A Blog by Jonathan Low


Sep 7, 2016

What If Apple's Next Big Announcement Was About Customer Experience Not A New iPhone?

For a company with a premium brand sold at premium prices, the experience is as much a part of the sale as the product. JL

Scott Davis comments in Forbes:

Without having as many must-see, must-have products, heart-pounding advertising or pent-up demand, the Apple Store is in danger of becoming just that, a store. And Apple knows it. As Apple tries to meet the increasingly high expectations consumers have, its secret weapon is not the iPhone 7, it is the retail spaces it owns and the 60,000-plus store employees it engages.
Right about now, speculation for Apple’s big September announcement starts to ramp up. What new products will it introduce? Those in the know (though with Apple, no one really is) are predicting a slimmer, more water resistant iPhone 7 with an improved camera and no headphone jack. iOS 10 is probably coming, as well as a new and improved Siri—will she talk to Alexa? And there are expectations for the usual software upgrades to Apple TV, Apple Watch and iPad.
However, the launch that I am most excited about is not the one that will be talked about at the big, splashy show in Cupertino. It will not make headlines, nor stoke the imagination of Apple-geeks around the world. In fact, CNET and Tech Crunch may even miss reporting it.
It’s the news that fans of Angela Ahrendts have been waiting for ever since she joined Apple in 2014, after making her mark at Burberry during an eight-year run. Apple wants to bring back the romance and allure of spending a Friday evening at an Apple Store trying out the new, cool stuff. Historically, experience has been an integral part of the Apple brand, and has been a major driver of the Apple fanaticism for years.
Yet, Apple realized it needed to keep its relationship with consumers fresh. Without having as many must-see, must-have products, heart-pounding advertising or pent-up demand, the Apple Store is in danger of becoming just that, a store. And Apple knows it. That is why they brought in Ahrendts, to provide laser focus on the store and employee experience.
So, when Apple made a small, almost unnoticeable announcement last week that it is removing the descriptor “store” from every one of its 400-plus retail locations, it was easy to overlook. But, in fact, it may be the biggest Apple news of the year.
It’s a change that started rolling out with the launch of newer Apple Stores, like the Union Square location in San Francisco. Near where I live in Chicago, Apple North Michigan Avenue, not the Apple Store on Michigan Avenue, is now where I go to for my Apple products, experience or plain old fix.
Do not underestimate this small move. As Apple continues to fend off top competitors, and tries to meet the increasingly high expectations consumers have when it comes to experience, its secret weapon is not the iPhone 7, It is the retail spaces it owns and the 60,000-plus store employees it engages.
Ahrendts recently stated: “We don’t really need to open more stores, but we need to open incredible places that almost behave like a town square, like a gathering place…we want you to meet people at Apple…and see what’s happening.” This makes sense. Ahrendts wants to steal a page from the playbooks of Starbucks or REI or even State Farm’s Next Door Café. It wants to become a place for friends to meet up, hang out, or plan as an event. It’s a good strategy, especially when you consider that 400 million people visit Apple’s stores annually, which is triple the amount of annual Disney visitors, yet only 1% of visitors end up making a purchase.  According to research company eMarketer, Apple’s stores generated sales of $5,009 per square foot in the 12 months leading up to May 2015, more than any other brand in the U.S., including Tiffany & Co. and Restoration Hardware. Imagine the impact if that number increased by just one additional percentage point.
Of course, the products Apple places in the stores are important, but the consumer experience may be even more so. And store employees play a vital role in that experience. Ahrendts said: “I don’t see them as retail employees. I see them as executives in the company who are touching the customers with the products that Jony [Ive] and the team took years to build. Somebody has to deliver it to the customer in a wonderful way.” Understanding the important part employees play in the customer experience, and treating them as such has led Apple to end 2015 with a retention rate of 81%, the highest it has ever had for its retail store workers. Ahrendts went on to say that shortly after she joined the company and got immersed in the “Apple way”, everything became clear: “I now know why this is one of the most successful companies on the planet: Because the culture is so strong. The pride, the protection, the values. The company was built to change people’s lives. That foundation, that service mentality, that drive to continue to change lives—that is a core value in the company.”
Apple made another small announcement last month, which was also tied to the retail experience. It created three new employee positions at its stores, one of which is a Technical Expert, described as: “An all-new customer support position in between Technical Specialist and Genius. These employees will be able to provide mobile repairs, a task previously limited to Geniuses, and troubleshooting for software and products like the Apple Watch and Apple TV. The position will help reduce Genius Bar/Grove and service wait times.” Wow, talk about removing a customer pain point – one of only a few that Apple actually has! This is another great example of how Apple works to continually improve the in-store experience for consumers.
The next move for Ahrendts and leadership is to figure out what becoming a “gathering place or town square” really means. What role will music play? Will social events be planned? Kid events? How about guest appearances by product designers or celebrity Apple addicts? The bottom line is Apple has declared the experience is going to change and get even better. It has doubled-down on its commitment to both consumers and employees, smartly remembering that a passionate employee base is the greatest secret weapon in delivering a superior experience. Now it just needs to prove that hanging out at Apple is a cool way to spend your Friday night. And there is no way news of an earbud-less phone can trump that!


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