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Thursday June 16, 2011 4:00 pm

Apple Store: Here are the secrets of its amazing success

Posted by Andru Edwards Categories: Apple, Corporate News

Apple Store Galleria

What's the real inside dirt on how Apple runs its equally successful and secretive Apple Stores? The Wall Street Journal claims to be privy to Apple's secret sauce after poring through Apple Store training manuals, a recording of a store meeting, interviews with current and former store employees, and conversations with outside analysts.

In a report published yesterday, the Journal serves up the dish on everything from Apple's store design strategy to the granularity of employee sales training. Some of the information the newspaper dug up is fairly obvious—for; example, Apple doesn't do cookie-cutter designs for its Apple Stores, but rather "constantly evolves its stores' look and feel."

But some of the reported Apple Store skinny touches on areas that may have been guessed at, but have now been apparently confirmed. To wit, current and former Apple Store employees say store techs aren't allowed to "prematurely" acknowledge product glitches that are already widespread, and writing about Apple online will get you fired from an Apple Store.

The Journal also layers in plenty of Apple Store stats—did; you know that more people now visit Apple Stores in a single quarter than went to Disney's four biggest amusement parks last year?

Here's a quick look at some more interesting Apple Store tidbits that the paper either uncovered, confirmed, or highlights in the article.

Origins of the Apple Store

  • Apple CEO Steve Jobs decided to build Apple Stores as a defensive move in the late 1990s, a time when big box computer retailers refused to stock its Mac computers due to the weakness of the Apple brand.
  • Jobs brought Millard Drexler, then-president of the Gap, onto the Apple board in 1999, specifically to help shape a retail strategy. So many Gap employees migrated to Apple's early retail team that they joked about working for "Gapple."
  • Drexler pushed for the hire of Ron Johnson, then a Target executive, who would shape such Apple Store fundamentals as the Genius Bar and scripted customer service approach before announcing his departure Tuesday for the CEO job at JC Penny.
  • Apple built a "prototype store" in a Cupertino, Calif. warehouse and tested its retail concepts for a year before opening the first two Apple Stores in Tyson's Corner, Virg. and Glendale, Calif.

Life in the Trenches

  • Apple is pretty controlling of its 326 Apple Stores, to say the least. The company writes scripts for technicians and salespeople that prescribe how to handle every sort of customer interaction, including how to nod along reassuringly when somebody gets emotional. Apple also manages the look and feel of its stores down to details as granular as the precise photos that appear on demo devices.
  • Apple Store wages range from $9 to $15 per hour for salespeople and can reach $30 per hour for Genius Bar staff.
  • Salespeople don't get commissions. In fact, they're instructed not to "sell," but to "solve problems" for customers. There are no overt sales quotas at Apple Stores, but salespeople do have to sell a certain amount of service packages along with computers and devices or face re-training or even a move to a non-sales position.
  • If you're as little as six minutes late to your shift three times in six months, you're fired.
  • The Apple Store's employee handbook offers this set of instructions for a customer engagement: "Approach customers with a personalized warm welcome," "Probe politely to understand all the customer's needs," "Present a solution for the customer to take home today," "Listen for and resolve any issues or concerns," and "End with a fond farewell and an invitation to return." Take the first letter of each step, and you've got APPLE.
  • Apple Store staff is forbidden to correct a customer who mispronounces the name of a product.
  • Genius Bar staff training is intense and goes beyond just tech support to instruction on how to speak to customers. "Geniuses" are made to use the phrase "as it turns out" instead of "unfortunately" when they have to tell a customer they can't solve their problem, for example.
  • Moving from a staff position at an Apple Store to Apple corporate is "rare."

Stunning Success

  • Apple currently generates $4,406 in annual retail sales per square foot of retail space where its products are sold, excluding online sales. That's in contrast to the annual sales per square foot plus online sales of Tiffany ($3,070), Coach ($1,776), and Best Buy ($880).
  • Apple Stores have defied market trends in recent years. Apple's retail sales grew 7 percent in 2009 as the overall retail market saw a 2.4 percent decline in revenue. In 2010, Apple further grew its retail sales by 70 percent, as compared with just 4.5 percent growth in the market writ large.

What the Future May Hold

  • Former Apple Store employees say the quality of retail staff is declining as Apple expands its retail presence and has fewer actual Apple loyalists to select from for hiring.
  • Analysts interviewed by the Journal chime in that Apple is going to have a tough time maintaining its standards of customer service if it continues to build more Apple Stores.
  • Apple is keen to move beyond the consumer market and is wooing business customers with new "Briefing Rooms" in its Apple Stores, as well as a business-only program called "Joint Venture."
  • Despite his health issues, Jobs is still heavily involved in the Apple Stores, offering "input on details down to the type of security cables used to keep products leashed to the tables," according to the Journal. One source who visited Jobs as he was recovering from his liver transplant a few years ago said he found the Apple CEO "poring over blueprints for future Apple stores."

This article, written by Damon Poeter, originally appeared on PCMag.com and is republished on Gear Live with the permission of Ziff Davis, Inc.

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