They have a $499 POS available. {edit} maybe I shouldn't be so hard on Dell. Mac users want the best from their computers, a lot of PC users just want to write papers, memos and check email. Dell knows that, and gives it to them. Outside of those bounds, their computers are crap. Inside that confined area, I'm sure they are fine.

[stoid]

Originally Posted by brhmac

Dell offers a 2.8 GHz Pentium 4 machine for $500 -- and that price includes a 17-inch monitor, keyboard and mouse.

Does Apple have anything close?

Please. Not the price argument again.

Yes, if you want a poorly constructed computer made out of cheap plastic parts that's likely to break inside of 2 years, buy a bargain Dell or HP or Gateway or whatever. If you want a quality machine that will easily run for 4+ years and still have a decent resale value after that, buy a Mac.

[spinko]

JUST GIVE ME A POWERBOOK REVISION !!!!!!

[crees!]

I have a friend that works at a Gateway retail store in the service department. They were only given a 1 week notice they were closing. Actually one week till the store closed to customers. They have another week once the store is closed to customers to finalize everything.

[Frisco]

What happened to Apple's advertising? It has almost become non-existent. The last Mac commercial I remember was for the G5 last Summer. In the Fall there were plenty of iPod commercials, but I don't even see those anymore, besides that's not Mac advertising.

I don't understand why they don't have a Mac marketing blitz. When Apple does come out with a commercial they are great! The problem is we have very few. I hope Apple has a new advertising campaign in the works for the Macintosh platform, but I have a feeling the only new commercials we will see are for the iPod.

I think Apple has to make some dramatic changes/moves to start to increase marketshare or companies will stop making accessories and software for my BMW

[Stella]

I'm sorry, but you have to upgrade a mac when you buy it - iBooks come with 128Mb, which isn't enough.. PBs 256Mb, which still isn't enough... When I bought my iBook, I had to instantly upgrade it - the memory.. so how is this different to Dell?

Originally Posted by carletonmusic

No, and for good reason.

1. I don't want a huge CRT monitor (viewable screen size 16 inches).
2. I want at minimum a CD/RW drive. Dell is offering a CD-ROM drive
3. You need more 128MB of RAM to run XP Home.

One shouldn't have to upgrade the computer as soon as you buy it.

I can't even find that deal on Dell's website. They have a $499 POS available. {edit} maybe I shouldn't be so hard on Dell. Mac users want the best from their computers, a lot of PC users just want to write papers, memos and check email. Dell knows that, and gives it to them. Outside of those bounds, their computers are crap. Inside that confined area, I'm sure they are fine.

[brhmac]

Originally Posted by stoid

Please. Not the price argument again.

Yes, if you want a poorly constructed computer made out of cheap plastic parts that's likely to break inside of 2 years, buy a bargain Dell or HP or Gateway or whatever. If you want a quality machine that will easily run for 4+ years and still have a decent resale value after that, buy a Mac.

I am on a Dell right now. It is a fine machine, runs perfectly, does what I want it to.

I love Macs. I've been using Macs since 1989. My most recent Mac -- the 3rd I've owned since 1996 -- had to be repaired because of a faulty inverter: It was 6 weeks old at the time. The two prior Macs had major system failures that lost ALL of my data. I've never had that happen with any Dell or Gateway PC that I've used.

Apple is not perfect. Its computers are not perfect. Dell's market share is what it is because it builds a good-quality PC, hits the price point consumers want and offers the functionality they need.

[AirUncleP]

I'd like to see an ad. explaining the use of iLife suite components.
Scenario:
1. Above ad. plays during Survivor.
2. Wife says, " That was neat honey, can our computer do that?"
3. Husband response #1 " Not exactly."
3. Husband response #2 " Well if I go out and spend $500 on upgrades we could do it....just not as easily."
3. Husband response #3 " Of Course! We own a Mac.!"

Note to Apple: Show the consumer what you can do.....Not a guy breakdancing!

[gbojim]

Originally Posted by Macrumors

While Apple's stores appear to be a financial success at this point, the author questions the results on Apple's marketshare, which hasn't increased substantially since the launch of Apple's retail initiative.

This guy must have had a hard time finding something to write in his column this week because that is a terrible analysis. His implication is that sales from the Apple stores were supposed to increase market share by attracting Windows users. What a pile of crap. The stores do not have the capacity to sell enough units to increase market share.

Apple's clearly stated goal in opening the stores was to attract Windows users by providing an attractive presence where their target demographic shops. If half of store sales are to Windows users and they are actually making money, it's no wonder Apple is so happy with their retail effort.

BTW, I took a client to an Apple seminar the other week and I had an interesting chat with an Apple marketing manager. She was telling me that Apple was trying to put together a national TV/print campaign to get folks to visit Apple retailers - both Apple stores as well as resellers. She said they wanted to run some special promotions and such. According to her, Apple could not get enough of the resellers to participate to make it work. Apparently, the stumbling block was Apple wanted the retailers to use some specific demos to show ease of use and convenience over Windows, but a lot of the resellers balked at Apple trying to control the sales process.

[jxyama]

Originally Posted by stoid

Please. Not the price argument again.

100% agree. price argument is stupid. someone looking for a $400 computer won't care what it runs - XP or Mac.

i think with retail stores, apple is doing what it needs to do: word of mouth.

changing an OS is a big deal for most people. if you only want to check emails and surf the web, there's no compelling reason to shell out more money to get a computer that's "different" from everyone else's.

something like an iPod will benefit more from instant return that is mass market advertising - because it's a self-contained device. it takes no more effort (if not less) to learn to use iPod than any other MP3 players out there. consumers wanting a portable digital music player have already made a committment to learn how to use a MP3 player. same cannot be said for consumers wanting to buy a new computer about learning the OS.

it'll take slow and patient effort to get the word out - that Macs can help people edit/manage photos better, that Macs can help people turn home videos into a DVD with beautiful menus, etc. most average consumers do not need to do these things - they have to becoming wanting to do these things. when they become wanting to do things, they will be able to justify paying more money and may start considering Macs.

having retail stores around to let people experience those will be far more beneficial than TV ads. afterall, it's hard to convince people how Macs can better edit movies than windows equivalents in 20 second spots.

[brhmac]

Originally Posted by carletonmusic

No, and for good reason.

1. I don't want a huge CRT monitor (viewable screen size 16 inches).
2. I want at minimum a CD/RW drive. Dell is offering a CD-ROM drive
3. You need more 128MB of RAM to run XP Home.

One shouldn't have to upgrade the computer as soon as you buy it.

I can't even find that deal on Dell's website. They have a $499 POS available. {edit} maybe I shouldn't be so hard on Dell. Mac users want the best from their computers, a lot of PC users just want to write papers, memos and check email. Dell knows that, and gives it to them. Outside of those bounds, their computers are crap. Inside that confined area, I'm sure they are fine.

What arrogance! Mac users do the same things as Dell users. Dell users do the same things as Mac users -- only for a lot less money.

Dell gives consumers what they want and has the marketshare to prove it. By virtue of your own logic, Apple is giving only a limited number of consumers what they want and has the marketshare to prove it.

Finally, what Mac doesn't need to be upgraded? Every line item on the order form after the specific model itself is an upgrade. A mouse is optional with Mac laptops -- and I think both the mouse and keyboard are optional with the desktops. You also have to buy a monitor with the Powermacs. Again, more options, and the cheapest Apple monitor is $700.

Cha-ching!

[Grimace]

Originally Posted by Stella

I'm sorry, but you have to upgrade a mac when you buy it - iBooks come with 128Mb, which isn't enough.. PBs 256Mb, which still isn't enough... When I bought my iBook, I had to instantly upgrade it - the memory.. so how is this different to Dell?

You're definitely right on the RAM issue, but otherwise, the internal components of a BOTTOM line Dell are dismal.