Apple is not just a giant of technology, it has also grown into one of the biggest American retailers, with more than 500 stores across five continents. But the shine of its signature stores has dimmed, and the shops are facing a pivotal moment – even before Apple announced this week that its retail chief will soon depart.
Industry analysts say the same product woes and slowed upgrade cycle that have led to Apple’s declining sales are reflected in the waning perception of the stores themselves – with a focus on iterations of marquee products that no longer dazzle and lack immersive, loyalty-inspiring experiences.
After five years of leading Apple’s retail efforts, Angela Ahrendts is departing “for new personal and professional pursuits,” the company said in a news release Tuesday. When Apple hired Ahrendts away from the luxury fashion company Burberry in 2014, it highlighted just how important its stores had become. Ahrendts is one of five women in top leadership positions at the company, and an executive who some saw as a potential successor to CEO Tim Cook. Once Ahrendt leaves in April, Apple’s head of HR, Deirdre O’Brien, will take over the management of its retail and online stores, in addition to overseeing the company’s people and recruitment.
Apple declined to comment for this story.
Part of Ahrendts’ mission was to transform the consumer experience of visiting an Apple store, which remains a huge driver of sales and a potent marketing vehicle for users to feel as though they are a part of a premium brand, said Daniel Ives, an analyst at Wedbush Securities. But recent product launches and store events have been underwhelming, he said, mirroring the company’s overall challenge of offering customers innovative gadgets when the bar has already been set quite high.
“The last few years have really been void of the lines around the store, sleeping at the store, waiting for the product,” he said. “Part of it is that customers have gotten used to the Apple Store – there is no longer the wow factor.”
While the role of Apple’s physical presence has evolved as online sales have become a larger component of connecting with customers, getting people into the stores remains a key target for Apple, Ives said, especially in foreign markets such as India and China.
“Apple has beautiful products, but that’s all you see,” said Ross Gerber, president and CEO of Gerber Kawasaki, a wealth and investment management firm based in Santa Monica, California. “Do I really need five tables of the same watch and every different band?”
Gerber pointed to Apple’s growing services business – which includes iCloud, Apple Music, and Apple Pay – and questioned why more of its stores are not dedicated to immersive experiences and converting Apple’s massive 900 million iPhone users into monthly subscribers.
In its latest earnings report, Apple said its online and retail stores are generating strong sales for the Mac and iPad, are posting record figures in the number of iPhones being traded in for newer models and are driving substantial growth in paid digital services. On a call with investors, Apple noted its first store opening in Thailand and Paris. (Apple said its revenue fell 5 percent from last year, owing in part to people keeping their iPhones longer and to a slowdown in China’s economy.)
Apple is also reportedly launching its new video streaming service this spring.
“If Apple is going to sell music, video, podcasts, this should be a part of the store experience,” Gerber said.
Ahrendts faced criticism after she announced in 2017 that Apple stores would be reimagined as “town squares.” The Atlantic’s Alexis Madrigal observed that Apple – following Facebook and Twitter – had adopted the faux language of civic life and democracy, despite the obvious fact that Apple stores are explicitly private spaces. Apple’s misguided approach, he argued, was part of a broader problem in the internet era: people shouldn’t view tech giants as building community or serving liberal democracy or making people’s voices heard, because they are fundamentally business entities.
In more concrete terms, Apple customers have also complained about the service in the stores. Gerber said a more successful approach would shift the stores away from “check in here and go stand over there” to a more customer-oriented experience, with revamped management, product assistance, video and music installations, and in-store flow.
© The Washington Post 2019