Think Inside the Box: Apple’s Retail Success

Apple’s 147th retail store will open its doors to customers on may 19, 2006 at fifth avenue commemorating the fifth anniversary of apple’s very first retail store. The 20,000-square-foot subterranean store, situated under the general motors building plaza, will have a 32-foot glass cube marking the store’s entranceway reminiscent of the louvre pyramid made by I.M. Pei. Rumors have it that Steve Jobs had the titanium constraints replaced because it interfered with the aesthetics of the $9 million dollar cube.

“We spent a lot of time designing the store, and it deserves to be built perfectly,” Mr. Jobs said.

Apple says the stores have been profitable for several years, providing $151 million in operating income in fiscal 2005. “The numbers have been just astonishing in terms of the traditional retail numbers we look at,” says Charlie Wolf, an analyst at Needham & Co.

But it’s not all a bed of roses for Apple. Recently, there has been a decline in sales following Apple’s shift to Macs based on microprocessors from Intel Corp., leading customers to postpone their purchases until the transition is complete. Lawsuits from resellers accusing Apple of favoring its own stores when deciding how to dole out inventory, has plagued the company since 2002 until this year.

Apple’s success in the retail industry, inspired such companies as Gateway and Palm to follow suit, but only to fail miserably. So what’s Apple got that others don’t?

Analysts and customers alike, have high praises for Apple store workers for their fluency in the company’s products. The “genius bar” is a section where technical experts help customers fix problems with their Macs and iPods, often free of charge. Workshops for programs like GarageBand and iMac, are held in theater-like sections of the stores, allowing customers to get familiar on how to use them.

New products are displayed on large open tables rather than stacked on shelves, makes it more inviting for consumers to learn more about the merchandise while having fun. Maybe we should “Think inside the box” as Apple’s ad for the store’s grand opening says, and see where it takes us.

Apple’s 147th retail store will open its doors to customers on may 19, 2006 at fifth avenue commemorating the fifth anniversary of apple’s very first retail store. The 20,000-square-foot subterranean store, situated under the general motors building plaza, will have a 32-foot glass cube marking the store’s entranceway reminiscent of the louvre pyramid made by I.M. Pei. Rumors have it that Steve Jobs had the titanium constraints replaced because it interfered with the aesthetics of the $9 million dollar cube.

“We spent a lot of time designing the store, and it deserves to be built perfectly,” Mr. Jobs said.

Apple says the stores have been profitable for several years, providing $151 million in operating income in fiscal 2005. “The numbers have been just astonishing in terms of the traditional retail numbers we look at,” says Charlie Wolf, an analyst at Needham & Co.

But it’s not all a bed of roses for Apple. Recently, there has been a decline in sales following Apple’s shift to Macs based on microprocessors from Intel Corp., leading customers to postpone their purchases until the transition is complete. Lawsuits from resellers accusing Apple of favoring its own stores when deciding how to dole out inventory, has plagued the company since 2002 until this year.

Apple’s success in the retail industry, inspired such companies as Gateway and Palm to follow suit, but only to fail miserably. So what’s Apple got that others don’t?

Analysts and customers alike, have high praises for Apple store workers for their fluency in the company’s products. The “genius bar” is a section where technical experts help customers fix problems with their Macs and iPods, often free of charge. Workshops for programs like GarageBand and iMac, are held in theater-like sections of the stores, allowing customers to get familiar on how to use them.

New products are displayed on large open tables rather than stacked on shelves, makes it more inviting for consumers to learn more about the merchandise while having fun. Maybe we should “Think inside the box” as Apple’s ad for the store’s grand opening says, and see where it takes us.