Apple Stores RM

Topics: Apple Store, Retailing, Apple Inc. Pages: 41 (6497 words) Published: December 6, 2014
9-502-063
REV: MAY 20, 2010

LUC WATHIEU

Apple Stores
Ron Johnson (HBS ’84), Apple Computer’s Senior Vice-President of Retail, never missed a chance to show a customer through the nearest Apple Store. A former Vice-President of Merchandising at Target (a leading department store chain), Johnson joined Apple in January 2000 with the mission to oversee the creation of the company’s own stores. The first store opened in May 2001—and just seven months later, 27 identical stores had been opened across the United States. During his store visits, Johnson tried computer applications, listened to a store employee make a presentation in front of the 10-foot screen at the rear of the store in “the theater,” and respectfully introduced his guests to the local “genius,” the official title of a very knowledgeable employee who stood behind a “bar” (complete with stools and water bottles) and helped solve consumer problems. Every detail of the store experience had been carefully designed, and as much as Johnson enjoyed each tour, he was also checking that all the store’s elements were perfectly under control. “The store experience has to be the same every day, every hour, in every store. We care passionately about that,” he often said.

The stores were expanding to new territories, mostly in high traffic shopping malls, with the explicit purpose of “enriching people’s lives” and converting new customers to Apple products. To complete that mission successfully, Johnson’s focus was on choosing the right locations, selecting and training knowledgeable and dedicated employees, and defining the most effective utilization of the innovative store elements such as the theater and the genius bar. On each of these three fronts, Johnson felt fortunate that he was endowed with unique gifts: a store concept that shopping mall owners found very attractive; a large base of loyal Apple users who found working in an Apple store a dream; and store elements that could provoke consumer involvement. However, using these gifts diligently, without wasting them, required constant reflection on what the stores were all about. A second important challenge for Johnson was to determine the best ways to evaluate the success of the stores. Traffic was high (a total of 800,000 visitors across all stores in December 2001), and sales were gaining momentum ($48 million in total sales over the quarter ending in December 2001). However, store traffic and sales were only surface indicators of the stores’ intended effects. A deeper understanding of the dynamic impact of the stores on consumer behavior would help Johnson and his team to monitor progress more adequately.

On that sunny afternoon of January 2002, Ron Johnson was returning to his office after a quick visit to the Palo Alto, California store, where he had met an alert 90-year-old man who had never ________________________________________________________________________________________________________________ Professor Luc Wathieu and Research Associate Kevin Morris prepared this case. HBS cases are developed solely as the basis for class discussion. Cases are not intended to serve as endorsements, sources of primary data, or illustrations of effective or ineffective management. Copyright © 2002, 2010 President and Fellows of Harvard College. To order copies or request permission to reproduce materials, call 1-800-5457685, write Harvard Business School Publishing, Boston, MA 02163, or go to http://www.hbsp.harvard.edu. No part of this publication may be reproduced, stored in a retrieval system, used in a spreadsheet, or transmitted in any form or by any means—electronic, mechanical, photocopying, recording, or otherwise—without the permission of Harvard Business School.

This document is authorized for use only in Retail Management by Prof. Vinod Acanta at NMIMS from June 2014 to December 2014.

502-063

Apple Stores

owned a computer. Johnson decided it was time to sit down and reflect on the nature...
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