There’s an interesting article from Fortune on Apple’s incredible success at running their retail stores.
“People haven’t been willing to invest this much time and money or engineering in a store before,” says the Apple CEO, his feet propped on Apple’s boardroom table in Cupertino. “It’s not important if the customer knows that. They just feel it. They feel something’s a little different.”
And not just the architecture. Saks, whose flagship is down the street, generates sales of $362 per square foot a year. Best Buy (Charts) stores turn $930 – tops for electronics retailers – while Tiffany & Co. (Charts) takes in $2,666. Audrey Hepburn liked Tiffany’s for breakfast. But at $4,032, Apple is eating everyone’s lunch.
That astonishing number, from a Sanford C. Bernstein report, is merely the average of Apple’s 174 stores, which attract 13,800 visitors a week. (The Fifth Avenue store averages 50,000-plus.) In 2004, Apple reached $1 billion in annual sales faster than any retailer in history; last year, sales reached $1 billion a quarter. And now comes the next, if not must-have, then must-see, product.
“Our stores were conceived and built for this moment in time – to roll out iPhone,” says Jobs, summoning one to the table with a tantalizing I’ve-got-the-future-in-my-pocket twinkle. If sales are anywhere near expectations – Apple (Charts) hopes to move ten million iPhones in 2008 – the typical Apple Store could be selling, in absolute terms, as much as a Best Buy, and with just a fraction of the selling space.