What I Learned Building the Apple Store | Hacker News Reader

What I Learned Building the Apple Store

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106 pointstilt56 comments

"...how do you explain the fact that people flock to the stores to buy Apple products at full price when Wal-Mart, Best-Buy, and Target carry most of them, often discounted in various ways, and Amazon carries them all — and doesn't charge sales tax!"

I don't mean to take anything away from Ron Johnson (how could I, who am I?), but I'd like to take a crack at answering this rhetorical question.

Apple's retail presence is unique for many reasons, but a big part of its uniqueness stems from the fact that they are the only computer retailer that has their own stores. The key point there is that you're going to buy a computer at a store owned and operated by the company that made the computer. That is entirely unique in the world of computing, and I'd speculate that there is a significant incentive present here.

When you buy something from Best Buy, Wal-Mart, Target, etc, you're dealing with a retailer whose primary interest is in keeping he customer just happy enough to come back and shop with them again. If they can find a way to pawn the customer off on the vendor, they will. It's in their interest to do so.

Every customer knows this game: You bring a product back to a retailer. The retailer tells you that you must talk to the manufacturer. You call the manufacturer, and they explain that the retailer should just accept the item as a return and give you another one... or some similar explanation.

The point is that the customer ends up bearing the burden of managing this process. What a pain in the ass! I bought this thing and I just want it to work. I want to talk to someone familiar with the product. I want to talk to someone who actually cares about my feelings about the product.

The astute reader will note that each of the typical gripes above are solved by the Apple store formula because the employees are beholden to Apple, who is also the product manufacturer. They are the final stop on the responsibility train. No one else to talk to. Retail panacea!

Consumers know this. I know more than one person who are long time Apple fans, and they'll all tell you the same thing: buy from the Apple store directly instead of a reseller because they'll take better care of you.

Gateway used to have their own stores, Sony has their own stores, I don't think the uniqueness of Apple comes from simply cutting out the middleman.

I went to a gateway store. It was a pretty bad experience. The machines were locked down and you couldn't use them. The sales people were the same kind you'd find at CompUSA (unknowledgable and myth spreading).

Sony is a little better, as they at least try to put some interesting design into their stores.

I'm curious, what do you mean by "myth spreading"?

* "Without this third party package there is a high chance of getting a virus or getting hacked"

* "More expensive HDMI cables produce a better quality image"

* "Higher megapixel cameras produce higher quality pictures"

Etc. Those are the ones I came up with off the top of my head that I was personally enlightened with at one point or another.

Yeah, I almost feel compelled to follow any salesperson I see at one of those stores who's helping an affable but uninformed person just so that I can correct all the false statements they're told after the salesperson goes away. It's amazing to me that people hire most of those people to represent their stores and companies. Most big box retail electronics stores are really shoddy shopping experiences.

And Bang & Olufsen

You're absolutely right about the pawn-the-customer-off-on-the-vendor aspect of retail.

Further, not only is the Apple store the final stop in the responsibility train, Apple does a fantastic job of handling this.

I've recently had to deal with a QC issue with my macbook. I travel full time, around the world. I bought the macbook on one continent, took it into an Apple store in another to get it repaired, they examined it and had it back to me in 30 minutes. They replaced one of the parts, but told me that another needed to be replaced as well. Due to visa issues I couldn't leave it with them (as they didn't have the part in at the moment) and left.

Months later on a completely different continent, I walked into an Apple store, and handed them my computer. They were aware of everything that happened at the other store, and did the repair at that location.

Not only did I not have to wait for my computer to be sent off somewhere to be repaired by some questionable vendor (which is the norm with a lot of Apple's competitors), but they did it on the spot, even though I'd bought the computer in a different country!

The Apple store is not only the best support experience going, its also global and homogenous. If I got to tokyo, I know I won't have have any problems because I'm from the US and my computer was bought in europe.

I completely agree with your analysis, but it only holds in countries where there is an official Apple store (vs. distributors, who at least in one location that I know of, provide a bad customer service)

The system also works well at Apple Authorized shops - I've had my stuff bought abroad repaired at a Swedish retail store that's not owned by Apple but has the "Authorized" sticker, and all that history showed up perfectly on my Support Profile (https://supportprofile.apple.com/MySupportProfile.do)

Anyway wasn't the point of the parent that Apple stores work because they're run by Apple and sell Apple products. Your point that stores not run by Apple don't work as well just reinforces what he says.

I brought my MacBook in the other day because an iTunes upgrade broke it. Didn't have an appt. so I just walked up to the bar. In a few minutes, a guy was helping me. Tried a few things, ran some diagnostics for about 15-20 minutes. Finally found the culprit.

I asked him how much I owed (I don't have AppleCare). "Nothing." Awesome.

Your answer only tackles one part of the problem, and a very narrow part of it, too. If you want to return an Apple product that you bought at Best Buy, for example, it's true that you have to go back to Best Buy. But it's a process that's just as painless (or painful depending on your perspective) as doing the same at an Apple Store.

However, the case isn't true if you need to have a repair made. If you purchased a Dell computer at Best Buy, the retailer would obviously redirect you to the manufacturer. But if you purchased an Apple computer at Best Buy, you can definitely take it into an Apple Store to have it diagnosed and repaired.

You said, "I bought this thing and I just want it to work. I want to talk to someone familiar with the product. I want to talk to someone who actually cares about my feelings about the product."

You can buy an Apple product at Best Buy, Target or Wal-Mart and take it right into an Apple Store to have it serviced, so the argument that you're better off buying something at an Apple Store because they'll take care of you isn't a very good one. I bought my MacBook Air from Best Buy, and when I had a problem with the display, I took it to the Genius Bar at an Apple Store and it was fixed in a matter of minutes.

There are four key components that every business must have to succeed:

1. Products (more products are better up to a point) 2. Sales + Marketing (more sales are better) 3. Efficient Distribution (less cost is better) 4. Research + Development (leading to more value and higher prices)

The genius of Apple is that they've put together three more or less separate companies into a totally integrated system.

Apple USA handles points 2 and 4. Apple Foxconn handles point 1. Apple Global Retail + Online handles point 3.

Apple 1.0 originally struggled with distribution since they had to compete with all other manufacturers for shelf space.

The return of Jobs led to Apple 2.0 and the creation of their OWN distribution channels. (Note: this only applies to their bigger markets, in the smaller markets it's more efficient for them to NOT have official Apple stores.)

Their position in the market is, for the time being, unassailable given that:

1. Their giant stockpile of money and established supply chains gives then unbeatable efficiencies. 2. They have top design/marketing/sales and R&D talent and massive IP protection. 3. They have an ever growing list of retail stores to distribute their products 4. They have some degree of consumer lock-in via their app stores.

The only way they can lose, at the moment, is if they stop coming out with innovative products.

Other tech companies have retail stores such as Sony. But they are a business/engineering firm with an endless list of products. They've got something like 16 46" TV models alone. Their retail outlets can't possibly house their entire product line, making them extremely inefficient.

Japanese companies are also fond of purpose built single-use type devices that are poorly integrated together, rather than generic multi-purpose computing devices like Apple.

Sony should really throw away 80% of their product line and keep only the highest selling gadgets, then hire some new marketing and r&d talent to start building better things that people actually want. Otherwise they are toast.

This whole 'you bought it from us but when something goes wrong, you have to talk to the manufacturer' thing really threw me when I first moved to North America from Australia.

Now unless things have drastically changed in the last 6 or 7 years since I moved, the big difference I saw was that back there, you deal with the place you bought it from. In fact, I was under the impression that it was illegal to palm you off to the manufacturer.

As my PC wholesaler used to say: "they are your customer, not ours... you are our customer". That is to say, if our customer had a problem, we dealt with it. If there was a problem with the hardware, then we deal with our wholesaler and they deal with theirs if need be.

Of course all the big electronics companies had support lines and so on, but yeah, I always used to take things back to where I bought them and why wouldn't I? There's a reason I gave you my custom in the first place!

In NA the retailer is only, legally, involved up to the first 30 days. After that the manufacturer warranty takes over, which can be anywhere from 90 days to 5 years depending on the device.

30 days, some items can be less and some stores (Costco) can have a longer return/exchange period.

Thanks for the clarification on that. It's kind of funny, as I haven't really paid much attention to that side of things as (1) I haven't had anything fail within 30 days... yet; and (2) I would have just assumed that they were trying to make out like they were being helpful about it, if that makes sense. Put another way, I would have assumed that it was easier to just go straight to the manufacturer anyway, despite how painful that can be.

It's a loophole in the consumer protection system. Basically you can return any item for any reason in the first 30 days, including failure, and the store can't refuse it (some exceptions apply). If you're dealing with the manufacturer your purchase can be out for repair for weeks if not months. So from a customer view it makes sense to return it to the store.

That makes sense, then. So yeah, the long wait is actually something that I'm dreading first time I actually have to send something off...

Thanks again!

I'm covered under the same Apple warranty if I buy from Best Buy or the Apple store. From anecdotal experience people buy from the Apple store because they don't know that it's the same.

Are you assuming Apple has a hidden policy to treat customers who purchase from the Apple store differently?

IMHO customers either don't know non-Apple stores sell Apple products or they don't know that AppleCare is included if you purchase your $apple_product from $authorized_retailer.

AppleCare is a separate product [1]. All Apple products come with a standard warranty, regardless of where you purchase them, but AppleCare is different. Regardless, it's available provided you buy through an authorized retailer. Although, when you buy somewhere like Best Buy, there's a good chance that the blue shirt at the register will try to sell you their Best Buy extended warranty instead, which (IMO) would be a mistake.

The differences I'm referring to are the "human error" elements. I typically know what I'm buying, so I don't run in to these issues, but I know, also anecdotally, people who have both been taken great care of at an Apple store after they made a mistake in their purchase, and people who have been burned by buying third party.

A quick example. A friend bought a white MacBook at the Apple store. He explicitly asked for the newer model with the faster processor and 802.11n capable wireless chipset. Months later (literally 4 months) when attempting to apply the wireless N update, it became clear that he did not get the updated model. The clerk mistakenly brought him a unit with an upgraded hard drive, but of the older model. After an appeal at the Apple store, they swapped out the MacBook for a brand new one with very little haggling.

I also know someone who bought a mirror-front PowerMac (yes, this is an old example) through an authorized reseller. This was back when OS X was fairly new. He was unaware that he could not install OS 9 on it, which he needed for his publishing business. When he went to Apple, they explained that had he purchased the computer directly from them, they would exchange it, but that he would have to work with the retailer.

Both of these examples wen't Apple's fault. Quite the opposite, both were the result of carelessness by the purchaser. The point is that when you buy from Apple, the extra $50-$100 buys you a little insurance. I've also run in to cases where the Apple Store staff share some information that I may not have learned from someone at a third-party retailer. These little things have value to many consumers. Not everyone eats and breaths Apple.

http://www.apple.com/support/products/

"This was back when OS X was fairly new. He was unaware that he could not install OS 9 on it, which he needed for his publishing business."

It was only in January 2003 that Mac OS X only machines began shipping.

And that was about the time that Mirror-Doored (also referred to as Windtunnel) Macs started to ship.

No, only the FW800 version could not boot Mac OS 9.

One aspect of the experience in the Apple Store that Johnson doesn't mention is that all the gadgets there are powered up and you can play with them. I've never understood how cell phone stores and electronics retailers who almost invariably have dummy units out on display expect to sell anything to a casual buyer. This especially goes for Windows Phone 7; people who use it seem to love it, but it doesn't have much iPhone style mindshare so it seems like it NEEDS to be out there to fiddle with. But I've only seen dummy units in stores.

And an important part of this is that they pay extra care to the anti-theft systems so that they don't get in the way and stop you from using the products normally.

Many times I've seen cell phones where the anti-theft system was so bulky that you couldn't open it or close it completely, or access the keypad easily.

The good shops still have at least a few demo units, and if not you can ask someone who works there to bring out a real device to try out.

I'm not saying that's a good way to do it but it is at least possible to try them out, if you're determined. For the casual buyer having to ask to try it out is a barrier, and for those just looking it's probably a deterrent.

Which may be why Microsoft is getting into the retail biz.

i went to best buy the other day and strangely, the two iphones (at their own booth in the cellphone department) were tethered but completely functional. just about every other android phone was tethered the same way but had a dummy screen.

i can't imagine that the vendors requested that the units be fake (why would you not want a working demo?) so it must be best buy that did this. yet the iphones were more expensive and possibly fragile than any of the other android phones there and they were real.

Maybe it's a condition of being an authorized retailer of Apple products - certainly wouldn't surprise me.

That seems like a dramatic step backwards. I remember going into a Sprint store a few years ago to test their phones. All of them could power up, all of them were active and you could test the internet, make calls, send SMS, etc. Granted this store was in a pretty posh town but I assumed all of them were like that. Now 10 years ago when they had those stupid weighted dummies, that was ridiculous.

One of the biggest reinventions I've noticed is the elimination of cash registers in the Apple Stores. Walk up to almost any employee and they can check you out with their handheld computer. That is a huge plus from a customer experience point of view.

The Apple Store down the street from me has cash registers. I think they only do the iPhone checkout thing when you do a large purchase.

My experience standing in line at an Apple Store has been very bad. Perhaps worse than any retail store I can recall. By not having a clear line the customer is left confused. What am I supposed to do if I want to buy a mouse? If the store's not busy you're set. If it is busy you have to try and grab an employee, who's undoubtedly busy helping another customer already. Then they tell you to stand in the line. Except that the front cash register area is both a cash register and a work station. So you might be standing in line and the two people in front of you are getting repairs. So you wait 15 minutes to buy a mouse.

A busy Apple Store feels like a DMV to me. There are numerous customers standing around waiting to be helped, but there is no clear way to get a ticket, as there at least is at a DMV.

I'm not sure how it works yet but the newest version of the App Store app on your phone allows you to actually check youself out - no blue shirt needed.

Not sure how they prevent theft yet though, I haven't yet used it.

I used that feature last week and it's quite amazing. Like you, I'd be worried about theft though.

I literally walked into the Apple Store, to the back, grabbed a Bumper off the wall, opened the Apple Store app on my phone, scanned the Bumper UPC, paid with my Apple ID, and walked out of the store. Took about 4 minutes total.

And I definitely felt like I was stealing something.

That’s nice but also the one negative point about Apple Stores. They are usually packed and many people want to buy something, too many to really handle without a line – yet there isn’t one place where a line could form, which tends to lead to confusion. People who are completely new to Apple Stores might moreover not immediately know where to pay what they want to buy.

When I visited the Apple Store in Munich for the first time I wanted to buy a €15 gift card but every Apple employee was busy and I couldn’t really find a place where I thought I would be able to pay. It seemed like too much of a hassle and that gift card wasn’t important enough for me. I wasn’t really trying very hard to buy something but I think this shows that packed Apple Stores aren’t a very friendly place for small impulse purchases.

By the way, in the Munich Apple Store they sort of do have a semi-permanent setup on the right at the back of the store. I think a lot more people in Germany still pay cash (I payed my iPad cash – don’t ask.) so their nifty cash registers (which are hidden under the tables) are needed more often (they are also not mobile) and there are more or less permanently Apple employees there. If a line forms they will tell you that you can pay everywhere but that doesn’t really help a whole lot when every single employee is busy.

I think what Apple is doing works extremely well for Stores that aren’t packed – but if they are it seems to break down a bit. And Apple Stores are usually packed.

I used to work at an Apple retail store and I empathize with your frustration.

With respect to the line idea, we trialed that and found it to be a disaster. You see as the apple store is so packed we quickly found the line going out the door. This clearly signaled to all who walk by that they should not come in.

We make the best we can of a great(profit)/bad(wait times) situation.

Actually, this is something I hate about Apple Stores. Give me a line to a cash register and I'll happily stand in it, but I hate having to track down someone that will take my money - usually all the employees are chatting up other people in the store.

From this customer's point of viwe, I could never work out out whereto pay for the damn stuff. Traditional visual cues such as 'pay here' have their place.

One of the most common comments I heard was that the Apple Store succeeded because it carried Apple products and catered to the brand's famously passionate customers. Well, yes, Apple products do pull people into stores. But you don't need to stock iPads to create an irresistible retail environment. You have to create a store that's more than a store to people.

People come to the Apple Store for the experience — and they're willing to pay a premium for that. There are lots of components to that experience, but maybe the most important — and this is something that can translate to any retailer — is that the staff isn't focused on selling stuff, it's focused on building relationships and trying to make people's lives better.

Best of luck creating a great experience that makes people's lives better with shit products.

The most interesting part of this article: How someone could leave Apple to work at JC Penny! Really? For some reason I have a feeling he's doing it mainly for the money, but that's just me speculating...I surely hope not.

He's CEO of JCPenney. I don't think he would have gotten to that level at Apple. And if your passion is retail, CEO of it's a dream job.

If you go to his wiki page, you can see his employment history and get an idea for how much he has been compensated at his various companies. If anything, he was at Apple mainly for the money.

Or maybe he's keen for a challenge.

Sometimes it's better to work for a company that sucks at what you're good at, because there can be greater opportunity to improve things and be rewarded for it.

Just me, or do store personnel seem ... extremely formal and polite to an unusual degree of training? Don't mean it bad, they just seem a bit, um, odd. They're so efficient I can't quite put my finger on it.

It's not just you. Ron Johnson, from the article:

No one came to the Genius Bar during the first years.

I have a hypothesis about this: People didn't instinctively walk up to the Genius Bar because they had to be trained to accept the existence of a computer store employee who wasn't going to waste their time.

Of the retail-chain employees that you're likely to encounter in a store, there are two broad stereotypes: The ones who don't really understand the products, and the ones who are trying to close new sales as efficiently as possible. The Apple Geniuses fit neither category, and that does indeed feel odd.

Yep, it takes a while to build a reputation.

"how do you explain the fact that people flock to the stores to buy Apple products at full price when Wal-Mart, Best-Buy, and Target carry most of them, often discounted in various ways"

A little off topic, but I have to say that I have never seen a new, latest release model of any Apple product on sale at any of these stores. Not Wal-Mart, not Target, not even Costco and certainly not Best Buy. Apple products just don't go on sale, so the Apple store is not competing against discounts at other stores.

Walmart doesn't typically do sales. What they do do is force vendors to drop prices every year. Can anyone on the inside confirm if they inflict this on Apple (who probably get around it with yearly refreshes) or if Apple is strong enough to tell them to FO with that.

Something he didn't mention is how Apple is pretty much the only retail store in existence that has items people want to use, and has a policy of letting them use the products as much as they want. I think that's the single biggest difference(well, that and the fact that Apple employees aren't on commision) between Apple and every other electronics retailer. While everyone else is full of people looking to sell you, Apple stands back and let's the products sell themselves. It worked on me.

In many ways, I think the Apple Store has now become a victim of its own success. Recent discussions on HN and elsewhere mention confusion with the how to actually buy something at the store when all the blue shirts are busy. Most of the stores that I have visited recently are packed with people making it hard for those new to the store to browse and explore. It will be interesting to see what Apple does to address these problems as its stores get even more popular and congested.

In case you missed this: http://arstechnica.com/apple/news/2011/11/in-store-pickup-se...

(there was actually a well-commented post about this on HN not too long ago, but after a few min I gave up trying to find it)

Ron will have an interesting challenge at his new employer. I feel for traditional retail that the customer experience hasn't changed that much. Maybe it's because I'm a guy but when I step into a big store like that I want to know exactly where what I'm looking for is. I haven't seen a good solution to that yet for bigger stores.

Context: I am an Apple fan, I have been using its products for a little over 20 years

But am I really the only person who finds the Apple Store a wretched experience?

The first time I went into one I was horribly confused - where to I actually pay for stuff? I want some help with a product that I've bought.Can I ask you? I can't. You? No. Oh, I have to visit the Genius bar. Where's the queue for that? Over there? Oh, there is no queue, I have to book online. Or don't I? Who do I ask to find out?

Even when I book a Genius Bar appointment, I'm left dangling. Hello, I'm here for my apointment - do I tell anyone? Do I kinda hang about until the time slot is here? Will I be called forward?

I hate the places.

I personnaly think the Appstore was awful on the iPhone 1G. You would connect, try to find an app. Some app you couldn't download because it was not available in the app store of your country. Then when you download an app it goes back to the home screen and prompt you with a new thing to accept before downloading it. Then you have to enter your password again (I hope for you its a short one). Then finally it's downloading. Of course you were looking at several apps so if you want to install 2 or 3 in the same time or make a queue you can't, you have to go back in the app store et re-find that other app you saw and install it.

I thought it was a mess and that nobody would really get into it.

Then people started making crappy/fun apps to play with their iPhone/iTouch. And this is were it all started. Imo it's because of the huge number of people who got an iPhone/iTouch that it works. Eventhough we were struggling with the appstore, the possibility of getting new apps like our phone was a computer was something appealing.

The appstore didn't make the iPhone, the iPhone made the appstore.

Please read the article before you comment.

This article isn't about the App Store.

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