Steve Jobs is serving up a little crow to all naysayers that said Apple stores would go the way of the Mauritius dodo bird...


Today's Wall Street Journal contained an article titled "How Apple's Store Strategy Beat the Odds." It seems that Apple is enjoying phenomenal success in opening high-end retail stores in malls and other high-traffic areas across the United States. According to the article, Apple says the stores have been profitable for several years, providing $151 million in operating income in 2005.

This of course, is in stark contrast to Gateway's failed attempt at creating something similar through its Gateway Country stores–in 2004 Gateway closed 188 company-run retail stores.

To be fair, Gateway was first with a national roll out of manufacturer-led stores featuring computers, accessories and educational classes. Gateway experienced the growing pains associated with early adoption including getting store layout right, and effective merchandising. However, it's also pretty clear that Mr. Jobs learned a thing or two from Gateway's mistakes.

With a new store about to open on Fifth Avenue, across from Central Park in New York City, Apple can teach us a few lessons.

First and foremost, and typical of Apple, Mr. Jobs has made sure that those entering the Apple store get the "Apple Experience." That means the stores are open, airy and the interior design is simple. Products are featured with minimalist interpretation and without clunky merchandising displays. And sales people know the product features and can competently articulate product benefits.

Design is also a key component of the Apple Stores. In fact, for the Fifth Avenue store, "all that is visible from the street is the entrance, surrounded by roughly three-story-high glass cube jutting from the ground, reminiscent of I.M. Pei's glass pyramid at the entrance to the Louvre museum in Paris."

Gateway Country stores had computers, classes, accessories, plasma screen TV's and were also well merchandised. However, very few Gateway Country stores received press attention, much less people lined up around the block for grand openings. What gives?

I think the key lesson for marketers can be summed up in one word: cachet. At all times, Mr. Jobs endeavors to give us something unique, distinct and authentic. The iPod, for example, can be customized and personalized with our own music and TV shows. And within each Apple store, Mr. Jobs has designed a stunning glass staircase with the effect in mind to get people to walk up to the second floor and see more merchandise.

As a customer, you'll be engulfed by all aspects of the Apple experience. And that's just the way Mr. Jobs wants it.

Back in 2001, former Apple CFO, Joseph Graziano griped, "Apple's problem is it still believes the way to grow is serving caviar in a world that seems pretty content with cheese and crackers."

Forget the cheese and crackers Mr. Graziano. I think crow pâté might be in order.

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ABOUT THE AUTHOR
Paul Barsch directs services marketing programs for Teradata, the world's largest data warehousing and analytics company. Previously, Paul was marketing director for HP Enterprise Services $1.3 billion healthcare industry and a senior marketing manager at global consultancy, BearingPoint. Paul is a senior contributor to MarketingProfs, a frequent columnist for MarketingProfs DailyFix, and has published over fifteen articles in marketing, management, technology and healthcare publications. Paul earned his Bachelors of Science in Business Administration from California Polytechnic State University, San Luis Obispo. He and his family reside in San Diego, CA.