High Apple Store Traffic Distorting Mall Rent, Lifting Mall Sales

[xizdun]

This is genius, lucky for Apple.

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Actually, no I didn't.

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The iPod kickstarted the growth, which evolved into the iPhone. Without the iPod, the iPhone wouldn't have been possible. Make a stacked chart that combines the iPod and iPhone, and you should see upward growth.

 

[JackieInCo]

And yet I never walk into an Apple store, no matter how crowded when I don't get good service.

I refuse to go to any Apple store because they are so busy.
I order anything Apple from either the online store or just go to BestBuy.

 

[BornAgainMac]

I think the heavy crowds ruin the Apple store experience. I wonder if Apple should split the Mac store separate from the iOS store and have a separate store for watches, rings, necklaces, and Apple belts.

 

[TheYellowAudi]

I like to read this article every once in a while just for fun.

http://www.bloomberg.com/bw/stories/2001-05-20/commentary-sorry-steve-heres-why-apple-stores-wont-work

That's a great article. Thanks for posting. It points to a bigger problem in our society, though; that all the 'experts' that we pay (or that just get paid in general) to guide where our investment dollars go or whatnot are just talking heads that ultimately know very little more than any of us in the greater society about any given topic.

I usually feel pretty strongly that posting in forums is a waste of time as again, most people just like to see their name up on the screen while they spout off nonsense about something they know nothing about, but it really annoys me when reporters state something as fact when it clearly is either an opinion or speculation.

I especially loved the lines "'They should [do it like this] that's how everybody else does it.' And 'Maybe it's time Jobs stop thinking quite so differently.'" Maybe it's time that people who have an opinion keep it themselves....

Those guys are a bunch of chuckleheads. Every other company mentioned in the piece (save for BB) is out of business (and Sears was around for over 100 years). Meanwhile, as we all know, Apple has become the most valuable company in the world and amassed almost #200Bn in cash. Maybe ol' Steve was on to something...

Do I think Apple is infallable, or that they'll be around in 100 years & leave the legacy that Sears did? No, but I certainly think they'll leave their own legacy behind and that opinion pieces have no place in respected publications/website.

Everybody says the Watch (luxury fashion) is a business that they have no business getting into. (Like music, phones & TV).

Come talk to me in 5 years.

The good news though, is that with the details released on Monday about the Watch, Samsung has something new to copy nearly exactly to keep them busy while their market share is quietly slipping away each quarter...

 

[Urban Joe]

Its a cruel world for the little guys. If Apple doesn't get sweetheart deals it won't play ball. Thems the breaks.

 

[vrDrew]

I think the heavy crowds ruin the Apple store experience.

I think the crowds change the Apple Store experience. But they do create a sense of excitement and urgency that helps drive sales.

Look at it this way: Is there anything more depressing than a store without any customers? How dreary and disheartening a dying mall is? I think a great deal of retail research shows how negative that sort of feeling can be to customers. Remember the last time you bought something at RadioShack?

Contrast that with the Apple Store experience. You walk in there on a random Tuesday afternoon - a time when most other stores are all but deserted - and still there are people getting their MacBooks tweaked, or trying out the iPads. You feel a real sense of excitement.

 

[MarkCollette]

I like to read this article every once in a while just for fun.

http://www.bloomberg.com/bw/stories/2001-05-20/commentary-sorry-steve-heres-why-apple-stores-wont-work

The critical flaw in that article was the assumption of 10% margins, when Apple already commanded greater margins. Just didn't do their homework.

The other shortsightedness was seeing that all the retailer relationships were failing, and insisting on doubling down on fixing those, instead of the new strategy of taking on retail directly. Most likely Apple already tried that. Even today, months after a new Apple product is out, I always see the old version in other stores, without even the complete range, like probably missing the cellular version of iPads, etc.

And of course they didn't know about the upcoming iPod and iPhone, but can't blame them there.

 

[fuchsdh]

The critical flaw in that article was the assumption of 10% margins, when Apple already commanded greater margins. Just didn't do their homework.

The other shortsightedness was seeing that all the retailer relationships were failing, and insisting on doubling down on fixing those, instead of the new strategy of taking on retail directly. Most likely Apple already tried that. Even today, months after a new Apple product is out, I always see the old version in other stores, without even the complete range, like probably missing the cellular version of iPads, etc.

And of course they didn't know about the upcoming iPod and iPhone, but can't blame them there.

I think it also misses the fact that Apple Stores can coexist with independent stores (probably not chains). There's a Apple Store in Short Pump Mall in Richmond, VA, for instance, but there's a much more convenient Mac-authorized retailer right off of the Virginia Commonwealth University campus. There's also always going to be some markets where Apple won't have a store. Apple didn't destroy retailers, or immediately do so, by creating the Apple Store—most of them were poor health to begin with.

As for the stores themselves, I think what ultimately frustrates me about them is the inability to queue for service like you used to. This is probably an East-Coast thing, but it feels less efficient, especially since you cannot tell how many people are ahead of you, and it means people who are waiting are loitering around and interfering with foot traffic from others who are just browsing, etc.

 

[DynaFXD]

And yet the M$ store is still empty. I usually see the staff just playing Xbox games because there are no customers.

FWIW, I am glad that Microsoft has a brick and mortar presence. I wish more major electronic vendors would as well. Apple serves some of my needs, other stores can fill the rest. Anything that gets us away from the 'showroom' mentality as folks run to online retailers for a pittance in savings once all costs are factored in is a good thing, IMO.

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Its a cruel world for the little guys. If Apple doesn't get sweetheart deals it won't play ball. Thems the breaks.

Actually, the little guys probably encourage this. They know having a heavy anchor in their mall like Apple drives foot traffic to their door. I'd be upset at mall management if they drove Apple out by trying to be 'fair.' Location is everything and being on the same block as an Apple store, or whatever other vendor is hot, is where you want to be. What would suck is having your rent jacked due to Apple moving in nearby because mall operators know this. But that is a better position to be in than seeing your customer base die off due to decaying conditions, IMO.

 

[kazmac]

The mall near me with an Apple store is perpetually packed. That's why if I have to go to an Apple store, I go stupid early at the 5th Avenue Apple store in NYC. No insane crowds or mall traffic and I can browse as long as I like.

Should I need help, I can get it.

 

[rdlink]

You guys realise as long as your not purchasing a high price item you can serve yourself? You use the Apple Store app.

I have a hard time using the app in the store. By the time I get my phone out and pick up the item I want to scan I usually have at least one or two Apple employees interrupting me, asking me if I need help. LOL.

I guess that's part of the stores being "too busy..."

 

[SaraMac95014]

I usually feel pretty strongly that posting in forums is a waste of time as again, most people just like to see their name up on the screen while they spout off nonsense ....


The good news though, is that with the details released on Monday about the Watch, Samsung has something new to copy nearly exactly to keep them busy while their market share is quietly slipping away each quarter...

Fail.
Samsung beat Apple to the watch game, and Apple continues to push out as "new" what Samsung users already have in their hands.

I hope you are enjoying seeing your name and your nonsense on the screen.

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I refuse to go to any Apple store because they are so busy.
I order anything Apple from either the online store or just go to BestBuy.

My last Apple store experiences were awful. Arrogant staff who gave the wrong information.
I bought my last iphone at Target - got better service and a better deal.
I bought my most recent Samsung devices at Target, too. I'll get my new Galaxy S6 there, too. Can't wait for the wireless charging and best camera on a smartphone!

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Proof that Samsung beat Apple to the smartphone product line:

 

[Carlanga]

This is genius, lucky for Apple.

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The iPod kickstarted the growth, which evolved into the iPhone. Without the iPod, the iPhone wouldn't have been possible. Make a stacked chart that combines the iPod and iPhone, and you should see upward growth.

Image

Yes I don't disagree w your statement on it behind the kickstarter, but the orig iPod as the kickstarter didn't make the sales needed for mall growth and expectations until the iPhone came out. I can say the same of the Newton or older ppc macs before Intel if I go by your thinking. We are talking about pure sales results not the start of the apple re-birth here. Intel macs and the iPhone w iOS after it was jb on gen 1 which created a real sales craze caused the real resurgence of apple power.

 

[62tele]

Article was in 2001; apple turned in 2006-7 w Intel chips and the iPhone. I would like to know if sales were less than standard for malls in the 01-05 years.

I purchased a G5 iMac from the Jacksonville Apple Store in early 2005. The stores were jammed then. iPod fueled a lot of it as Apple got a halo effect from the music device that was once also mocked. Intel may have helped some but it was the iPhone and iPad that really blue the lid off, not Intel. Cook said it himself (paraphrasing), "the iPhone is the gateway to our other products."

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My recent experience in the Keystone Fashion Mall (north of Indy) is probably somewhat typical and may even start to contribute to Apple waning a bit.

Basically my wife and I had been walking around for a couple of hours and she wanted to rest her feet, so she sat down near the Apple Store and I went in. The store was so broader that I immediately walked out. It was sad, I love tech stores and just playing with the stuff but I didn't want the hassle of fighters my the crowd.

Now a crowd is good, means loads of sales. But it can also mean frustrated customers if you are wanting o buy something.

Now we also stopped at the Microsoft store, they were moderately busy. More customers then employees, maybe 20 people in a store at least twice as big as the Apple Store. But the important part is, the experience was nice. Not to crowded, didn't get bugged by bored employees, and able to look at stuff without feeling like I'm fighting for my life. Now maybe that's a bad thing but Microsoft store experience was better then my Apple Store experience.

You must be from the Yogi Berra school of marketing. Yogi was purportedly said "no one goes there anymore, it's too crowded".

 

[Moonlight]

[/COLOR]Proof that Samsung beat Apple to the smartphone product line:

Your proof is missing Mrs. Samsung.

 

[TheYellowAudi]

Fail.
Samsung beat Apple to the watch game, and Apple continues to push out as "new" what Samsung users already have in their hands.

You're obviously the failure in this conversation, Ms. Samsung troller. How does Samsung Pay work for you? The answer is that it doesn't, because Samsung isn't done scrambling to put it together yet, while Apple Pay is taking off with unprecedented growth in the mobile wallet sector, despite the fact that Google Wallet has been in place for several years. At LEAST come up with an original, clever name, guys. Jeeze.

Further, let's talk more about your brilliant Galaxy S6. The Galaxy S series phones are the best- way better than the stupid iPhone because you can replace the battery without sending it in for service, and it has the expandable memory slot (way better than Apple's non-expandable memory), and the plastic back is so much better than the dumb iPhone's metal and glass design..... HMMMMM? What now? The S6 is even going to come in the SAME 3 COLORS.......Samsung doesnt know what an original idea is, when it comes to their mobile devices.

Prosecution rests, your honor.
<Judge rules in favor of prosecution >

Can you feel that?!? Huh?? Man, I get tired of being right all the time...

 

[Attonine]

Article was in 2001; apple turned in 2006-7 w Intel chips and the iPhone. I would like to know if sales were less than standard for malls in the 01-05 years.

I'm not an Apple historian, but I think you'll find the turn around was before the intel and iPhone introduction. Londoners can tell you the Regent Street store has been packed since it's opening in 2004. I seem to remember the buzz returning with the introduction of the G4 Macs and the original iMac.

 

[PinkyMacGodess]

And yet the M$ store is still empty. I usually see the staff just playing Xbox games because there are no customers.

But Microsoft has all the determination, and way more cash, than your last stalker ex-gf/bf.

They are positive that if they stay around long enough, they will be liked. You WILL love me...

They have enough cash to waste just trying to 'get it right'. After all, Apple did it. How hard can it be to have lightening strike twice.

True story: At a Microsoft Store in Redmond, I asked the manager where the 'Microsoft Company Store' was, and they had no clue what I was talking about. Heck, every Apple Store employee knows there is a store at 'The Mothership'.

 

[linkgx1]

Article was in 2001; apple turned in 2006-7 w Intel chips and the iPhone. I would like to know if sales were less than standard for malls in the 01-05 years.

I was going to say this. I have a feeling that Apple stores were loss-leaders until the iPhone came out....then it exploded. The Apple Stores where I lived didn't have a whole bunch of traffic until the iPhone boom.

 

[dwman]

And yet the M$ store is still empty. I usually see the staff just playing Xbox games because there are no customers.

Absolutely. Was in SD over the holiday season helping my in-laws buy a Mac for the first time at Fashion Valley Mall. The mall was jammed with shoppers and we passed the MS store with only a trickle of customers. As soon as we got to the Apple store, it was madness. My in-laws have always been life long PC users, but the difference in the traffic of the two stores (and of course convincing them a Mac was better) showed them that a Mac was the way to go. I almost felt bad for the MS store employees as we walked by them after buying a new iMac.

 

[linkgx1]

We've long since passed the days of M-dollar sign ...

Wouldn't count them out yet. They've still gotten a lot of tricks up their sleeves

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Absolutely. Was in SD over the holiday season helping my in-laws buy a Mac for the first time at Fashion Valley Mall. The mall was jammed with shoppers and we passed the MS store with only a trickle of customers. As soon as we got to the Apple store, it was madness. My in-laws have always been life long PC users, but the difference in the traffic of the two stores (and of course convincing them a Mac was better) showed them that a Mac was the way to go. I almost felt bad for the MS store employees as we walked by them after buying a new iMac.

The problem is that Microsoft is software....in cyberspace. It's the same as if Oracle came out with a store.

 

[agw35th]

Apple Stores in 2004

I think the history is a little different from some of the above speculations.

"Apple's retail stores will generate $1.2 billion in revenues during the fiscal 2004, and will post its first full year of profitable operation, according to Sr. vice-president for Retail Ron Johnson, speaking at a design conference in Providence (RI). Johnson also revealed that Apple's stores were the fastest retail operation to ever reach $1 billion in annual revenues, taking just three years to reach the mark, beating out the previous record-holder, clothing retailer The Gap."

from http://www.ifoapplestore.com/stores/risd_johnson.html

 

[Gasu E.]

Ugh. This is disheartening. If this was any other retailer, people would be decrying the parasitic effects of these kind of sweetheart deals and the impacts they have on small businesses. Because it's Apple, they get a high five? Pay your taxes and your share of the rent and then start talking to us about high margins and increased costs in the international market.

Not really. Some stores draw people to the mall; other stores benefit from the additional traffic. The former bring value to the mall, the latter stores benefit. Why wouldn't a mall owner want to recruit an anchor tenant that brings this kind of value to the other tenants and the mall? It's simple economics! It's not parasitic, it's beneficial.

 

[MarkCollette]

As for the stores themselves, I think what ultimately frustrates me about them is the inability to queue for service like you used to. This is probably an East-Coast thing, but it feels less efficient, especially since you cannot tell how many people are ahead of you, and it means people who are waiting are loitering around and interfering with foot traffic from others who are just browsing, etc.

Yeah there's some pain from the Apple stores being so full, but it's also good marketing to younger consumers, that it's the place to be.

 

[noodlemanc]

Ugh. This is disheartening. If this was any other retailer, people would be decrying the parasitic effects of these kind of sweetheart deals and the impacts they have on small businesses. Because it's Apple, they get a high five? Pay your taxes and your share of the rent and then start talking to us about high margins and increased costs in the international market.

The effects on small businesses? Like increasing foot traffic to their stores? Why should apple bring 10% more customers into the mall than anyone else but have to pay the same rent. Then it would be other stores that would be freeloading off Apple's success.