Enchanted! Apple Stores Emerge as the “Nordstrom of Technology”

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Apple’s revenue has grown 42% in the quarter ending Sept 07, compared to the same quarter Sept 06. The Apple Store in NYC at 2 AM was filled with tourists straight from the airport, and last minute shoppers with their families in tow. It was a PARTY that required no invitations and staffed by smart happy people. Jupiter Research’s VP for Research Michael Gartenberg called them the “Nordstrom of technology”

You can read all about it on the first Business page on the New York Times.

“Inside Apples Stores, a Certain Aura Enchants the Faithful”

Because it requires a subscription, I’ve highlighted some of the points made there related to Customer Experience:

The contrast of Apple Stores with a 42% sales increase, compared to what is happening to other formerly “recession-proof” brands is showing that CEM – Customer Experience Management may in fact be emerging as a “survival” issue for retailers.

“a sad flourish, not a strong one” as Kim Caughey a Pittsburgh analyst speaking about retail Christmas sales posting a 2.8 % increase when the economists estimated 4-5% sales increase over 2006.



What are some of the things going on in Apple Stores that are notable?

“Throughout the night, cheerful sales staff stayed busy”

“late one night … parents pushed strollers…tourists straight off the plane mingled with nocturnal New Yorkers”

“clicking through iPod playlist, cruising the Internet … touch-padding their way around iPhones”

“the party inside that store…halo effect (of the iPhone and Pod)”

“many of its stores feel like gathering places”

“brght lights and bright acoustics create a buzz that makes customers feel more like they are at an event than a retail store”

“the secret formula may be the personal attention paid to customers by sales staff”

“smiling employees roam the floos, carrying hand-held terminals for instant credit card swiping”

“technicians work… administering to customers ailing iPods, MacBooks and iPhones”

“personal trainers give one-on-one instruction and lead workshops”

“personal shoppers are available by appointment”

“concierge teams are stationed throughout the store”

“what (customers) really appreciate the most is that undivided personal attention”

“the result is customers … paying premium prices… making (the New York City 14th St store) “the most personal store ever created”.

“encourage lingering with dozens of fully functioning computers, iPods and iPhones for visitors to try – for hours on end.”

“The people who work there are cool and knowledgeable”

“They have the answers you want and can sell you what you need. Customers appreciate that.”



“They’ll email you a receipt… makes you feel like you’re in a store just a little bit further ahead of everyone else.”

“these stores are going to become iconic places that people go to see when they come to New York”

While its not clear what the future “Nordstroms” of retailing is going to look like, here’s a vision of Customer Experience that is hitting the mark for Apple Inc. Read the linked NY Times article to judge for yourself.

Happy Holidays everyone.

Please accept my very best wishes for your success in Enchanting your customers in 2008!

Mei Lin

7 COMMENTS

  1. Mei Lin

    I have been to the odd Apple store or two in my days. Not to buy anything mind, just to look at the in-store experience. I particularly like the no-pressure sales environment. But it makes you think?

    What it be so great without Apple’s iconic technology as a branded backdrop?

    I don’t think so. I can’t imagine going to a similar Sony experience, or even Nokia experience. Even though their technology is probably superior to Apple’s.

    Would it be so great if everyone was offering similar experiential retailer therapy?

    I don’t think so either. Apple’s stores are so remarkable precisely because they are so remarkable. Fortunately for Apple, no-one is offering vaguely comparable retail experiences, certainly not the awful US big-box retailers.

    I am not an Apple fan, but you have to give it to them, they do know something about designing superior experiences.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

  2. Graham

    Great point – absolutely spot on!

    You are insightfully making the point that it is not appropriate that retailers can just copy Apple’s vision of CEM.

    What works for Apple Inc. will not work for Orange, the European Telecom, or Home Depot or Nokia or Sony.

    What Apple has created is a new measure of retail excitement.

    That can inspire CEM designers and marketers to greater heights – and if we in the US are going to get out of the looming recession, we are going to need those CEM experts to emerge from the woodwork, point to Apple’s success in CEM and become the innovative leaders in ACTUALLY caring and implementing what Customers can be excited about and appreciate.

    The bottom line is: If you understand what customers want, then

    IT’S TIME TO SPEAK UP!

    You’ll be surprised about how many will agree with you and support doing what it takes to build customer relationships.

    Can you help us with your views on what are the right set of Customer Excitement Metrics so that the finance people can see what pays off in increasing Customer Excitement.

    Let’s have CEM projects busting out all over the place!

    Then our Shareholders and Customers will be equally Enchanted!

    Mei Lin Fung
    Blog: Professionals Earn Customer Trust

  3. Hi Mei Lin

    I think I am going to disappoint you.

    In spite of Apple’s solid figures, it is still a relative minnow in the high-tech business world. Its revenue is not very large; Microsoft is the acknowledged 900lb Gorilla. Its market cap is not the biggest; Microsoft is again, a long way in-front. Its music products are not the market leaders; mobile handset makers are by far the world’s leading music device makers. Its customer service is lousy. And it is one of the most environmentally dirty high-tech companies. Sure, Apple is still cool. But that is no longer enough.

    Apple’s stores are great places to hangout and try cool stuff. But it doesn’t make much of a difference to the bigger picture if they are a relative minnow and key parts of their business practices look increasingly flawed.

    Perhaps it is time for Apple to reinvent its entire user experience, not just the upstream design, marketing and sales bits. Now that would be worth writing about.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Gunning Fog Index: 8

  4. Graham, the world is full of only a few “900lb” gorillas, and lots of “minnows.” So, are we to bow down before the market dominating companies, as if that’s the only measure of greatness?

    Every company has issues, but I can think of few better examples than Apple of a company that has grown its business and stock price over the past few years, and has given the market innovative products like the iPod and iPhone, market leading services like iTunes, and an in-store experience that for sure beats the typical experience buying Microsoft technology.

    And Apple has been gaining PC market share, which is truly amazing given the stranglehold Microsoft has on the desktop.

    Let’s hear it for the minnows! They keep the gorillas honest and usually are the source of real innovation.

    Bob Thompson, CustomerThink Corp.
    Blog: Unconventional Wisdom

  5. Bob

    As you say, the world is full of a few very large companies and a very large number of tiny companies, (in a power-law distribution). Apple lies somewhere in the middle.

    Apple has staged a great recovery over the past through years. This has been mostly achieved through its cool technology, even though the technology isn’t always the best, or perhaps in the case of the iPhone, even good enough.

    But beyond its cool home electronics products, where is the innovation? Where is the service innovation that drives the end-to-end customer experience, like Disney with its theme parks? Where is the business model innovation that drives industry-changing returns, like Toyota with TPS? Where is the innovation through platform partners, like NTTDoCoMo with iMode? Where is the innovation through lead customers, like Dell with IdeaStorm?

    Apple is a great recovery through product innovation case study. But it is time we looked beyond this thin veneer to companies innovating in less obvious, but perhaps more sustainable ways.

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Gunning Fog Index: 13

  6. I agree that Apple has done an extraordinary job of creating an excellent customer experience in their retail stores. Unfortunately, amid all the internal high-fiving over their execution, someone forgot to ask about where the customer-experience rubber meets the road: after sales support.

    We purchased a Bose audio dock from our local Apple store in Tysons Corner, Virginia. After three months, it stopped working. Apple “Tier 1 Customer Support” told me that Apple didn’t support that product, and that I would need to call Bose.

    While I don’t write code for a living, I know enough that it’s technically possible for Apple’s vaunted marketers to develop a “seamless customer interface” that would at least make it appear that Apple could manage the reverse logistics to replace my failed Bose unit, rather than sending me into a customer service purgatory that is fully outside of Apple’s control (is this what they really want, anyway?)

    Even in a high tech world in which sales receipts can now be sent by email, I think it’s unethical for a company to accept revenue at the point of sale, and then deny responsibility for supporting the product they sold. It’s amazing that Apple handled the problem this way. I expected better.

    In this sense, the Nordstrom comparison is a stretch. Nordstrom famously supports products that it didn’t even sell!

  7. Andrew

    Your Apple service failure, if not outright ‘service disdain’ story reminds me of Bose’s excellent customer service.

    We have a number of Bose products at home. One of them is a set of in-ear headphones that my eldest son uses with his first generation iPod. Just before Christmas, he managed to lose one of the in-ear plugs. We went to the retailer where we bought the headphones, but they were not able to help us and recommended we ring Bose direct. We did and talked to a very helpful lady who asked us if we still had the original packing, which contains three different sizes of plugs as standard. Unfortunately, we did not. The lady said she would send us out a replacement pair the same day. The following day, a courier rang at our doorbell with the replacement ear plugs. The bill for the ear plugs: Zero, that’s right Zero. Needless to say, not only are we raving fans of Bose’ superior equipment, but also of their vastly superior customer service too.

    Cool products are not enough. Customer service has to work too. Is your customer service up to it? And what about the rest of your customer experience?

    Graham Hill
    Independent CRM Consultant
    Interim CRM Manager

    Gunning Fog Index: 9

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