Apple stores having 'gravitational pull' on mall shoppers - report
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.
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.
Comments
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.
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.
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First they engineer a RDF, now Apple exerts it own gravitational forces! I'd buy stock too....
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...
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.
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?
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.
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.
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"
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.
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.
"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.
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.
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.
Gene Munster, Apple stalker.