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Apple expected to expand store-within-store presence at Walmart, Target

post #1 of 21
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Apple's reach will grow to new, untapped markets within the U.S. over the next two years with store-within-a-store retail outlets set to expand at Target and Walmart.

Analyst Gene Munster with Piper Jaffray noted that while Apple currently has just 250 retail locations in the U.S., the company has the potential to reach many new customers by expanding its micro-store concept.

Currently, Walmart has over 3,800 locations in the U.S., and Target has 1,700 stores. Munster expects Walmart to be a significant partner for Apple in expanding the company's presence, as Walmart has better rural distribution.

Apple is currently testing its store-within-a-store concept at two Target locations, and 23 more stores will be added before the end of the year. AppleInsider was first to report in January that Apple would begin opening new outlets within Target locations this year.

In addition to Target, there is also one Apple store-within-a-store being tested at one Walmart in Lowell, Ark. That Walmart features a dedicated space that is distinctly separate from the rest of the big-box retailer's other departments.

Munster visited one of Apple's two Target micro-stores, and found it similar to Apple's existing Best Buy locations, which are present in about 40 percent of Best Buy's U.S. stores. However, unlike Best Buy, Target does not sell any of Apple's Mac lineup.

Walmart
New signage prominently displayed at Walmart's Lowell, Ark. location. | Source: ifoapplestore.com


"We believe the Target/Apple relationship will not expand to the full Mac lineup given Target does not sell a significant line of PCs," Munster wrote in a note to investors on Thursday.

From his visit to Target's micro-store, Munster found that product inventory was unsurprisingly far less than Apple would carry at its own retail stores. However, he did find that Target carried most of the company's product lineup, with the exception of Mac hardware and software.

"The Apple micro-store was staffed by a Target employee who claimed to have received two hours of training from Apple," he said. "Overall, the layout of the Target micro-store was more inviting compared to other Best Buy Apple micro-stores we have visited, in our opinion."

Apple Chief Executive Tim Cook was asked about his company's store-within-a-store initiative and its relationship with Walmart during Apple's quarterly earnings conference call last week. Cook didn't offer much in the way of details, but explained that Apple is "trying some things." He said he didn't expect Apple to be present in 10,000 Walmarts.
post #2 of 21
Oh great. Yet another place to buy an iOS device. Really does Apple actually make anything else, or is this it.
post #3 of 21
Quote:
Originally Posted by tony3d View Post

Oh great. Yet another place to buy an iOS device. Really does Apple actually make anything else, or is this it.

 

 

Yeah - Apple does make other stuff.

 

But iOS is what sells.

post #4 of 21

It's not an issue of being a discount store brand.  Apple is a mass brand and as such needs to keep expanding its presence.  I used to work for a small manufacturer/retail chain that had a huge opportunity at Target doing a shop in shop (for the stationery aisle).  The then owners of the company, who were not Target shoppers (or any mass retailers for that matter) thought the exact same thing - that going into Target would damage their brand.  They just couldn't get their arms around the idea that Target would have made significantly more people aware of their brand and sales at Target alone would have more than doubled what the company was doing with their own stores.

 

Yes, Apple has become an iconic brand, but they don't have stores in every city and there are large areas of the US where consumers are still more likely to be buying the traditional HP or Dell PC because it's what they see at Walmart, Office Depot, etc.

 

Distribution is the name of the game and getting more eyes on Apple's products will drive sales.  Yes, it kind of goes against what those of us who have supported Apple for decades feel about the brand, but it's inevitable for a great product or brand to expand its reach because eventually more people come to realize just how great a product it is.

 

This type of expansion of brands has happened time and again.  Think about Honda as a perfect example.  In their infancy, they attracted a very small group of consumers because they only produced cars that appealed to a certain group of people.  They slowly expanded, had great reliability, design and value and guess what, they grew.  Those loyal Honda fans (I used to be one having owned a CRX hf, CRX Si, two Accord Ex's and two Odyssey's) who bemoan the loss of the lightweight CRX or sporty Prelude understand how this type of growth plays out.  I'm hoping that Apple doesn't follow the exact same path as Honda given they've lost their ability to produce decent looking cars, exciting engines and technology and seem to simply be going after volume regardless of whether they produce and offer the best solution.

post #5 of 21
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Apple is now officially a discount store brand.

 

I'm surprised.  Is this the work of the new retail chief?

It's a post-discount store world, much like it's a post PC world.

 

Seriously, you can't discount (intended) the power of these retailers.  

post #6 of 21
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Apple is now officially a discount store brand.

 

I'm surprised.  Is this the work of the new retail chief?

 

Lots of great products are sold in discount stores. What's your point? (that is, of course, assuming that you actually have a point for a change).
 

Quote:
Originally Posted by tony3d View Post

Oh great. Yet another place to buy an iOS device. Really does Apple actually make anything else, or is this it.

 

What's the problem with expanding their distribution?

It's good for Apple since it can add sales.

It's good for the consumer since it provides more locations where they can buy the product.

It's good for the environment because people who want immediate gratification can get Apple products without driving to an Apple Store.

So who loses? (Other than the people who simply can't stand Apple for some irrational reason and don't want them to do well).

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Gatorguy 5/31/13
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post #7 of 21
Quote:
Originally Posted by AppleInsider View Post

Apple's reach will grow to new, untapped markets within the U.S. over the next two years with store-within-a-store retail outlets set to expand at Target and Walmart.
 

 

So there are people in the U.S. who didn't know about Apple or were unable to buy their products ?!? People who only buy at Target and Walmart ?

post #8 of 21
Quote:
Originally Posted by mausz View Post

 

So there are people in the U.S. who didn't know about Apple or were unable to buy their products ?!? People who only buy at Target and Walmart ?

Believe it or not, yes, there are people who don't REALLY know what Apple has.  They might think about the iPod because the kids or grandkids have one or talk about it, but without a presence in a much broader offering of retailers, some people just don't know or understand fully who Apple is.

 

The piece that gets the Apple faithful up in arms about "selling out" when they hear Apple is expanding at Walmart and Target is that they saw the brand as something exclusive to them and people like them.  Apple understood this early on - with their Think Different ads.  People bought Apple because they bought into this thinking.  Now Apple stands more for Think the Same, because so many people are latching on to the brand.

 

Android had a chance to be the new "different" but they went after volume immediately and really just attracted a group of people who were the old PC faithful - those who wouldn't buy Apple because.  I'm generalizing of course, but I've seen so much of this in my own connections, that I know it has played a part in both the success of Apple and the division between Apple and Android.

post #9 of 21

Another wall street analyst yappings considered 'news' by AI.  Why do we care what Gene Munster thinks Apple may or may not do?
 

post #10 of 21
Quote:
Originally Posted by Conrail View Post

Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Apple is now officially a discount store brand.

 

I'm surprised.  Is this the work of the new retail chief?

It's a post-discount store world, much like it's a post PC world.

 

Seriously, you can't discount (intended) the power of these retailers.  

If it is a post-discount store world, then isn't Apple clinging to the old regime?  What is replacing discount stores?  Shouldn't Apple be selling in the new category, given that the discount stores are going away in a post-discount store world?

post #11 of 21
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Apple is now officially a discount store brand.

 

I'm surprised.  Is this the work of the new retail chief?


So Apple's too good for Target and Walmart?  Snob.

post #12 of 21

I wonder how good a deal this is for the retailers. It's great for Apple that people can go someplace close to poke and prod the goods, but they may just go home and order online. I've shopped at Target, and getting an employee's attention (if you can find one) to pull product out of a locked case to complete the sale is difficult to impossible.

post #13 of 21
Quote:
Originally Posted by mausz View Post

 

So there are people in the U.S. who didn't know about Apple or were unable to buy their products ?!? People who only buy at Target and Walmart ?

 

You'd be surprised at how many people never buy anything online and perhaps live quite a distance from an Apple Store.

 

Quote:
Originally Posted by JollyPaul View Post

I wonder how good a deal this is for the retailers. It's great for Apple that people can go someplace close to poke and prod the goods, but they may just go home and order online. I've shopped at Target, and getting an employee's attention (if you can find one) to pull product out of a locked case to complete the sale is difficult to impossible.

 

Except that a large percentage of the population never orders anything online. Certainly, there will be some customers who will do that, but in a Walmart or Target, it's certainly not everyone, and probably not even a majority. In addition, of course, is the advantage of getting your idevice right away rather than waiting for shipping. Since Apple charges sales tax in most (if not all) states, you don't save anything by buying it online. That takes away the major incentive for buying online.

Obviously, it's something that these retailers keep in mind - and is rumored to be one of the reasons why Target dropped the Kindle from their store. But they have a good idea how much impact it has.

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Gatorguy 5/31/13
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post #14 of 21

I live close to the Walmart in Lowell AR...

 

The displays are great, and were manned by someone with an Apple badge on..  He said this was set up with Best Buy..   These displays are pretty hard to miss, and seem to be generating a lot of interest..   What you can't see in the picture is that EVERYTHING around these displays is also for Apple and and Apple devices...   Accessories for just about everything iOS...   They also had on section with Apple keyboards, trackpads, mice, and other stuff..   There were also Airports and AppleTVs, which I don't think Walmart has carried before..  Looks like at least 25% of the electronics department was set up for Apple and other companies that sell stuff for Apple...

 

When Apple first started selling iPads, years ago, I asked one of the associates how they were selling, and he said they were selling all they could get..  He also said the high end models were selling better than the lower end ones...

 

Walmart sells to all income levels... 

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post #15 of 21

We do not need more places to buy Apple products, we need more places to get them fixed.  The genius bar at most Apple stores I have been to are often overwhelmed because they are in the busiest areas and there are few stores.  If I could go to my walmart and have a true Apple employee with the resources to diagnose and fix my device then that would be very helpful.  I have not been impressed with the Best Buy versions of the Apple stores.

post #16 of 21
Quote:
Originally Posted by LMGS View Post

 

Walmart sells to all income levels... 

 

 

I've never seen a Ferrari owner shop at Wal*Mart.

post #17 of 21
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

 

 

I've never seen a Ferrari owner shop at Wal*Mart.

A comment like that suggests what?

 

I've known some pretty powerful and RICH people who wouldn't be caught dead in a Ferrari, let alone a Porsche, Lambo, Merc, BMW, etc., and they have no issue shopping Wal-Mart.  One thing some wealthy (not all) learn, especially those that have earned their money working from the ground up, is that you want to keep as much of your money as you can.  Shopping at Wal-Mart for something they can and do sell for less than the store down the road is what they'll do.  I've always been that way.  Also, convenience plays a part and in some areas of the country, you're just not going to find an Apple store or even a Target, but chances are pretty good that Wal-Mart has these places covered.

post #18 of 21

wrong thread... oops

post #19 of 21
Quote:
Originally Posted by jmgregory1 View Post

A comment like that suggests what?

 

I've known some pretty powerful and RICH people who wouldn't be caught dead in a Ferrari, let alone a Porsche, Lambo, Merc, BMW, etc., and they have no issue shopping Wal-Mart.  One thing some wealthy (not all) learn, especially those that have earned their money working from the ground up, is that you want to keep as much of your money as you can.  Shopping at Wal-Mart for something they can and do sell for less than the store down the road is what they'll do.  I've always been that way.  Also, convenience plays a part and in some areas of the country, you're just not going to find an Apple store or even a Target, but chances are pretty good that Wal-Mart has these places covered.

 

Yep. The wealthiest person I ever met (worth about $3 B before he passed away) drove an old Ford and hadn't bought a new suit for years. He regularly shopped at Walmart.

Two reasons:
1. If you're going to buy widget xyz, why not buy it where you can save the most money?
2. Time is valuable. If you can do all of your shopping in one trip, why make separate trips to 4 different stores? (He wouldn't ever have considered hiring a personal assistant to do his shopping for him). Of course, this was in the days before shopping online was as big as it is today, but he was sort of old-fashioned, so he might not have shopped online even today.

"I'm way over my head when it comes to technical issues like this"
Gatorguy 5/31/13
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post #20 of 21
Quote:
Originally Posted by jragosta View Post

 

Yep. The wealthiest person I ever met (worth about $3 B before he passed away) drove an old Ford and hadn't bought a new suit for years. He regularly shopped at Walmart.

Two reasons:
1. If you're going to buy widget xyz, why not buy it where you can save the most money?
2. Time is valuable. If you can do all of your shopping in one trip, why make separate trips to 4 different stores? (He wouldn't ever have considered hiring a personal assistant to do his shopping for him). Of course, this was in the days before shopping online was as big as it is today, but he was sort of old-fashioned, so he might not have shopped online even today.

Sounds almost like one of the people I knew.  I sat in a board meeting with Bill grilling my then boss (and majority owner of the business) wearing an old undershirt and work jeans.  He clearly dressed how he wanted because he had the money and power to do so.  And in most non-business situations, he was as approachable as a farm hand (which is how he often dressed), but in tense business dealings, he was sharper than a razor blade and used his appearance to his advantage.

post #21 of 21

The destructive working conditions in Apple's factories have deserved and gotten lots of attention.

 

Walmart makes Foxconn look like day care for rich kids.  Ethically, the only significant difference between the two is that Walmart buys Congressman a six pack at a time.

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