Apple stores having 'gravitational pull' on mall shoppers - report

[AppleInsider]

Analysts for investment bank Piper Jaffray spent six hours this past weekend monitoring traffic at mall-based Apple retail stores and found that the shops exerted a gravitational pull on shoppers who came within 25 feet of the entranceways.

Specifically, analyst Gene Munster and his team found that 27 percent of people walking within 25-feet of an Apple store entrance wound up entering the store. Once in the stores, however, only a fraction of those shoppers actually purchased anything. But Munster in a note to clients early Monday morning said he believes the draw may be indicative of consumers' future purchase decisions.

"The important point is this gravitational pull highlights that consumers' future buying intentions could be shifting to Apple from PCs," he explained. "If materialized, this shift should benefit Apple in 2008 and 2009."

On average, 462 people entered Apple stores each hour on Friday when the company was holding its 24-hour Black Friday sale, the analyst said. By Saturday evening, however, that number had fallen to about 241 people per hour.

During these times, Munster and his team observed the stores selling an average 5.3 Macs and 1 iPhone each hour, compared to 4.3 Macs and 1.3 iPhones during a similar round of checks back in August.

Meanwhile, the stores sold an average of 13 iPods per hour. While the analyst did not have comparative data from his August checks, he said the sales mix appeared to be favoring the higher priced models.

Of the iPods sold as Munster and his team observed, 46 percent were iPod nanos, 19 percent were iPod classics, 19 percent were iPod shuffles and 16 percent were iPod touches.

"Bottom line is the iPod mix for December appears to be favoring higher average selling price (ASP) iPods compared to our model," the analyst advised clients, noting that he had previously been forecasting for as much as 38 percent of the holiday iPod mix to be comprised of the low-cost iPod shuffles.

Munster, whose checks focused primarily on Apple stores in the Midwest and East Coast, maintained his Buy rating and $250 price target on shares of the Cupertino-based electronics maker.

[ View this article at AppleInsider.com ]

[jonnynyc]

This is news? People go into a store that has ipods before the holidays...?

[aegisdesign]

It's news that's it's a gravitational force. Previously it had been attributed to the Reality Distortion Field.

[solipsism]

Originally Posted by jonnynyc

This is news? People go into a store that has ipods before the holidays...?

Yes it is. We have stats from at least one store on Black Friday. We know the % of people who went into the store, the number of people who entered per hour, the number of units sold per hour and the percentage of sales for each iPod model. I'm glad to see the iPod touch doing so well.

[waytogobuddy]

Originally Posted by AppleInsider

Analysts for investment bank Piper Jaffray spent six hours this past weekend monitoring traffic at mall-based Apple retail stores and found that the shops exerted a gravitational pull on shoppers who came within 25 feet of the entranceways.

]

First they engineer a RDF, now Apple exerts it own gravitational forces! I'd buy stock too....

[tuneman07]

This is such a meaningless article- first off we have no control group- what is the average percentage of people who enter any store after coming within 25 feet of the door? What spot is the store in? If its at the end of a row of stores at a dead end well 100 percent of people who get within 25 feet of the store will enter. A store next to a food court will probably have 10 times more traffic in front without anyone entering. 25 percent is completely meaningless.

[nothowie]

Well, the way this is written, the gravitational pull doesn't mean much other than the point being a high percentage of those walking by are fascinated enough to check out what's going on in the store...and many of us know, once you go into an Apple Store and play with the stuff you'll eventually buy it!

More interesting though is that Munster is the one that actually has taken the extraordinary steps to climb out of his gold leaf and bronzed ivory tower to actually see what's going on..not just read surveys and channel check reports by the firms that do that sort of thing...and he is the one that "gets it" and as a result has the highest target price for Apple stock on the Street...

[cameronj]

Originally Posted by tuneman07

This is such a meaningless article- first off we have no control group- what is the average percentage of people who enter any store after coming within 25 feet of the door? What spot is the store in? If its at the end of a row of stores at a dead end well 100 percent of people who get within 25 feet of the store will enter. A store next to a food court will probably have 10 times more traffic in front without anyone entering. 25 percent is completely meaningless.

It might not be great data, but I find it hard to argue the point that it's a good thing that a wall st analyst is actually doing (or his staff is doing) some real, boots on the ground research instead of just parroting everything the company says. Of course, that would be a very quiet parrot, in Apple's case.

[pt123]

I went ino the Apple store to kill some time browsing the internet as wife shopped.

[satchmo]

Originally Posted by nothowie

Well, the way this is written, the gravitational pull doesn't mean much other than the point being a high percentage of those walking by are fascinated enough to check out what's going on in the store...and many of us know, once you go into an Apple Store and play with the stuff you'll eventually buy it!

Could the same not be said about a Victoria Secret's store?

[zanshin]

I'm assuming they're referring to pedestrian traffic only.

Shoppers within 25 feet of the Apple Store entrance in my city includes 2 lanes of very busy motor vehicle traffic that Apple probably doesn't want suddenly making a hard right turn into the storefront.

[desarc]

"the stores sold an average of 13 iPods per hour. While the analyst did not have comparative data from his August checks, he said the sales mix appeared to be favoring the higher priced models.

Of the iPods sold as Munster and his team observed, 46 percent were iPod nanos, 19 percent were iPod classics, 19 percent were iPod shuffles and 16 percent were iPod touches."


mix is favoring higher priced models - 46% nano, 19% classic, 19% shuffle, 16% touch.
so the highest priced model sold the worst, and half of all sales are from the 2nd cheapest model.
way to draw incorrect conclusions from the stats you publish.

[aegisdesign]

Perhaps it's a quantum theory experiment done wrong.

Perhaps the mere presence of Gene Munster stood outside an Apple store with a clipboard caused people to spontaneously enter the store.

"Hey, that's Gene Munster the top Wall St Analyst. I wonder what's going on? Let's go look"

[stockwhiz]

Originally Posted by nothowie

Well, the way this is written, the gravitational pull doesn't mean much other than the point being a high percentage of those walking by are fascinated enough to check out what's going on in the store...and many of us know, once you go into an Apple Store and play with the stuff you'll eventually buy it!

More interesting though is that Munster is the one that actually has taken the extraordinary steps to climb out of his gold leaf and bronzed ivory tower to actually see what's going on..not just read surveys and channel check reports by the firms that do that sort of thing...and he is the one that "gets it" and as a result has the highest target price for Apple stock on the Street...

Believe me it isnt Gene walking around in the Apple stores. He sends his 'team' of interns and/or juniors with a checklist of information that they need to cover over the weekend.

[Mac Voyer]

Originally Posted by desarc

mix is favoring higher priced models - 46% nano, 19% classic, 19% shuffle, 16% touch.
so the highest priced model sold the worst, and half of all sales are from the 2nd cheapest model.
way to draw incorrect conclusions from the stats you publish.

This also confounded me. Still, as someone who went into an Apple Store on Friday and a different one on Saturday, I also had the same observation that people seemed to be unnaturally drawn to the Apple Store. Traffic in surrounding stores was only moderately busy, while the Apple Store was packed. The traffic jam was unrelenting. I heard many people ask what kind of event was going on. Apparently, they were drawn by the crowd, itself. Again, the Apple Stores, Downtown Portland, OR and Washington Square Mall were absolute madhouses with considerably heavier traffic than other stores. And yes, I actually spent money. New iPod speakers.

[jonessodarally]

Originally Posted by desarc

"the stores sold an average of 13 iPods per hour. While the analyst did not have comparative data from his August checks, he said the sales mix appeared to be favoring the higher priced models.

Of the iPods sold as Munster and his team observed, 46 percent were iPod nanos, 19 percent were iPod classics, 19 percent were iPod shuffles and 16 percent were iPod touches."


mix is favoring higher priced models - 46% nano, 19% classic, 19% shuffle, 16% touch.
so the highest priced model sold the worst, and half of all sales are from the 2nd cheapest model.
way to draw incorrect conclusions from the stats you publish.

I would assume it was referring to the higher priced model within each iPod family. For instance, more 16 GB iPod touch sales than 8 GB iPod touch sales.

[jonessodarally]

For what it's worth, I was on Michigan Ave. in Chicago this past Saturday, and no other store was receiving near the traffic the Apple Store seemed to be getting. After our initial visit, we passed later, and it seemed like everyone walking down the sidewalk in front of us vanished into the store as we passed by. It was almost comical.

[mh71]

Originally Posted by desarc

mix is favoring higher priced models - 46% nano, 19% classic, 19% shuffle, 16% touch.
so the highest priced model sold the worst, and half of all sales are from the 2nd cheapest model.
way to draw incorrect conclusions from the stats you publish.

So, as mentioned before, all of the models(except the shuffle) come in at two different price points. If all the consumers bought the more expesive model, then the average would be $210 per ipod. If they all bought the more inexpensive model, the the average would be $163 per ipod. I think Munster is trying to imply that its closer to the $210 than $163.

[markb]

Bottom line is the iPod mix for December appears to be favoring higher average selling price (ASP) iPods compared to our model,

They are saying that they estimated a month or two ago what iPods would be selling and the mix they observed selling had more high priced units than they guessed in the past.

i.e. in October they could have guessed the mix would be 42% nano, 10% classic, 38% shuffle, 10% touch.

but they observed more classics and touches selling than they would have thought earlier.

[SpamSandwich]

Gene Munster, Apple stalker.

[solipsism]

Originally Posted by SpamSandwich

Gene Munster, Apple stalker.

[tjs]

"Bottom line is the iPod mix for December appears to be favoring higher average selling price (ASP) iPods compared to our model," the analyst advised clients, noting that he had previously been forecasting for as much as 38 percent of the holiday iPod mix to be comprised of the low-cost iPod shuffles.

[CoolHandPete]

I can attest to the gravitational pull report. I was at the Green Hills Mall in Nashville on Black Friday, and the mall didn't seem that crowded, but the Apple Store was shoulder-to-shoulder. Of course, there were at least 10-15 employees in that crowd.

Although we didn't purchase anything, I showed my dad the iPod Touch, the iPhone (he played with Google Maps for 15 minutes) and the new Macbooks. He walked out saying, "After seeing what they're doing all-around now, I'm going to buy some Apple stock."

[CREB]

Piper Jaffray will do anything to drive Apple's stock higher as many have options on it for 2008. Pathetic to say the least. It used to be that lawyers were the bain of society now I'm convinced it is investment bankers, et al.

[Kontra]

You may find interesting the exclusive interview I published today with Alex Frankel, the author of "Punching In." It's an account of front-line jobs he had at companies like Gap, Starbucks, UPS and Apple during a two-year project. We cover specifically his Apple Store insights:

Author interview: “Punching In” at the Apple Store

[solipsism]

Originally Posted by Kontra

You may find interesting the exclusive interview I published today with Alex Frankel, the author of "Punching In." It's an account of front-line jobs he had at companies like Gap, Starbucks, UPS and Apple during a two-year project. We cover specifically his Apple Store insights:

Author interview: “Punching In” at the Apple Store

That was very informative.

[cameronj]

Originally Posted by CoolHandPete

I can attest to the gravitational pull report. I was at the Green Hills Mall in Nashville on Black Friday, and the mall didn't seem that crowded, but the Apple Store was shoulder-to-shoulder. Of course, there were at least 10-15 employees in that crowd.

Although we didn't purchase anything, I showed my dad the iPod Touch, the iPhone (he played with Google Maps for 15 minutes) and the new Macbooks. He walked out saying, "After seeing what they're doing all-around now, I'm going to buy some Apple stock."

Hope he checks out the price and the PE first. He should realize he's far from the first person to say those words.

[Abster2core]

Originally Posted by AppleInsider

Analysts for investment bank Piper Jaffray spent six hours this past weekend monitoring traffic at mall-based Apple retail stores and found that the shops exerted a gravitational pull on shoppers who came within 25 feet of the entranceways.

When I read the headline, I thought it was about the effect that an Apple store can have on the stores in its vicinity.

On a visit to Toronto a year ago, I dropped into the Yorkdale shopping mall, a very large and mostly high end facility. The Apple store was packed and I overheard a manager comment on how the store was not only the busiest one in the mall, it appeared to be driving business in stores around them.

As one neighboring store employee had passed on, "Yeah, they come into my store wondering what was on sale in yours (Apple). Obviously, they either feel guilty for bothering us, but in any case, they look around and sometimes purchase. Whereas they wouldn't have even bother to look in before. " Another apparently had commented that they once thought they had one of the poorest locations in the mall. Not anymore.

Sadly to say, I was in town a couple of weeks ago and made my usual visit. Traffic was still high. However, the one comment that was most striking was, "You can get the Macbook Pro in Buffalo for $400 cheaper." To which another added, Or get an iPhone with the difference!" Perhaps the stores next door should have a talk with Apple Canada.

[thedakhorse]

So more people are coming in and buying stuff on Black Friday sale day, the first "official" begining of Christmas shopping day, compared to some random day in august?
Big surprise, does this "analyst" actually get paid to do this or just some fanatic hanging around apple stores counting people and stating the obvious.

[doh123]

Originally Posted by AppleInsider

Specifically, analyst Gene Munster and his team found that 27 percent of people walking within 25-feet of an Apple store entrance wound up entering the store.

ummm... did anyone think about the fact that anyone who had planned on going to the store in advanced, had to get within 25 feet of the door before entering, so their numbers count everyone, not just people being drawn in on a whim, but those that wanted to go in before, or even made a special trip there just for the store...

I'm not really sure what any of these numbers prove... maybe the small number of purchases were by people not going in on a whim? who knows.. this whole set of data is pretty meaningless with no comparisons.

[Fletch]

We have a number of Apple stores in Southern California and it doesn't matter what time of day I go in, or which store but they are always PACKED. And this has been happening for months and months....not just as of late. It's kind of annoying because sometimes one has to wait to even check out a machine or iPod but at the same time it's cool to see the attention they're getting.

[kaioslider]

I think I can see a pattern here now. Clearly Apple is working to time travel so that it may right past Apple Computer Inc. missteps that allowed Microsoft Windows to become the dominant OS. Perhaps instead of giving M$ a Mac to develop software for, this time they'll give them a copy of pong; probably have a special pirate flag ready for the event and everything

[NOFEER]

it's a retail thing, basically stores do better when more people cross in front of it. i bet this is standard analysis for store placement in a mall or on a street. location location location so why does macdonalds or starbucks want corners.....traffic flow. macdonalds and starbucks knows exactly what their percentage is. i bet most would kill for 27% that's huge, considering the tracfic around apple new york, chicago etc. WOW

[solipsism]

Originally Posted by NOFEER

it's a retail thing, basically stores do better when more people cross in front of it. i bet this is standard analysis for store placement in a mall or on a street. location location location so why does macdonalds or starbucks want corners.....traffic flow. macdonalds and starbucks knows exactly what their percentage is. i bet most would kill for 27% that's huge, considering the tracfic around apple new york, chicago etc. WOW

The most interesting aspect of this analysis is that Apple stores are becoming anchor stores despite their small size compared to large department stores. That people might be going to one mall over another because of the presence of an Apple store. Surely Apple and their top-notch negotiators will use this to their advantage when renewing their lease contracts.

[JakeBarnes]

My observations suggest that McDonalds too exerts a gravitational pull, with a whopping 93% of those coming within twenty-five feet of the entrance actually going in and 100% of entrants making a purchase.

Beat that, Apple!

I should apply for a science grant.

[solipsism]

Originally Posted by JakeBarnes

My observations suggest that McDonalds too exerts a gravitational pull, with a whopping 93% of those coming within twenty-five feet of the entrance actually going in and 100% of entrants making a purchase.

Beat that, Apple!

I should apply for a science grant.

For a mall location that would be quite impressive but for a brick-and-mortar store that would be low.

Yes, I'm aware you weren't being serious.