The Apple Store business model is broken

Here’s what’s wrong…and how Apple can fix it.

This past week I took my 73 year-old father to the Apple Store in the Cincinnati area with the intent of purchasing at least one (and probably two) items. My dad was in the market for a new iPhone and a new laptop. 

We arrived twenty minutes before the store opened. A young Apple Store associate entered our information in a tablet before the store opened. (Like the government in Logan’s Run, Apple Stores seem to eliminate every member of their band over the age of thirty. I have never been waited on there by anyone much beyond that age.) 

Great! I thought. This is going to be fast! Whiz-bang efficiency!

But I was wrong. It wasn’t fast. 

To make a long story short, we spent 90 minutes waiting around the store. We stood. We paced. We looked at the few items that you can view without the help of a sales associate. (And there aren’t many of those.)

And then, finally, we gave up. We left without buying anything. At the time of our departure, we were told that we would be waited on in…about twenty minutes.

That was probably an optimistic assessment. I think it would have been more like an hour: There were around two dozen other customers waiting around for service, just like us. 

I saw several of them walk out in frustration, too.

Apple: great products, sucky retailing

I am a ten-year member of the Cult of Mac. 

I personally haven’t used anything but Apple products since 2010, when a final malware infection of my Dell PC, loaded with Windows XP, convinced me that enough was enough.  

So I bought an iMac. The rest, as they say, is history. Since then, I’ve owned two iMacs, two MacBooks, four iPods, and three iPhones. 

I’ve become an evangelist for Apple products. I’ve converted not only both my parents, but at least two or three of my friends. 

Apple products really are something special. But boy, those Apple Stores sure do suck.

And I’m not the only one who feels this way.

Widespread complaints

A May 2019 article in the LA Times is entitled, “How the Apple Store has fallen from grace”. Focusing on an Apple Store in Columbus, Ohio, the article could have been written about my recent visit to the Apple Store in Cincinnati: 

Web Smith’s recent experience at his local Apple store in the suburbs of Columbus, Ohio, has been an exercise in frustration.

There was the time he visited the Easton Town Center location to buy a laptop for his 11-year-old daughter and spent almost 20 minutes getting an employee to accept his credit card. In January, Smith was buying a monitor and kept asking store workers to check him out, but they couldn’t because they were Apple “Geniuses” handling tech support and not sales.

“It took me forever to get someone to sell me the product,” said Smith, who runs 2PM Inc., an e-commerce research and consulting firm. “It’s become harder to buy something, even when the place isn’t busy. Buying a product there used to be a revered thing. Now you don’t want to bother with the inconvenience.”

There are many similar stories in the media of late, as well as customer complaints on social media. 

Cult of Mac members still largely love their iMacs, MacBooks, iPhones, iPods, and Apple Watches. But they increasingly dread the next trip to the Apple Store.

So what went wrong? And what needs to be done? 

An obsolete concept of the pre-iPhone era

The first Apple Stores debuted in May 2001—going on twenty years ago. Back then, they showcased only the computers, which had a minuscule market share at the time, compared to PCs made by Dell and Gateway. 

iPods were added in October 2001, but these, too, were specialty products when they debuted. For geeks only. 

The real tipping point was the introduction of the iPhone in 2007, and the subsequent ubiquity of smartphones. 

In 2001, a relatively small percentage of the population owned an iMac or a MacBook. In 2019, 40% of us own iPhones. The iPhone is a mass-market product. But it’s still being retailed as if it were a specialty item.

And when you visit an Apple Store in 2019, you’ll find that 70% of the traffic to these upscale boutiques is iPhone-related. Many are there for routine password resets. 

This is traffic that was never imagined or accounted for in 2001, when the Apple Store concept was launched.

Zen over function

Apple Stores don’t look like ordinary electronics retails stores. Steve Jobs was a devotee of eastern Zen practices, and the Apple Store resembles a Japanese bonsai garden. There is an emphasis on minimalism, and lots of blank space. 

The downside of that is that you can’t do much to serve yourself, as you could in a Best Buy or a Walmart. 

You basically walk into the store, and an employee puts you into an electronic queue. Then you wait around. 

But you have a very clean, zen setting in which to wait. 

Uncomfortable stores

Speaking of those long waits….

Apple Stores do look nice. But they are not comfortable places to spend an hour waiting for a salesperson. Which is almost inevitable. 

There are few stools, and it’s clear that the stools were selected for their  sleekness, not their comfort. 

There aren’t any plush bean bags or sofas to sit on. Heavens no! That would detract from the zen.

Inefficient use of staff

Too many Apple Store employees are exclusively dedicated to crowd control—to herding you into virtual line. 

This is because you can’t serve yourself in an Apple Store. Go into a Best Buy, and there are clearly defined areas for looking at computers, at cell phones, at peripherals. There’s a line for service in every Best Buy. A line for returns. 

Normal retail, in other words. 

There are no clearly defined areas within the Apple Store. Customers are all milling about, most of them doing nothing but waiting to be attended on. 

Many of these customers are frustrated and growing impatient. They want to know how much longer they’ll have to wait. This means that at any given moment, at least a quarter of the Apple Store employees you see on the floor are directing this vast cattle drive. 

They aren’t selling any products, they aren’t helping any customers. They’re just managing the virtual line. 

That amounts to a big waste of the Apple Store’s manpower—and of the customers’ time.

Decline of staff quality

Apple stores were once staffed by highly knowledgeable sales personnel. That was in the days when the stores only carried computers, and hiring was very selective.

Those days are gone. Now that it’s all about selling a gazillion iPhones, Apple Store employees are no longer specialists. Despite the pretentious name “Genius Bar”, geniuses are in short supply on the sales floor nowadays. You’re going to be served by run-of-the-mill retail sales staff. And their expertise, helpfulness, and attitudes vary greatly.

Not enough stores

There are about a dozen AT&T stores within a twenty-minute drive of my house in suburban Cincinnati.

Guess how many Apple Store there are…

One. In the Cincinnati area, we are served by a single Apple Store at the Kenwood Towne Centre.

And for those readers in Los Angeles and New York, who maybe think that Cincinnati is a one-horse cow town: There are 2.1 million people in the Greater Cincinnati area. It’s the 29th largest metropolitan area in the United States. 

And we have one Apple Store.

There are only eight Apple Stores in all of Ohio, and a total population of 11 million. That means one Apple Store for every 1,375,000 Ohioans. 

But it could be worse: There are only three Apple Stores in the entire state of Wisconsin. Kentucky has only one Apple Store.

But there are only twenty-two Apple Stores in the entire State of New York. AT&T has more retail locations than that just in Cincinnati. 

No wonder the stores are packed. I made my aforementioned trip to the Kenwood Towne Center Apple Store with my dad on a Friday. Granted, Friday is typically a busier retail day than Tuesday, Wednesday, or Thursday. But this was during the middle of October—not exactly a peak shopping season. The back-to-school rush is already over. The Christmas shopping blitz won’t begin for another six weeks. 

And at 9:40 in the morning—twenty minutes before opening time—there was already a crowd outside the Apple Store.

The Apple Store needs to be refocused on function rather than branding

As an Apple employee quoted by the LA Times notes, Apple Stores are “mostly an exercise in branding and no longer do a good job serving mission shoppers”.

The “mission shopper” is the shopper who goes into the store with a specific purchase in mind (versus someone who is still torn between a Mac and a PC, or an iPhone and an Android). 

These are customers who could largely serve themselves. If only that were possible. But due to the philosophy of the Apple Store, there is minimal “clutter” at these boutique shops. In other words, these are retail shops with minimal merchandise on display. 

Apple Stores need to become more like Best Buys: There should be clearly defined areas for looking at each category of merchandise, and clearly defined areas to wait for technical support. 

As I mentioned above, most of the traffic in the Apple Store seems to involve iPhone support. The iPhone customers definitely need their own area of the store. 

This probably means abandoning the whole boutique concept. At present, Apple Stores are small but mostly empty spaces in high-rent locations. That is, again, all very zen and cool-looking. But it doesn’t happen  to be a great way to purchase a new MacBook, or to get your iPhone unlocked when you’ve forgotten the passcode.

A broken model in terminal need of repair

 The Apple Store might have been a workable retail model in the pre-iPhone era, when Mac devotees really were an exclusive tribe. The Apple geeks of 2001, with their tattoos and soul patches, may have appreciated the gleaming but empty Apple Stores. 

But the Apple customer base has changed and expanded since 2001. When you factor in iPhones, Apple is now a mass-market brand. (And Apple now owns 13% of the home computer market.)

 Having become a mass-market brand, Apple needs to adopt the more efficient practices of a mass-market brand. 

That means dropping the boutique pretentiousness that makes Apple Stores great places to photograph, but horrible places to buy stuff. The hoi polloi of 2019 are not the rarified Apple geeks of 2001. 

We don’t want or need a zen experience. We just want to get quickly in and out of the Apple Store with minimal delays, like we can at every other retail shop.

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