Apple to Shift Retail Strategy to Larger, More Iconic Stores

[callmemike20]

Many Macy's stores have marble floors and wood paneling. Many bars have these big areas of floor where people just dance around and don't drink at all for hours at a time. Shopping malls have lounge areas and grand entrances and extra wide corridors.

I think there is more to retail than just maximizing dollars per square foot. Otherwise all stores would just be windowless little gray rooms with little black & white paper signs on the outside that say "stuff sold here."

(Come to think of it, that pretty much is what stores were a couple hundred years ago. I guess the study of psychology has changed things.)

Exactly. Sales per square foot is old school. Now its all about the experience.

Take Wal-Mart for example. Robert Kahn helped Wal-Mart increase their revenue and profit by simply changing the environment. Wal-Mart added thousands of square feet to each store, those thousands of feet simply being open space in the aisles, and they saw an increase in satisfaction by the customer.

And if you think the WalMart greeter is pointless, think again. The Wal-Mart greeter was actually developed strategically to slow you down as you walk into the store. Most people miss the first 30 feet of walking into the store because they are simply moving too fast when they enter. The Wal-Mart greeter is there to slow you down and thus allowing for that 30 feet to be used to sell you stuff.

It truly is all about the customer experience. It's not just about selling stuff anymore, its about making a life long relationship with the customer. You have to make them remember you and come back to you later.

 

[mscabot]

Really

because you spending money and resources on unnecessary parts of the store. I watched a national music retailer go out of business, so it not that I just think so. I'm not trying to say it will for sure happen, as Apple is it's largest vendor so already you removed something that could have added to the issue.

Big stores with lots of useless space are stupid. I think that store looks horrible and unfinished, and the acoustics have to be crazy.

I don't know if you have looked around lately but music retailers are dropping like flies regardless of the size of the store. It's this little thing called downloading. You are saying it will fail because you say so, you have nothing to back up your point.

 

[yaddacubed]

Board member Algore must be apoplectic after seeing the carbon footprint required to heat the store's volume.

 

[jayducharme]

I finally pinpointed what the new Apple store reminds me of -- the interior of the Moonbase Alpha set in the old Space:1999 series. There are lots of grays and silvers, with lighting coming from the walls.

 

[Rocketman]

Larger more iconic right now would be a great real estate PURCHASE strategy in this environment, but if LEASING, they are being more flamboyant at premium cost than anybody at a time of recession and budget gutting everywhere except governments where it is needed most.

The fact the stores "pencil" at 5x their peers "justifies it" but is it really just a marginal waste of cash on an "extreme statement on retail first impression"?

I suppose they could add a mezzanine floor to that West Side store later if they wanted to be more space efficient, but on LEASE?

They PURCHASED a new campus, a telco center, a new cloud farm, and now they LEASE retail space? Probably long term leases no less. Gotta question that one, especially in this market.

Rocketman

 

[cmaier]

Larger more iconic right now would be a great real estate PURCHASE strategy in this environment, but if LEASING, they are being more flamboyant at premium cost than anybody at a time of recession and budget gutting everywhere except governments where it is needed most.

The fact the stores "pencil" at 5x their peers "justifies it" but is it really just a marginal waste of cash on an "extreme statement on retail first impression"?

I suppose they could add a mezzanine floor to that West Side store later if they wanted to be more space efficient, but on LEASE?

They PURCHASED a new campus, a telco center, a new cloud farm, and now they LEASE retail space? Probably long term leases no less. Gotta question that one, especially in this market.

Rocketman

A 99-year lease at today's rent makes a lot of sense.

 

[NT1440]

Board member Algore must be apoplectic after seeing the carbon footprint required to heat the store's volume.

I keep seeing you guys go off on this. The store took 11 months to go from a victorias secret to a wide open apple store. Obviously something else was going on during that time, do you really think Apple hasn't thought of any of these things? Do you guys understand what goes into designing a building?Heating/ cooling efficiency is one of the biggest costs to keep a place running, and every design is considered in these terms.

Its not simply a case of, "Lets throw some glass up and put in some wood tables", a ******** of thought goes into these issues with new structures.

 

[MorphingDragon]

Apple stores aren't already Iconic?

What happened to the large glass cubes and the largest glass panels in the Southern Hemisphere?

 

[DCJ001]

Wirelessly posted (Mozilla/5.0 (iPhone; U; CPU iPhone OS 3_1_2 like Mac OS X; en-us) AppleWebKit/528.18 (KHTML, like Gecko) Version/4.0 Mobile/7D11 Safari/528.16)

Iconic?

Okay, but how about one in my home town?

I would appreciate it if they would build one in my town too. According to IFOAppleStore, they got permits some four years ago. I’ll even take one with only two tables wide.

I have mixed feelings about this store. It’s almost like it should have had three levels. That’s an awful lot of ceiling space.

By the way, the “dots” that are at the kid’s tables cost a small fortune. I looked into them a few years ago.

I believe that they have Apple Stores in your towns:

Your Apple Stores

Store Locator

 

[cmaier]

Apple stores aren't already Iconic?

What happened to the large glass cubes and the largest glass panels in the Southern Hemisphere?

Out here in Silicon Valley there are some Apple stores that are tiny. Oakridge Mall and Stanford Mall come to mind. Hardly iconic.

 

[DMann]

Board member Algore must be apoplectic after seeing the carbon footprint required to heat the store's volume.

Yet large greenhouses have remained energy efficient all around the globe - go figure.

 

[distortedloop]

I'm almost surprised there's not a floor to ceiling Steve Jobs portrait, watching over all....

That's in the back, in the employee brainwashing center.

 

[cmaier]

Yet large greenhouses have remained energy efficient all around the globe - go figure.

Plus, NY still has centrally generated steam heating. Fun (especially when the steam pipes burst), AND efficient!

 

[distortedloop]

Larger more iconic right now would be a great real estate PURCHASE strategy in this environment, but if LEASING, they are being more flamboyant at premium cost than anybody at a time of recession and budget gutting everywhere except governments where it is needed most.

The fact the stores "pencil" at 5x their peers "justifies it" but is it really just a marginal waste of cash on an "extreme statement on retail first impression"?

I suppose they could add a mezzanine floor to that West Side store later if they wanted to be more space efficient, but on LEASE?

They PURCHASED a new campus, a telco center, a new cloud farm, and now they LEASE retail space? Probably long term leases no less. Gotta question that one, especially in this market.

Rocketman

The market where Apple's turned record profits quarter after quarter, even in the middle of a deep recession? The market where real-estate prices have plummeted? The market where contractors are charging half of what they used to just to get work?

Yeah, bad time for a cash-rich, business-is-booming company to make some capital investments.

 

[LagunaSol]

In related news, Microsoft just announced that they're shifting their retail strategy to larger, more iconic stores, and, um, you know, whatever else Apple is doing.

 

[Eidorian]

They really need to revamp the Keystone Store.

 

[SAIRUS]

I think the problem with the current stores is space, but it feels too loft like. I understand Apple is going for that hip image, but when I brought the mom over for an iPhone lesson, they were crowded around a table with one employee trying to scream over everyone in the store.

Would it be too hard to maybe compartmentalize some things? Getting bigger is what PCs do, Macs are about being optimized and efficient.

 

[akadmon]

OK, floor space is one thing, but how do 40 foot ceilings benefit me as a consumer? Somebody is paying for all this wasted vertical space. Guess what, it's you!

Personally, I think having smaller crowded stores is better in terms of generating revenue than having larger, empty looking stores. A crowded store has the "where it's at" feel to it that attracts the curious.

Bad move, Apple.

 

[NT1440]

OK, floor space is one thing, but how do 40 foot ceilings benefit me as a consumer? Somebody is paying for all this wasted vertical space. Guess what, it's you!

Personally, I think having smaller crowded stores is better in terms of generating revenue than having larger, empty looking stores. A crowded store has the "where it's at" feel to it that attracts the curious.

Bad move, Apple.

How exactly are we paying for it?

And if you think a store on the macy's day parade route isn't going to be PACKED in the coming months, well, I just don't know what reality you live in...

 

[DMann]

Plus, NY still has centrally generated steam heating. Fun (especially when the steam pipes burst), AND efficient!

Hence, the greenhouse structure designed to actually reduce the need for excessive heating.

I suppose they could add a mezzanine floor to that West Side store later if they wanted to be more space efficient, but on LEASE?

They PURCHASED a new campus, a telco center, a new cloud farm, and now they LEASE retail space? Probably long term leases no less. Gotta question that one, especially in this market.

Rocketman

Assuming that the property was even available for sale in the first place, the monthly maintenance charges and costs of owning the property in NYC would defeat

any benefits year to year over leasing. Besides, the lease was likely negotiated at a low enough rate to make a long-term lease that much more favorable.

In related news, Microsoft just announced that they're shifting their retail strategy to larger, more iconic stores, and, um, you know, whatever else Apple is doing.

+1

Although, this would be inconsistent with the typical 5+ year lag of their catch-up endeavors.

 

[cmaier]

OK, floor space is one thing, but how do 40 foot ceilings benefit me as a consumer? Somebody is paying for all this wasted vertical space. Guess what, it's you!

Personally, I think having smaller crowded stores is better in terms of generating revenue than having larger, empty looking stores. A crowded store has the "where it's at" feel to it that attracts the curious.

Bad move, Apple.

Huh? It's not like they pay rent per cubic foot or something.

 

[William Gates]

From the looks of the store, Gizmodo's comments on it being a temple to Apple's products, and the reaction of some of you to it, it is almost as if Howard Roark was the architect.

 

[harry*333]

if they somehow syncronized all the sleep lights on the macbooks/pros/airs to brighten and dim at the same time during nighttime it would look tight. just imagine the entire glass box brightening and dimming

 

[alent1234]

Larger more iconic right now would be a great real estate PURCHASE strategy in this environment, but if LEASING, they are being more flamboyant at premium cost than anybody at a time of recession and budget gutting everywhere except governments where it is needed most.

The fact the stores "pencil" at 5x their peers "justifies it" but is it really just a marginal waste of cash on an "extreme statement on retail first impression"?

I suppose they could add a mezzanine floor to that West Side store later if they wanted to be more space efficient, but on LEASE?

They PURCHASED a new campus, a telco center, a new cloud farm, and now they LEASE retail space? Probably long term leases no less. Gotta question that one, especially in this market.

Rocketman

finance 101 classes say to lease retail space. reason is you can negotiate a cheap cost to break the lease compared to trying to sell a problem building.

Whole Foods and Jet Blue both had a lot of problems with new construction in NYC due to pollution from decades ago. with WF it was so bad they abandoned that site.

 

[Rocketman]

if they somehow syncronized all the sleep lights on the macbooks/pros/airs to brighten and dim at the same time during nighttime it would look tight. just imagine the entire glass box brightening and dimming

Don't tell Steve. He'll do it!