Apple Distribution Network Grows!
Oh wait, it's AI, so we have to lead with something that always looks like bad news for Apple.
APPLE STORES SALES FALLING!!!!!!!
Except, they're among the most SUCCESSFUL stores in the world as judged by their sales per square foot.
This is just like that article, APPLE FAILS TO KEEP FAITHFUL USERS IN THE FOLD, that got written just because Apple was GROWING its Samsung converts even faster than it is GROWING its number of loyal upgraders.
Spinning GOOD news as bad... as the Apple turns.
@zoetmb. I am in favor of Apple products being carried by other quality retail outlets (although I lament the lack of upkeep at the Apple point-of-purchase display stands at many Wal-Mart stores I have seen.) After all, the scale of the iPhone and iPad product rollout is massive and needs a vast distribution network. And Apple's worldwide carrier network is growing, but it is still perhaps only 60% as vast as, say, Samsung's.
What I DO object to at places like Best Buy or AT&T is the UNDISCLOSED fact that their salespeople may be getting extra compensation (whether it be Spiffs or commissions or whatever you want to call it doesn't matter), for surreptitiously STEERING customers to a purchase OTHER than Apple. I'm sure many times a day, the overwhelmed and confused "Uncle Fester" customer buying his first smart phone is finally going to give up after looking at all the myriad of choices in the store and ask his salesperson "which one would YOU choose?" Naturally, if that salesperson stands to make an extra $35 for especially promoting "brand X" then one could naturally assume she is going to try to strongly influence that sale. But to most consumers this bias is totally obscured. (I would love for some salesperson at one of these stores to weigh in with any thoughts about this.)
Additionally, as an Apple fan (and very small shareholder), I prefer to purchase my products at the Apple store itself, (or at Apple.com), even if the line is a bit longer because those dollars the store keeps in house, rather than splitting them with another vendor down the street. This helps subsidize features like the "free" Genius Bar and product seminars. I realize there aren't as many Apple Stores as we would like, but hopefully that franchise will be expanding, especially worldwide owing to the brilliant hiring of Angela Arendts.
@Constable Odo: No growth potential at Apple? Consider merely the natural sales upgrade potential (and indeed actual experience we have just seen), in the annual refreshes of the iPhone line (e.g., the transition from the iPhone 5 to the 5s). Probably 60% (my guess) of the introduction-related sales are coming from folks upgrading of the model 4s or earlier. (Owners of the iPhone 5 are NOT eligible for an upgrade in the US since the 5 has only been out for a year unless they want to pay a very healthy "early termination of contract" fee to their carrier.) These annual upgrade volumes will increasingly grow as the level of iPhone 5 owners is about 1.4 times more than the base of iPhone 4 and 4s owners! So next September-ish the natural, residual upgrade to the next iPhone could be staggering. (With the advent of these generous iPhone trade-in scenarios (e.g. Gazelle.com), one would be a fool to keep paying the same monthly carrier service bill and not get a (practically free, net of the trade-in), upgrade to the newest model!
zoetmb wrote: »
There's a difference between a commission and a spiff. A spiff is paid by the manufacturer and is a fixed amount. A commission is paid by the store and is usually a percentage, although the percentage can vary per product.
As for the Apple stores, while I understood the original strategy that Apple wasn't sold well in most generic retailers (like CompUSA and the like), it never made sense to me that Apple would both create a substantial retail presence using its own stores but also sell to everyone else as well. I continue to think that Apple selling into places like WalMart has hurt the Apple brand. Frankly, I don't even think they should be selling in chains like Best Buy.
However, assuming that I'm wrong, it's no surprise that with the availability of Apple products everywhere - in both physical retail and in e-commerce sites - that Apple's physical store sales are down. It's also not surprising because for the most part, recent products have been evolutionary and you don't have to see the product to make a purchasing decision, because it looks and acts pretty much like the last model, except with slightly better performance. Maybe you want to check out the latest MacBook Pro or iMac to see how thin it actually is, but since there's no choice since older models are no longer available, maybe that's not even necessary. So one can buy online or from a different dealer.
To extend (an in part disagree in part) this is that you can only have so many stores in a metro area and maintain that $6000/sqft premium. As you move into more rural and more 'working class markets' you will basically pay your 'co-opetition' to pay the freight of the sale. Yes, you're not making that last $50 of margin on your iPhone sale, but it's in the Walmart and BestBuy in Mankato MN, and the 40,000 people who visit that city every weekend from the farms and the villages about southern MN or coming to see a college game, or doing the off-the-main-drag to Sturgis run have the opportunity to try out iOS or OSX. They may not even buy it (go home and search the deals on web), but they touched it, experienced it. Even if it's evolutionary... Is the iPad Air now 'good enough' to replace my Kindle because I want a big screen but the last was too heavy. I'm not driving do Des Moines IA or Bloomington MN for that 'hand shake' but heck... I'm going to my son's soccer game in St Peter... Let's spin by River Hills Mall and take a look at the 'gadget.'
In all, Apple is not going to make every sale, in every hamlet and village on the Euphrates and where ever the sun is not yet setting on the English Emprire. This is a non-news store, only interesting in the fact that Apple it's just this reach that starts to describe Apple as a System, not as a bunch of competing divisions... And a sale lost at the Apple Store for anything other than lack of customer delight is not a sale lost at all.
regurgitatedcoprolite wrote: »
Jared, I agree completely. The local AT&T store does everything in their power to denigrate iPhones and iPads. They put ? products as far away from the front door as possible and push Samescum's angry green trashcan Scheiße. I went to this store the other day to get a look-see with the new iPad Air, and AT&T put the biggest, ugliest, heaviest anti-theft device imaginable on the back of their display units, making it impossible to get a real feel for how light iPads are. I'm surprised they don't epoxy a brick to the back.
Since Apple is at least partially responsible for the demise of the physical record store, they reap what they sow.
Wrong. When most of the physical record stores closed down, digital sales of music was less than 10% of the music being purchase. 90% of the music sales were still physical CD's when we saw their demise. If you want to blame some one, you can start by blaming big box retailers like BestBuy, Walmart, Fry's, Target and Costco. Who sold CD's at near zero margin to drive customers into their stores with the hopes of selling them other merchandise that are high margin. And then there's Amazon, (This of course after they were responsible for the demise of the physical retail book stores.) with their discounts, no tax and free shipping of CD's.