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Apple retail stores 'bulging at the seams' at 8400 average square feet

post #1 of 54
Thread Starter 
Apple's original vision for its retail operations is proving too small, as the company's stores are continuously mobbed with crowds looking to buy iPhones, iPads and Macs.

When the company's retail operations began 11 years ago, Apple initially targeted 6,000-square-foot stores as the ideal size, according to analyst Charlie Wolf with Needham & Company. As of Apple's fiscal 2011 10-K report, Apple's retail stores are now slightly larger, at 8,400 square feet per store.

But even as they have grown, Apple's retail stores are still "bulging at the seams," according to Wolf. That's because the number of visitors on a per-store basis has grown at a 15.3 percent annual rate, making the initial vision of 6,000-square-foot store just too small.

Apple's initial plans also called for the company to open around 100 stores. But at the end of the March quarter, Apple had a total of 363 retail stores open, with a third of them overseas.

"The company has had to rethink this strategy as the crowds have grown," Wolf wrote in a note to investors on Tuesday. "Apple is moving some existing stores to larger locations."

For example, Apple is currently expanding its store in New York City's SoHo neighborhood in Lower Manhattan. The project has required Apple to build a $1.4 million temporary store to serve customers while construction is underway.

Grand Central


Apple is also building a new, larger retail store in Palo Alto, Calif., just steps away from the original location, in order to better serve customers. The 15,030-square-foot project has been referred to by Apple as a "prototype" store that will draw on the company's more than 10 years of experience in designing iconic and heavily trafficked retail outlets.

In addition to expanding some current stores, Apple is also building new stores that are even larger. Among the new megastores are a 30,000-square-foot space in London's, Covent Garden, a 16,000-square-foot store with a giant glass cylinder in the Pudong district of Shanghai, and a 20,000-square foot space in New York City's historic Grand Central Terminal.
post #2 of 54

These stores can definitely use some more space. Every Apple store I have been to has been too crowded. My wife hates to even go in one now because they are so crowded. Good problem to have to deal with especially if you are a shareholder.

post #3 of 54
Quote:
Originally Posted by kozchris View Post

These stores can definitely use some more space. Every Apple store I have been to has been too crowded. My wife hates to even go in one now because they are so crowded. Good problem to have to deal with especially if you are a shareholder.

Agreed. I've never seen an Apple store that wasn't packed with customers.

Remember when Apple launched the stores? All the naysayers saying "Dell tried it and it didn't work" and "Apple is really doomed this time"..... It is really funny to see how it turned out.
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post #4 of 54
Also funny how I read in Steve Jobs biography how at Apple "the board" tried to kill Steve's vision of these stores saying it was a huge waist of money and doomed to failure! LOL :-)
post #5 of 54
It is irritating how I have to drive over 100 miles to the other side of Memphis to the closest store. You'd think with the success of their products and huge amount of revenue they'd have many more stores. Probably another stupid board decision.....
post #6 of 54

The problem I see is how to improve customer flow and product layout if the issue is really just related to too many people coming through the doors.  It's not like Apple has new products to showcase in another section of the store.  It just comes down to how many tables of iPads, iPhones, MacBook's, etc each store can hold.  The back-end of the store, where the 3rd party products are always seems to be the place where customers who couldn't get to a table of product go, or for those with a genius appt wait.  It's not efficient, although I understand Apple sets up the stores this way to encourage add-on sales.

 

I would think they could sell more 3rd party products and rope consumers further into the ecosystem if they did a better job of having things like headsets, speakers, external drives, etc nearer to the Macs and i products.  I can't tell you how many times my wife will put on one of the 3rd party headsets to listen to a song on an iPhone and comment how good it sounds and how comfortable they are.  She could easily be sold on a pair if she didn't have to walk away to go find the model she was listening to.  I would be the same if they had some great speakers, say the Zeppelin Air, setup for testing with my own iPhone and song choice.

post #7 of 54
Quote:
Originally Posted by jragosta View Post


Agreed. I've never seen an Apple store that wasn't packed with customers.
Remember when Apple launched the stores? All the naysayers saying "Dell tried it and it didn't work" and "Apple is really doomed this time"..... It is really funny to see how it turned out.

If they were twice the size and had the same number of visitors Apple haters would be crowing they were 'half empty'.  lol.gif

 

I also suspect visiting Apple stores is akin to going to Disney, people just love being there.  Do we know if larger would really translate into more sales?  I hope so and I guess Apple think so and they know what they are doing. (answered my own question!)

 

p.s. when is AI going to fix this new system? Or do I I need IE and Windows to run it to get the selection of various smily faces?

Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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Been using Apple since Apple ][ - Long on AAPL so biased
nMac Pro 6 Core, MacBookPro i7, MacBookPro i5, iPhones 5 and 5s, iPad Air, 2013 Mac mini, SE30, IIFx, Towers; G4 & G3.
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post #8 of 54
The problem isn't just store size, it is layout. Traffic is badly managed, even in the wider stores. Their functional arrangement with a greeter is not complimented by a space for said person and people being greeted. As people enter the store, there either needs to be a parkway down the center, or some other mechanism to get people to fan out more quickly.

The product interaction opportunities are important, but I think they often come at the expense of other customers. I also wish they carried a wider selection of accessories, so that it remains the first place I go for my needs. Things like the lack of a network attached storage device, a wider range of iPod/iPhone/iPad docks, and (shrug) even some things that compete with their core offerings like Sonos.

It isn't that the performance of the segment is waning-- just that their long-term prospects seem better if there is more of a complete offering, especially as other retailers are suffering.
post #9 of 54
Again.... If Apple had many more "LOCAL" stores people would not have to flood the handfull of stores they have....
post #10 of 54

The Apple Retail Store at the Promenade located at 17711 Chenal Parkway in Little Rock Arkansas is relatively quiet.  I have not seen more than 40 customers in the store at once; actually quite enjoyable as opposed to Apple Store Valley Fair located at Valley Fair Mall at 2855 Stevens Creek Blvd in Santa Clara California.

 

The Apple Retail Store at the Promenade had only approximately 50 people in line for the opening of the new iPad (3rd generation).

The Apple Retail Store at Valley Fair Mall had thousands upon thousands of people in line for the opening of the iPhone 4S. 

post #11 of 54

"It is irritating how I have to drive over 100 miles to the other side of Memphis to the closest store."

 

Don't complain.  I have to drive over 135 miles to the nearest store and its in the middle of downtown Dallas. :-( 

en

post #12 of 54
Quote:
Originally Posted by not1lost View Post

Again.... If Apple had many more "LOCAL" stores people would not have to flood the handfull of stores they have....

 

Completely agree!  If you think the situation is bad in your area, think of China, which is Apple's fastest growing market.  They have, what, three stores in China?  This is crazy.  As Apple's profits double each year, their customer base also doubles.  They need to do something radical about building stores faster.  They're way past the, "every store a unique work of art" phase!

post #13 of 54
I understand everyone's concerns over the number and sizes of Apple Stores but let's remember that they are the most successful retailer by square foot and probably one of the most successful retailers in the world. For that reason I have to give them some leeway in knowing what is the best strategy for building out new stores. Should they buy old Borders stores to create super Apple Stores complete with coffee shops and full repair shops? Should they start building out as quickly as Gateway did just to saturate a market? Clearly there is a balance but I would side with Apple that building more cautiously is better than building too haphazardly.

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"The real haunted empire?  It's the New York Times." ~SockRolid

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post #14 of 54
Quote:
Originally Posted by NormM View Post

Completely agree!  If you think the situation is bad in your area, think of China, which is Apple's fastest growing market.  They have, what, three stores in China?  This is crazy.  As Apple's profits double each year, their customer base also doubles.  They need to do something radical about building stores faster.  They're way past the, "every store a unique work of art" phase!

Your sooo right! It's insanity ! Look at Walmart when their success took off they started building stores as fast as they could EVERYWHERE it doesn't look like its hurt them.... I know Apple is unique and doesn't need as many stores as Walmart in as many places. But come on Apple join the real world where gas prices are almost four bucks a gallon! Where people WANT TO go to your stores and BUY your products and WOULD MUCH MORE OFTEN if they were more accessable and didn't have to spend $50.00 on gas and three hours just to wait in line to look around and talk to a real person about your products.
post #15 of 54
In my experience (two St. Louis, Mo stores) the majority of people in the Apple store are not there to buy something. They are waiting in line to speak to a genius. I see it all the time.
post #16 of 54

It may be that the "store-within-a-store" efforts at WalMart, et.al., are designed to take some of the heat off the primary retail stores.

 

I visited the Birmingham, AL Apple Store this past weekend, just past lunchtime on Sunday.  You could stir  the folks with a stick.  Once past the greeter, I ducked into the far-right aisle, even though the accessory I wanted was on the left side of the store... it was the least crowded route.  Once past all the tables, it was easy to cross over.

 

The only comment I could make about their retail experience is, there seem to be a LOT of employees on the floor, but it's not always clear what their roles are.  Over time, I have observed about a 50% chance of being flat-out ignored by the very first employee I encounter, presumably because they are busy with another task.  If I had to wait more than a couple of minutes, it could become a really negative experience, but I've found someone helpful relatively quickly.

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Quality isn't expensive... it's priceless.

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post #17 of 54

My local Apple Store is usually full of kids using the free internet access to update their Facebook page. Address that problem and much of the over crowding at weekends and late afternoon would go away.
 

post #18 of 54
Quote:
Originally Posted by MacBook Pro View Post

The Apple Retail Store at the Promenade located at 17711 Chenal Parkway in Little Rock Arkansas is relatively quiet.  I have not seen more than 40 customers in the store at once; actually quite enjoyable as opposed to Apple Store Valley Fair located at Valley Fair Mall at 2855 Stevens Creek Blvd in Santa Clara California.

I have to laugh - it's not crowded because you haven't seen more than 40 customers in the store at once.

That's roughly the entire annual customer base of the average Microsoft store.
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post #19 of 54
Quote:
Originally Posted by Shaun, UK View Post

My local Apple Store is usually full of kids using the free internet access to update their Facebook page. Address that problem and much of the over crowding at weekends and late afternoon would go away.

I understand that concern but I would argue that the open WiFi and fully functioning devices are a key part of theApple Store's success. Then consider that these kids are tomorrow's decision makers so shunning them now might not be in Apple's best longerm interest.

"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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"The real haunted empire?  It's the New York Times." ~SockRolid

"There is no rule that says the best phones must have the largest screen." ~RoundaboutNow

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post #20 of 54

Apple got three things right.

 

Tactility.  The ability to actually try the gear out on your own without navigating through a portcullis of bulky security devices, WiFi passwords and so on.

 

Design.  Keeping the interior layout and visuals of the stores very simple and not distracting from checking out the products, as well as placing the product at a regular desktop height instead of cramming it in on shelves that require the customer to reach up or down.

 

Support.  Making technical support in the stores accessible and central to the concept.

 

Those three things were clear, in my view, from the first day I laid eyes on an Apple Store retail location back in 2002.

 

I think Apple would do well to consider having more locations.  I'm convinced now that a place like Duluth, MN or Fargo, ND or Allentown, PA or a good many college towns could support an Apple Store, and I'm even more convinced that the major metro markets could easily support neighborhood stores rather than just relying on a few major malls that are difficult to get to.  I'm less convinced by the idea of making the existing locations bigger.  This suits mall owners and operators with suitable spaces more than it suits Apple.

post #21 of 54
Quote:
Originally Posted by Shaun, UK View Post
My local Apple Store is usually full of kids using the free internet access to update their Facebook page.

 

Could have sworn Apple blocked Facebook for that very reason.

Originally posted by Marvin

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Originally posted by Marvin

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post #22 of 54
Quote:
Originally Posted by lkrupp View Post

In my experience (two St. Louis, Mo stores) the majority of people in the Apple store are not there to buy something. They are waiting in line to speak to a genius. I see it all the time.

Are you suggesting that Apple products require more support than competitors' offerings? People are milling about the entire store. How do you know why each one is there? I always see a lot of white Apple logo bags leaving the store.

 

Also, as crowded as Apple stores are I would estimate that many times more product is sold online than in retail stores, including all the store within a store locations.


Edited by mstone - 5/8/12 at 9:07am

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post #23 of 54

One shareholder's perspective:

 

As some people here have pointed out, "over-crowded" stores do deter _some_ potential shoppers, and that's obviously not a good thing.  

 

But crowded stores, in my humble opinion, do more to help Apple than hurt Apple.  In fact, I'm less concerned about over-crowding than I am about Apple stores that might eventually feel rather empty and huge.

 

My solution? Open more 6,000+/- sqft stores in markets where over-crowding is a true problem, and continue to very _selectively_ open the 15,000 sqft and larger stores.

post #24 of 54
Quote:
Originally Posted by cherrypop View Post

One shareholder's perspective:

 

As some people here have pointed out, "over-crowded" stores do deter _some_ potential shoppers, and that's obviously not a good thing.  

 

 

Nobody goes to Apple stores anymore.  They are way too crowded!

 

-- Apologies to Yogi Berra


Edited by I am a Zither Zather Zuzz - 5/8/12 at 5:16pm
post #25 of 54
Quote:
Originally Posted by digitalclips View Post
Do we know if larger would really translate into more sales? 

This is what I was wondering.  Seems Apple should be cautious in how they up size stores.  It makes sense to have some very large stores in the mega cities of the world, but in smaller places bigger stores might be a risky proposition.  I can only think of the big car companies who built giant factories everywhere when times were good only to shut them down and lay everyone off when sales inevitably drop.  We don't like to think of this, but someday there will be a drop in sales for Apple.  What would be the better scenario:  big stores that look half empty of customers, or smaller stores that still look busy and successful?  

post #26 of 54
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Nobody goes to Apple stores anymore.  They are way too crowded!

I always like your posts, but I like it more when you 're original and more biting. 

post #27 of 54
Quote:
Originally Posted by I am a Zither Zather Zuzz View Post

Nobody goes to Apple stores anymore.  They are way too crowded!

 

Read my my solution, which I included with my original post.

post #28 of 54
Quote:
Originally Posted by not1lost View Post

It is irritating how I have to drive over 100 miles to the other side of Memphis to the closest store. You'd think with the success of their products and huge amount of revenue they'd have many more stores. Probably another stupid board decision.....

 

More like it isn't just their decision. Believe it or not they have to deal with landlords etc. They can't just wave their hands and have all the permissions and space to build whatever they want, where and when they want. 

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

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post #29 of 54
Quote:
Originally Posted by MacBook Pro View Post

The Apple Retail Store at the Promenade located at 17711 Chenal Parkway in Little Rock Arkansas is relatively quiet.  I have not seen more than 40 customers in the store at once; actually quite enjoyable as opposed to Apple Store Valley Fair located at Valley Fair Mall at 2855 Stevens Creek Blvd in Santa Clara California.

 

It's also a relatively new store in an area that isn't known for being hip to current tech and just dying to go hang out at a store.

 

The Promenade (and yes I am very familiar with it cause I have family in the area) isn't a mall in the sense of say Park Plaza or the old University Mall across the street that had movie theaters, food court etc for the kids from Forest Heights, Catholic and Hall High and the Mount to go chill. Those loitering high school kids are a major traffic issue in many stores. Not just Apple but bookstores etc. 

 

Also, the whole Chenal area isn't exactly conducive to going to attend classes and such. Yes I know that Little Rock is spreading west but it isn't quite there yet. Many folks aren't likely to go all the way out there to go to a One to One or a workshop since they have little other reason to go there. Putting the store there was probably easier since the Promenade was still in the early stages and under construction so they were wooing 'high class' type places but really the new Target center build on the Univ Mall grounds would probably have been a smarter pick if they really wanted traffic. 

 

As for the current stores in any area, the real issue isn't the paying customers. It's the other services. It's too dang noisy in most stores to really hear a class or even a teacher right next to you. They need to expand their stores and put things like the tech services and the teaching in their own areas. The Grove in LA has a good layout for this. You buy downstairs, you teach and learn upstairs. They even have a small theatre for their workshops. or did the last time I was over there. I've heard Apple isn't building those areas anymore. I overheard someone at Third Street when I was there about a month ago saying theirs isn't being moved to the new store either and I worry about how that's going to work out for them because they are a huge event store for this area. 

A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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A non tech's thoughts on Apple stuff 

(She's family so I'm a little biased)

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post #30 of 54

I've been to every Apple store in New York and the buzz is off the charts at each one. It's part of the hype, especially for New Yorkers, who directly associate waiting in line for retail sales, tickets, etc. to the thing being more desirable.

 

It seems tricky, managing this sort of growth. Too many stores and the brand is diluted, too few and the crowds are maddening.

 

I usually don't need to wait long to get a retail rep's attention. That would suck. They have some innovative solutions, for example, EasyPay and using the Apple Store App to schedule Genius bar appointments

 

FWIW, the 5th Avenue store has a huge pickup scene.

For your sake, I hope you're right.
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post #31 of 54

When these stores were initially conceived and launched, Apple was just selling Macs. The iPod launched in October 2001, six months after the first Apple Retail Store opened. The big traffic drivers to the stores have been the iPhone (2007) and iPad (2010), and unsurprisingly, the iPhone especially has been the key to Apple's growth in both revenue and profit.

 

The downtown Palo Alto store, so pleasant to visit in the middle of the last decade is now woefully undersized. I look forward to new store's opening, although I will always think of the current store as Steve's.

post #32 of 54
Quote:
Originally Posted by lkrupp View Post

In my experience (two St. Louis, Mo stores) the majority of people in the Apple store are not there to buy something. They are waiting in line to speak to a genius. I see it all the time.

 

Quote:
Originally Posted by mstone View Post

Are you suggesting that Apple products require more support than competitors' offerings? People are milling about the entire store. How do you know why each one is there? I always see a lot of white Apple logo bags leaving the store.

 

Also, as crowded as Apple stores are I would estimate that many times more product is sold online than in retail stores, including all the store within a store locations.

 

What I see are people sitting there with their laptops, iPhones, iPads, etc. looking at the genius appointment display and tapping their fingers on the table. Just my personal observation at two stores in my area. 

post #33 of 54

Makes me wonder if they choose to keep stores smaller so they always look really packed.  Are Microsoft stores bigger in size?  I know the one here in Minneapolis at the Mall of America is usually dead while the Apple store right across from it is usually packed.  The only people I see at the Microsoft store are those playing around with XBox.
 

post #34 of 54

The stores are crowded because people come in and play on the computers. What Apple needs is to make their stores like McDonald's. Have the "Playland" separate from the part of the store where buyers are.

post #35 of 54
Quote:
Originally Posted by jragosta View Post

Agreed. I've never seen an Apple store that wasn't packed with customers.
Remember when Apple launched the stores? All the naysayers saying "Dell tried it and it didn't work" and "Apple is really doomed this time"..... It is really funny to see how it turned out.

And so much better than the sad, unattended "store within a store" outlets that Apple tried in the late 90s at select CompUSA stores. Of course, CompUSA stores didn't see that much retail foot traffic shortly before they went out of business on their own. Apple's retail operations are far friendlier and staffed by people who seem to know what they are talking about, not some bored high school dropouts.

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post #36 of 54

The larger stores will have a vest wearing genius at the door: Welcome to Applemart. The tram to isle 623 leaves in 5 minutes at the main terminal. Welcome to Applemart...

post #37 of 54
Also as far as good locations go as quoted above and college towns the Arkansas State Univerity is in mine and they have to drive over 100 miles to the nearest location in Memphis. It is a booming town and was even noted in Forbes magazine as one of America's most prosperous cities. Building and new development is unbelievable even in this economy. It's rediculous for Apple not to have a store here.

"most people are buying on line" of corse they are there is no store in any reasonable distance..... How much more would they sell if there were where people could go in and actually see, try out, and talk to a real person about these awesome machines!

"isn't just there decision, they have to deal with landlords - build anywhere ..... Really? Really? Like Apple can't buy land and build a store? They have "rent" a building? How often do you get outside and drive around? Is that the best you can come up with? I hope your not on the board....

I assure you there are plenty of retail development areas booming that would GLADLY sell Apple a spot and build to suit.... And ts not like they can't afford it... Besides thar it would probably pay for itself in the first five years....

I believe business building expense is usually a tax right-off too ....
Edited by not1lost - 5/8/12 at 12:54pm
post #38 of 54
COME TO JONESBORO ARKANSAS APPLE!
We'll relieve some of that pressure !
Home of Arkansas State Universty!
"Recently Forbes magazine released their annual "best places for business and careers" rankings and they apparently agree that "It's Great in Jonesboro!'  In the ranking of the best small metros for business and careers, Jonesboro placed 46 out of 179,  ranking ahead of Pine Bluff and Hot Springs, making it the highest ranking Arkansas small metro.  In the rankings, the Southeast is home to half of the top ten for the third straight year."
 
http://www.jonesbororealestate.com/about-jonesboro.php
post #39 of 54
I had a Genius Bar appointment at an Apple store in Charlotte, NC at 10am one morning.

There were quite a few people in the Apple store at that time... while the rest of the mall was a ghost town.

This is what I could easily identify:

- a group of 7 people in the back of the store taking a class
- a husband and wife meeting with a Genius having new software installed on their Macbook
- a guy brought in his iMac and was meeting with a Genius about something to do with FCP X
- a few people having something done with their iPhones (transferring contacts from an old phone, I think)

Again... this was all at 10am... while some other stores at the mall barely had their doors open yet.

Now it's true that those people in the store that morning probably weren't buying anything new... but they did own some Apple product already. And if they get great service and support... they will buy Apple again.

To those who say most people in Apple stores are just browsing... remember that Apple Stores have the highest retail sales per square foot. So they are making sales after all.
post #40 of 54
Quote:
Originally Posted by myapplelove View Post

I always like your posts, but I like it more when you 're original and more biting. 

Zizzy often neglects to cite his sources. His originality derives from his facile copying.

 

Yogi Berra- On why he no longer went to Ruggeri's, a St. Louis restaurant: "Nobody goes there anymore. It's too crowded."

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