17 Lessons To Be Learned From Apple

by Rich Gordon AKA Retail Rich

(the Worlds Highest Volume (Per Square Foot) Retailer)

In Part I of this article I carried on about many of the things Apple has done in spite of its “doomsdayers”.

If We Still Have Some Doubters Here. . . Read On!

Well since they are the only computer manufacturer running double digit sales increases, they dominate the phone industry with the iPhone, they dominate the music industry with iPod and iTunes, and they dominate the computer pad business with the iPad, I am sincerely hoping the skeptics who are reading this are not going to try and tell me that their retail success is just a coincidence too.

Here’s the Real Proof In The Pudding!

It All Shows Up In Sales Per Square Foot

While it is hard to generalize about all retailers. Big box stores traditionally may generate $250 to $350 in sales per square foot per year, while a well run smaller store of approx. 2000 square feet may generate sales as high as $700 per square foot per year. Before Apples stores, Tiffany jewelers had the highest sales per square foot of any retailer in the country (currently $3070). A recent study from RetailSails.com examined the top 20 U.S. retail chains, said that Apple generated global sales of over $14 billion in its stores during the past four quarters. At the time of their study, Apple had 327 stores with an average size of nearly 7,900 square feet. Thus, the research firm calculated that Apple sales per square foot are $5,626. Apple is now dwarfing the sales per square foot figure of all other retailers as well, including outfits like Coach at $1,776 and Best Buy at $880.00. But this was all before they made the latest changes in their stores. I guess they weren’t satisfied. . . Is this company driven or what?

Now Apple will be shifting the focus of it’s in-store classes, it has offered for years, in order to simplify and offer more tips and tricks for the iPad and iPhone, especially since these are closer to the devices of the future. Yes seminars on movie editing and digital photography will still be offered. The big changes inside the store there will now be iPad sales stations, or as Apple calls them, “smart signs” —You will be able to tap a button for help, and the picture of an available sales rep shows up on the iPad with a promise that he or she will be right over to assist you. Apple has also been quietly testing “personal setup” for customers in all its stores. Purchasers of Apples computers, the iPhone, iPod, iPad or Apple TV — could have the sales staff add their e-mail settings, set up an iTunes account and download favorite apps for them with very little effort. Apple is setting aside a dedicated, marked area in each store for this service.

More Confirmation From Other Retailers

Nordstrom is taking a page from the Apple retail playbook and is rolling out a series of iPad touch based systems for their retail stores. While Nordstrom wrote the book on customer service and had a reputation for service, decades before Apple existed, they seem to want to stay at the cutting edge of customer service as well. As disclosed in an earlier article, other retailers are discovering more great ways to make use of this gorgeous piece of technology including Sears, K-Mart, J. C. Penney, Puma, Gap Inc., Amazon.com Inc., eBay Inc., Gilt Groupe, The Golf Warehouse, QVC, HSN Inc., Toys ‘R’ Us Inc., and Wine.com have jumped on board. Meanwhile, Apple has not been trying to emulate anyone else. Their attitude has simply been, “Why copy when you can create?”

Last but not least, while I haven’t mentioned the heroic retail customer service stories that Apple is famous for, it’s funny you don’t seem to hear the same stories about Microsoft, Gateway, Dell, HP, or Sony. Maybe some of these stories have become more legend in some cases than fact (although I can tell you some pretty impressive personal stories myself) there really is an important accuracy and soul about these stories. Apple has taken the experience of buying something expensive and complicated to a new very high standard in retailing. And in the end, that leads to surpassing customer expectations and that leads to sky rocketing sales.

At the very least one could certainly make a good argument that Apples retail stores have been a “core” reason in contributing to Apple’s success. Regardless Apple has succeeded because they give a lot of attention to a lot of details all aimed at more than satisfying the customer.  OK. . . I’m finally getting to the:

17 Retail Lessons To Be Learned From Apple.

1.      Have a passion for serving your customers, and put the customer at the center of what you do.

2.      Start with the philosophy that you are there first to solve problems for customers, NOT to sell them lots of stuff.

3.      Sell solutions or benefits. Sell what your products can do for your customer, rather than features.

4.       Sell great products and provide great service, and don’t worry about being the low price seller.

5.      Work to simplify the purchase process. Do everything you can to speed up the purchase process and deemphasize it as an event. The purchase becomes just another natural and logical step, not a decision.

6.      Continually look for ways to improve your customer service. Ask customers and ask your employees what customers would like to see.

7.      Understand the goal is not customer satisfaction, but customer loyalty. Just satisfying customers is the lowest form of customer loyalty. Satisfaction won’t cause customers to choose you over another competitor. Loyalty is when customers choose you first and foremost.

8.      Many of Apples legends of customer advocates came as a result of a customer complaint or problem. How you take care of it is what generates great word of mouth!

9.      Work to understand all of your customers’ needs—some of which they may not even realize they have,” (one training manual says).

10.  Consider any technology that involves better serving the customer. Customer loyalty software, more sophisticated POS systems, iPads where they may help, mobile marketing, etc.

11.  Stand behind your products and/or service. Getting new customers is more costly than keeping them. Offer the best warranty and remember that policies were made to be broken.

12.  What can you do to make the buying experience fun and/or memorable? What can you do to educate? What can you do entertain? What can you do to put a smile on the customers face?

13.  Simplify, Simplify, Simplify   Steve Jobs ordered designers to lose all the buttons on early prototypes of the iPod.  Apple took that philosophy of constantly simplifying its products, into retailing as well.  The stores are laid out simply with clean lines and clean solid tables and wide aisles (even before they were filled with customers).  The variety of product is minimal and the focus for customers is clear.

14.  Allow customers to interact with products as much as possible.  If you believe in your products and they are generally hidden away in boxes, get them out and let customers see, feel, touch and play whenever possible.

15.  Be disciplined in all areas. Apple’s training manual indicates that in six months time, if employees are 6 minutes late, three times or more, they can be dismissed. Set some high standards and live with them.

16.  Work to control the customer experience to their benefit. (Apple has been meticulous in this area.) For instance, in their training manual, Apple store technicians are even told specifically what to say to the customer using the right choice words when it comes to listening and understanding.

17.  Give more thought to your guiding principals as a business rather than policies. Again, policies were made to be broken. Enforcing policies can get you into trouble with customers and even good employees. Principals are what your business believes and stands for. Live with your principals over policies.

Note: Apple does not provide sales quotas or commissions for their people.

“I give [Apple] two years before they’re turning out the lights on a very painful and expensive mistake.”

A 2001 prediction by David Goldstein, president of Channel Marketing, about Apple’s then newly launched retail stores

17 Retail Lessons To Be Learned From Apple (Part I of II)

by Rich Gordon AKA Retail Rich

(the Worlds Highest Volume Per Square Foot Retailer)

Years ago when we shopped for a computer, our choice was to go to OfficeMax, Best Buy, Circuit City, and stores of that ilk, or Gateway, Dell and Radio Shack. Then there was the Costco’s, Sam’s Club and all the other independent technology stores. They all did pretty much the same thing. You learned from a sign of features or you had a salesperson read to you off the sign of features. They gathered your purchase together and checked you out at the register and later wished you luck. Before you left, they may have given you an 800 number you could call for technical support, if you were lucky. Then you got home and began loading up all the software and registering everything on line. Apple computer was hardly a thought. They were that strange company that made good-looking things that were supposedly expensive. They were also the ones that had the following of some real gung-ho enthusiasts that many thought were bordering on being some sort of cult. Remember those days. Real computer geeks didn’t give Apple a second thought. After all you couldn’t add boards, and plug in or build your own tower. What was wrong with this company?

Apple couldn’t get any respect or shelf space in many retail chains, and when they did, the displays were a shambles in the stores as a result of being neglected. The people that sold them gave them little respect and didn’t really understand what Apple was about or how to sell them. It was as if Apple had been marked with a large “A” painted across their products to brand them as less than acceptable. The attitude towards Apple reminded me of how adulterers were treated with a large “A” marked on them by the Puritans. Remember, The Scarlet Letter, with Demi Moore?

Meanwhile everyone that could stick some circuit boards into a tower were selling virtually the same product. They all tried to add their own little gimmicks or special graphics boards to set themselves apart. Then the usual Microsoft software of the day was downloaded into them and they worked (some more smoothly than others). All came with the “fatal error” message from time to time. There was nothing special about any of them other than they continued to get faster as chip technology improved. Along with the advances came tens of thousands of known software bugs which required constant patches and updates. . .and that was before you dealt with the security and virus issues.

There’s More Than Meets The Eye

Apple has never been satisfied with their product or their service. They are constantly trying to raise the bar in the way their products work and interact with their customers. I often wonder where the industry would actually be today if Apple hadn’t been pushing the envelope. Once they opened their own stores, they took the same approach with their retail stores. And once again, those skeptics who don’t get Apple, predicted the failure of their stores within about a year or two. One more interesting aspect of all this, is the timing and growth of Apple’s retail stores. It seems to have coincided with the general death of chains selling computers such as Gateway, CompUSA, Circuit City, and many others during this same time period. Meanwhile, Apple quietly continued to work to make the technology-buying experience something that has been among the best consumer retail experiences around in any market.

Those people who don’t get Apple are now saying the same things about their stores as they did their products i.e. “You’re paying for gimmicks and looks.” But there’s a lot more to the Apple retail experience than clean modern stores, bright lights and premiere retail locations with great glass staircases. If you don’t believe me, go build a store with a supersized glass walls, large heavy wood tables, and a great glass staircase and see if your sales become even a reasonable fraction of Apple’s.

One Important Lesson

Here’s the big difference right here: “Apple understands that having satisfied customers isn’t good enough anymore. If you really want a booming business, you have to create raving fans.” If you are a retailer, you need to memorize that statement and if you don’t get Apple at all as an outsider, you must not understand that Apple lives and practices that philosophy and whoever you’re buying your computers and gadgets from probably doesn’t get it. That’s the dirty little secret!

Consumers don’t care about electronic gadgetry for very long. You can only get so far on that. Ask Sony! They care what the products can do for them. Consumers also care a great deal about the experience they have to go through in order to purchase those products they need and want. Whether it’s a computer, a phone, a car or a boat, a lot of it comes down to the buying experience! You can buy Teddy bears anywhere? Why did Build-A-Bear become such a sensation? It’s the experience and the emotions! People feel good about what they do and what they buy at Apple. Apple makes it fun, and they remove the pressure and they make products that do what their supposed to do. Too often, the larger more substantial purchases, seem to come along with a clumsy and lengthy sales transaction. Anyone buy a car, some furniture or a boat lately?

Should Apple Hard Core Fans Be Called Apple Cores?

Just what are we talking about when we mention Apple hardcore fans? According to a new BBC documentary, tests on Apple hardcore customer advocates has found brain activity virtually the same as in religious worshipers. Using an MRI (magnetic resonance imaging) test, neuroscientists found when hardcore Apple fans are shown images of the company’s products, the same portions of their brain lights up in the same way as a person of faith does when shown religious imagery. The BBC in London reported that they witnessed something more like an evangelical prayer meeting than a chance to buy a phone or a laptop.” The documentary illustrated that a number of people at a recent store opening in London England had come from the U.S. and other locations around the world to wait in line for the doors to open. When the store finally opened, these fans found virtually the same things they could find at the Apple location that was closest to their homes. This actually reminds me of those who follow rock groups like The Rolling Stones, U2 and others around the country and the world, to hear the same music over and over again that they could have seen and heard in their own cities.

A Different Retail Experience

Have you ever been to one of these stores where the definition of customer service is, “we’ll try to ring you up once your ready to buy and if you just want to look we’ll hover over you like a vulture until we finally get a chance to answer a question and then we’ll read off the sign or information stickers about the product for you as if that is our purpose. Once you really do want help, it may take you 10 minutes or more to get someone’s attention. And then once we take your order, we’ll probably need to call a manager to come over and help the salesperson with the point-of-sale system.  Apple is once again changing the way things are done, even at the retail store level.

While they’ve been doing it for years, they are still “practicing what they preach” once again by offering, clean lines, a simple uncluttered environment, reliability, service, ease of use and listening to their customers so that they can run their retail business the same way they build their devices. They are also using technology and software to deliver the best customer experience possible. One innovation was deemphasizing the purchase itself, by eliminating the check-out line and the POS terminal. Their system was called “EasyPay” and it let salespeople wander the floor with wireless credit-card readers and ask, “Would you like to pay for that?” Even that system is already being improved and replaced.

The Genius Bar, was another innovation. It is staffed by what Apple calls, “Creatives” who offer one-on-one training on everything from Apple’s retail experience is one major reason why Apple has become “the force” in the industry, and that experience explains Apple’s success at attracting new customers who in the past would never have considered the Apple brand.

Apple’s philosophy with its stores, seems to be to let customer explore and have fun and be self-sufficient on their own until and unless they need help, and then they’re promptly available for you in a multitude of ways to help and support you before, during and after the purchase.

Coming in Part II  (All 17 Lessons from Apple)

©2011 Retail Redefined and retailrichez.com

More Brief Morsels of Retail Help

Display Interesting Props or Not-for-Sale Merchandise

Contribute to your store’s atmosphere by taking a lesson from Anthropologie. They may go to flea markets, antique stores or out-of-the-way small towns looking for something different. Display some interesting and larger props that are loosely tied to your theme.  You can use them as props for a while or maybe even sell them as Anthropologie does.  Add some more valuable or collectible pieces that you never intend to sell, to add to the aura of a product group.  Doing this, not only enhances the product line, but your store as well.  This strategy helps build a very distinctive feel, as well as making the store feel special. Last but not least, it all comes down to making customers feel they have found something unique and different from the rest of the “me-too” stores.

Retail Customers Today Have Zero Tolerance For The Ordinary

For more retail help take a trip around your store and go on an “ordinary” hunt. Look for mediocre and ordinary displays and ways you’ve been doing things in your store and throw out some rules and old habits.  Ask your people to join you.  I have every confidence you’ll hit pay dirt.  Now what can you do to rid yourself of this disease?  Take this trip at least once a week, but only if you plan on treating the problem.  In a year, you’ll have a drastically different store.

Look into gift cards if you haven’t already.

About 20% of gift cards are never redeemed by the recipients.  The good news–If the card came from you, it’s money in your pocket. More good news–When gift cards are redeemed, more money is generally spent on that visit to your business and you get a whole new shot at a new or repeat customer.  In fact 61% of gift card-holder’s spend more than the amount credited on the gift card.

Just For Fun

Why does a slight tax increase cost you $200.00, and a substantial tax cut saves you $30.00?

In the 60’s, people took acid to make the world weird.  Now the world is weird and people take Prozac to make it normal.

Plan on Doing Advertising of Any Kind?

I don’t care whether it’s on Facebook, an-email or the yellow pages, you need to ensure you include a few basics in your ads.  By the way, does anyone use the yellow pages anymore?

Your ad must make it clear what they will get.

Your ad must let the customer know why this deal is good.  Wouldn’t you want to know?

Your ad must tell them what to do next.  Customers need to be led a bit, don’t you think?

Your customers need a deadline.  This creates a sense of urgency?  You do want them to act now don’t you.

Be Creative & Display Something Drastically Different

Take a look at some of your merchandise that needs a shake-up and let your imagination go.  Does it always have to be merchandised on a shelf or a hanger?  Maybe it needs to be stretched across the ceiling with a light on it or behind it?  An unexpected change or crazy departure from the way a given item is typically displayed and sold, can make the product more appealing and increase sales. The very fact that it’s displayed differently in your store already helps set the merchandise and you apart.  Just because it’s always been stacked on a shelf doesn’t mean it can’t be stretched across a colorful frame or canvas stretcher.

Employee Theft Tip

One good policy to deter employee theft is to not allow purses or bags in the store. Employees are told not to purchase items while on duty.  Employees are asked to make purchases at the end of their shift so that they do not have a bag full of questionable items sitting around the store.  Once a bag is available, no one really knows if everything was paid for or if items have been added to the bag after a purchase. A policy that requires that purses be left elsewhere will ensure that the employee is not stuffing their bags with merchandise to carry out later.

©2011 Retail Redefined and retailrichez.com. All rights reserved.