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ATPM 7.10
October 2001



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Apple Cider: Random Squeezings From a Mac User

by Tom Iovino,

What’s in Store?

Going to brand new malls is a pain in the rear.

Oh, sure, everything at a new shopping mall is all fresh-out-of-the-carton new. The stores are new. The sales staffs seem especially interested in serving you. Even the food court doesn’t have that greasy, eaten-in look you come to expect in an older shopping mall. It would almost make going to the mall a fun experience.

No, what kills me are the crowds that flock to the new mall in droves. I mean, come on, people. What’s so exciting about another Gap?

I bring this to your attention because on Saturday, September 15th, I was in the rush of shoppers to open the latest and greatest shopping experience in the Tampa Bay area—the International Plaza shopping center, which stands close to Tampa’s International Airport.

After the events of the week preceding the mall’s grand opening—the terrorist attacks in New York and Washington, D.C. on the 11th, and the landfall in the Tampa Bay area of Tropical Storm Gabrielle on the 14th—my wife and I unanimously decided that a little diversion was in order for our family. After reading multi-page inserts produced by the local papers and being bombarded by television ads hyping the grand opening, we all hopped into the minivan and headed directly to the shoppers’ paradise.

Never have I seen a parking lot so jam packed in all my life. Every single parking spot in the lots was full. People were parking on the sidewalks, on abutting construction sites, even in the medians of roadways leading to the mall. It was a madhouse. Typically, once I see a parking lot in such a state, I’ll suggest that perhaps we could do something a little more fun than waiting a few hours looking for a parking spot. But not that day.

No, that day I was on a mission.

In addition to the grand opening of the mall, it was also the grand opening of the Tampa Bay area’s first Apple store. As part of the agreement struck after hours of delicate negotiations between my wife and me, our first stop in the mall was going to be the Apple store.

Opening retail locations is a new tactic by Apple Computer. The reason why Apple is now pursuing this marketing strategy is spelled out on their Web site:

Apple currently has around 5% market share in personal computers. This means that out of one hundred computer users, five of them use Macs. While that may not sound like a lot, it is actually higher than both BMW’s and Mercedes-Benz’s share of the automotive market. And it equals 25 million customers around the world using Macs.

But that’s not enough for us. We want to convince those other 95 people that Macintosh offers a much simpler, richer and more human-centric computing experience. And we believe the best way to do this is to open Apple stores right in their neighborhoods. Stores that let people experience firsthand what it’s like to make a movie right on a Mac. Or burn a CD with their favorite music. Or take pictures with a digital camera and publish them on their personal Web site. Or select from over 500 software titles, including some of the best educational titles for kids. Or talk to a Macintosh “genius” at our Genius Bar. Or watch a demonstration of Mac OS X, our revolutionary new operating system, on our theater’s giant 10-foot diagonal screen.

Because if only 5 of those remaining 95 people switch to Macs, we’ll double our market share and, more importantly, earn the chance to delight another 25 million customers.

Sounds great, doesn’t it? I mean, hey, it’s awesome to get folks out and give them a hands-on look at how the Macintosh works. And, I was duly impressed when we arrived. The place was brightly lit. G4 towers spun on platforms in showcase displays much like the ones you see cars turning on. A movie theater-style queue stood empty outside the store’s entrance (ironically, when we arrived at the mall at 2:30 PM, it was the first time all day that there wasn’t a line of people waiting to get in).

Once inside, I was even more impressed. Blocked beech floors; white walls lined with iMacs, iBooks, and G4 towers; and black shelves stocked with hundreds of software titles—all for the Mac. One of the features my son Dominic liked the most was the kid’s area, featuring eight iMacs on a low table with some unique black spherical seats for the younger shoppers to try out their favorite software. Eventually, I had to coax my son away with the promise of stopping at a nearby toy store.

But, even with all the excitement and hoopla surrounding the opening of Apple stores around the country, I have to question Apple’s decision to go this route.

First, while I believe that the Apple store concept is awesome in theory—allowing consumers to see how the Macintosh line performs without uninformed salespeople steering them towards cheaper, more plentiful PC’s—in practice, it’s just not reaching enough people.

Think about it. Here’s an Apple store in one of Florida’s largest metropolitan areas. But, where’s the Apple store location in other areas of the state? I’m sure one has to be coming for Orlando, Jacksonville, and Miami, but what about the Tallahassee area? Pensacola? Fort Myers? It might be a long time before people in, say, Sarasota can go to their local mall and visit their friendly neighborhood Apple store.

Second, opening these retail locations in some prime storefronts in top-of-the-line shopping centers costs quite a bit in lease agreements. One figure I saw showed Apple committed to nearly $300 million in lease agreements to keep their storefronts open. Wow. That’s quite a bit of money to tie up in lease space. Add on the fact that now you have to pay a corps of employees—some of whom will require a full benefits package and all of whom will require workman’s comp—maintain an inventory, cover store maintenance, etc. Well, those figures are going to add up.

Having mall locations for Apple stores also makes them vulnerable to the intricacies of the economy and mall traffic. A trip to some of our local malls in the Tampa Bay area shows me a number of vacant store fronts, which will probably grow if we slip deeper into an economic recession. Since luxury spending is the first thing people cut out of their budgets, traffic at high-end malls typically drops off with worsening economic times.

Being someone who cut his teeth in advertising, I think it’s only fitting that I offer a suggestion to Apple. A better tack than opening the retail locations would be for Apple to invest their substantial retail investment into a fun, exciting ad campaign.

Flood the airwaves. Buy lots of ink space in newspapers across the country. Put the Macintosh message in front of as many consumers as possible to get the word out that Apple has the fun, exciting, powerful, educational computers.

I know what you may be thinking. “What about all of those Jeff Goldblum ads that I see on TV?” Well, I don’t want to insult those of you who may be fans of them, but they bore me to tears. There’s nothing funny, creative, or memorable about them. And, they are trying to appeal to an audience that is far more computer-savvy than the folks Apple should be targeting. I’m ashamed to admit that I didn’t even understand what the “Rip” in “Rip. Mix. Burn.” meant until it was explained to me.

Apple needs to get an ad campaign that grabs attention, gives consumers a catch-phrase or slogan they can remember, and is memorable. Then, they need to plaster it all over the place.

Just think about a big company like Coca Cola. They dominate the soft drink industry, leading rival Pepsi in sales. But, look just about anywhere and you can see ads for Coke. It reinforces the message.

“Wait a minute!” you shout in protest. “There’s a huge gulf of difference between a 50-cent can of soda and a $1,000 computer!” Sure there is. But the principles of advertising still apply. Think about the new Volkswagen Beetle. Here’s a product which consumers clamored for even before it hit the showroom floor. People got onto waiting lists for a car they had only seen on commercials—never on the road. And that car easily cost 15 to 20 times as much as an iMac.

This ad campaign would reach everyone via their TVs. It would hit people in Peoria, Illinois. It would hit people in Lake Charles, Louisiana. It would hit people in Juneau, Alaska. Then, if Apple were to push their partnerships with Comp USA and Sears, Apple would just have to provide the inventory—and perhaps a few Apple-trained employees—the way cosmetic manufacturers do in retail stores—to steer people to a Mac.

Our trip to the new International Plaza was a great experience. We learned how to find a parking space in hostile territory. We learned how to push our way to the front of the food-court line. And, I got a chance to see Apple’s newest marketing strategy up-close.

Now, Apple just needs consumers to shop ’til they drop!

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Reader Comments (5)

Rob Durnford · October 5, 2001 - 08:22 EST #1
I suggest that the Apple stores are not meant to be everywhere but rather to demonstrate to Apple authourised agents that this can and will work for them if they follow the Apple example. For a long time there were no real storefront all Mac or almost all Mac stores in my Canadian Capital city. Now BMac has opened a well lit clean and functional combination Graphics and Macintosh shop. This has provided the best place to see, try and buy since before I moved here in 1993.
Tom Iovino (ATPM Staff) · October 5, 2001 - 08:29 EST #2
Rob - Thanks for your comments. If Apple's idea is to show a blueprint for how a store featuring Apple Computers should be run, then they have hit a home run. Unfortunately, I'm still not convinced that this is the way to go. I'd really be interested to see if Apple conducts buyer surveys to see just how many Mac Converts they are creating, or if they are only preaching to the choir. Tom
David Chilstrom · October 8, 2001 - 14:27 EST #3
Time will tell if the Apple stores are a hit or a disaster. I've noticed that Apple claims they will break even this year and score a profit in the next. Sounds good to me. The bottom line is that Apple's retail efforts to date have relied on inept sales people who don't give a fig about the Mac. They had to do something. I'm less concerned about Apple than I am about Apple only dealers getting pinched by the competition. With four billion in the bank Apple can and must take some risks to thrive.
Tom Iovino (ATPM Staff) · October 9, 2001 - 08:25 EST #4
David - It's a risk alright. Remember, those projections were made before the September 11th attacks which have cooled off an already tepid economy. This holiday shopping season (can it be that it's only a few weeks away?) will be telling - will people flock to the malls - the high-end ones - and buy Macs, or will people hold back on holiday purchases, hurting Apple's efforts? While Apple does have gold in the coffers, if this idea fails to take off and fly, there's going to be a mighty big hit to be taken. Tom
anonymous · October 11, 2001 - 11:50 EST #5
As recent visitor to International Plaza, I, too, was impressed by the beautiful displays and flooring, etc. However, it didn't make me go inside. Why? For starters, the store wasn't open yet, but more importantly, because I don't own a Mac nor am I in the market for new computer. Perhaps Apple should spend more money on trying to convert those of us who bought PC's because it was compatible with our work computers or software availablity and cost, not to mention that you can buy a PC anywhere, including Wal-Mart. I was a the proud owner of a Apple //c way back in the day and I worked on Mac throughout college. I loved it, it's friendly little smile, ease of use, the cute little dot matrix printer. I still think the strawberry iMac is one of the yummiest products around. However, Apple is going to have to work a lot harder to woo my thousand bucks than a cool store and some spiffy new building materials. How about getting some machines where real people shop, like Target, Sam's Club, or Best Buy? Some of us ordinary computing folk don't want to have to go to a special store for hardware or software. Besides, what would I do with my husband's 6-year-old collection of Madden Football Games for PC? Use them as high tech coasters? Please, Apple, give me a reason to spend! Until then, I'll keep my eye on the Macs but keep my fingers on the keys of my PC.

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