What about Apple's Stores?

There's been lots of buzz surrounding Steve Jobs stepping down at Apple, but its not at all unexpected.  Everyone knows that Steve has health problems, and I'm sure Apple has been slowly transitioning responsibilities to Tim Cook over the past year.  Steve will remain involved as Chairman, so I''' bet he'll be involved in major decisions.  But don't forget that Ron Johnson, SVP of Retail at Apple, is also on his way out.  This could be a double-whammy for Apple's stores.

Recall that Ron was hired away from Target by Steve in 2000 to spearhead the creation of the Apple stores.  At the time, Apple had tried selling via independent dealers and large electronics chains, but neither allowed them to control the user experience.  They theory was that customers were not seeing the value of Apple's products and required a more high-touch environment.

To open a chain of stores in the shadow of Gateway's failure was a risky move, but at the time Apple needed to take risks to get back to its past glory.  The stores are unique, that's for sure.  Only half of the space is used for selling products, with a great deal of space used for training, setup, and demonstrations.  Apple's Genius Bar, EasyPay (mobile point-of-sale), and replacement of shelf tags with tablets are all industry firsts.

Jerry McDougal is Ron's heir-apparent, however, Apple has begun an executive search so make no assumptions.  Jerry previously worked for PC Connection and IBM before being hired by Ron at Apple.  We likely won't know until November, when Ron takes the CEO job at JCPenney, who the replacement will be.

Whoever gets the job will have big shoes to fill.  The Apple stores are a key conduit between Apple and its customers, so continued investment and innovation will be key to the company's growth.  As they say, when one door closes, another opens.

UPDATE: If you haven't already seen it, you should view Steve Jobs' 2005 Stanford Commencement Address.  I promise its worth the 15 minute investment in your time.

Comments:

The Apple store AVERAGE sales per square foot is $4406. Average. So even though a) so little space is used to actual selling, b) the store is loaded with personnel, and c) the price points range from little do-dad cases for $29 to the high end computers, they still out-perform companies like Tiffany.

As long as Ron Johnson's heir doesn't start cutting corners in the name of who-knows-what, the stores will continue to kill it.

I would venture to say that they've been transitioning to Tim Cook for longer than a year. And now I'm off to watch the video!

Posted by Paula Rosenblum on August 25, 2011 at 02:18 PM CDT #

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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