The Apple-ization of Retail

Ten years ago Apple decided to re-enter retail. Industry pundits said it couldn’t be done and predicted the demise of the effort-even the company. Apple never retailed its products. Not content to do business as usual in this important new channel, Steve Jobs and his team apple-ized retail. Now, Apple is demonstrably the world’s number one retailer with impressive sales of $6,000/SF.

In this audio interview, courtesy of “Billy the Brain” of KKZZ in California, you will hear some of the stories that explain why Apple does things differently in retail, how they do them, and why Apple’s example offers other retailers important lessons.The interview covers specifics of what Apple does in-store that sets it apart and demystifies key aspects of the Apple experience.

Listen to the file right here or download it to take with you!

KKZZ radio interview on the Apple-ization of Retail

You can also stream the audio from the KKZZ site by clicking here: http://brainstorminonline.com/mike-wittenstein-reveals-the-secrets-of-apple%E2%80%99s-retailing-success/

Full Transcript
Bill: Hi, this is Bill Frank and you’re listening to brainstorming with Billy the Brain. We’re live every day, Monday through Friday at 10:00 at KKZZ, positive talk radio for Ventura and Santa Barbara County. You can also hear us streaming over the internet at brainstormingoneline.com. My goal is to bring you interviews with thought leaders in business, entertainment, sports and the local community. Together we’ll listen to what these people say and relate it to how we live and work right here in Ventura County. Brainstorming with Billy the Brain is smart radio with sharp questions aimed at intelligent guests. It’s talk radio done right for the 21st century. If you want to join in the conversation, you can always call us at 639-0008 or if you’re outside of the area code, it’s area code 805-639-0008. Every show has a theme and today’s theme is alternative perception. Each of my guests will explain how one slight change in our perception can make the world of difference.

My first guest knows that changing the customer’s perception in retailing separates the great retailers from the also rans. We’ll examine how Apple revolutionized retailing and the positive impact that that change had on Apple ‘s performance.

My second guest created an alternative perception about being a genius. She concludes we’re all geniuses. We’ll discuss how to unleash that genius from her latest book titled “Practical Genius.”

My third guest serves on the Board of Directors of the partnership for a healthier America that’s the non-profit foundation supporting first lady Michelle Obama’s Let’s Move Initiative. She’ll provide an alternative perception about how we can be physically fit in ten minutes at a time from her book “Instant Recess.”

And if you have a question, or if you just want to join in the conversation, you can call us at 639-0008. Mike Wittenstein, my first guest, has helped business leaders around the world differentiate their brand by dramatically improving their customer experience. As a result, those clients have gained market dominance, increased their sales, and/or discovered new, unexpected revenue streams. Mike is a sought after speaker and consultant. He works in the hospitality, retail, technology, healthcare, and entertainment industries. He helped retailers like Party City, Kinkos, Best Buy, Alternative Apparel and SoHo Office elevate their customer experience while making it a lot more engaging and even fun for all involved. As an e-visionary at IBM, Mike launched that company’s first global experience designing and consulting practice. He’s also the co-founder and CEO of Galileo, a technology communications company nationally recognized for its innovation and creativity. Mike speaks four different languages. He received his MBA from Thunderbird School of Management, his BA in Foreign Languages and Cultures from the University of Florida and Middlebury College and Pushkin Institute in Moscow and Centro Unificado Profissional in Rio de Janeiro. Welcome to the show, Mike. Or should I say, welcome back. How are you today?

Mike: Wonderful. It’s a pleasure to be back, Billy. Thanks for having me.

Bill: Well, thank you for being our guest, and it couldn’t be more timely because the world is saddened when we learned that Steve Jobs died last week. Jobs definitely left his mark on a variety of industries we talk about all the time – telecommunications, computing – all of that – music, certainly. But one of the more overlooked industries that Apple had a direct impact on is retailing. Steve Jobs knew that retailing was really about that customer experience. Apple – the Apple stores – they definitely deliver a unique, positive customer experience, so give us the secret sauce, there. What is Apple’s secret for delivering one of the world’s best customer experiences?

Mike: What Apple did under Steve Jobs’ leadership was phenomenal. They were able to take the principles of their product design – simplicity, sleek, easy to use – and move that over into the retail space. Had they simply taken their products and retailed them, they wouldn’t have succeeded. They Applelized retail instead. They made retail work on Apple’s terms – easy interfaces, friendly people, promises that were kept. Those are just some of the things that explain the phenomenal success that they’ve had. I’ve got many stories to tell you beneath that.

Bill: Well, now that’s interesting. I love the term they “Applelized” retail. I’m going to steal that from you. But let’s talk about a recent development. I mean this is very recent, I just heard today that Google is opening up its first retail store in London. So give us some predictions. How do you think that experience is going to be as they try to “Googleize” retail from that perspective?

Mike: Interesting. You know Paypal is doing the same thing in the Tribeca area in New York City. Their store, I believe, is opening in the next couple of weeks. When these big, big players that have been invisible to people that are walking down the street appear in the physical world all of a sudden, it gives people by the millions the opportunity to get a first impression of what those brands are and shift those perceptions around what those companies can do for them. I have no idea what the Google store is all about. My guess is they need to make inroads with retailers, with business owners, as well as with consumers. They’ll have a chance to show not just Google’s technology, but how that technology enables people in business to interact differently and better. They’ll be showcasing experiences as much as they will technologies to help reduce fear, to help increase usability and to help everyone fan the flames of their story. If they do it right, they’ll also have video inside of the stores so that people can create their own podcast while they’re there and share them with their friends. That’s how millions of people will get to see that experience in today’s pop-up store.

Bill: That’s something we’re definitely going to watch as that story unfolds before us. My guest is Mike Wittenstein. So, Mike, let’s go back to the Apple stores because they’ve clearly succeeded. There are over 300 Apple stores in the United States right now and more are opening up, albeit at a much slower pace than it was before the recession started. But still, a lot of different stores, a lot of retail around the country. Give us some specifics about what Apple does that is just so unique as they Appleize that retail experience?

Mike: Sure. Apple does a few things differently. One of the first things it does is it checks customers in instead of checking them out. When you go to an Apple store, somebody greets you at the front door. They look in your eye, and they don’t say “may I help you?” They say “what brings you in today?” Or they’ll take a look at what you’re carrying in and they’ll say “or, I’m sorry you have a problem with your iMac, let me get started and I’ll get somebody to help you with that right away.” They’re attached to two things. One of them is their iPod or their iPhone and they use that to communicate with other parts of the store so they can queue up the resources that you need. The other thing that the front greeter wears is a headset so he/she is able to talk and find out the best person to send you to, take you through triage, if you will, that first stage of support, so that the person that they point you to and take you over to is definitely the one who can solve your problem. When people go to an Apple store, they don’t dread it like they do sometimes going to the cable company or their local wireless carrier. They actually look forward to it. And that’s because they know that they’re going to walk out in a better state than when they walked in.

Bill: Well that is something that everybody in retail wants to aspire to. Apple has done it well. And I really hadn’t thought about it until you just mentioned it, but they do check customers in instead of checking customers out on the back end. That’s unique. What else do they have that’s unique?

Mike: Here’s a really unexpected retail behavior that I noticed myself. It was time to upgrade my laptop – I wanted a MacBook Pro – it was about two years ago. I went with my wife and one of my kids and of course I wanted the very best one out there. I used to run an agency and I had purchased 15 or 20 of these and I loved them. And I was so tired of my PC. I said I want the best one right here and I just know that is a good set. My wife looked at me and said “are you sure you need all that power? Do we need to spend that much”? I said “well yeah. I’ve got to do A, B and C. I’ve got all these applications and these projects. I need to do presentations and work with clients on site.” The Apple rep picked up on that and took me through about 25 minutes of questions to make sure that we got the right one. We started at the low end and worked our way up incrementally. He tried his best to sell me a less expensive machine. Now why was that? He wasn’t trying to make less money for the company. He was trying to make sure that I would be, for the long haul, a satisfied customer. That I had not just the right mix of technology for my work, but that I had the right product for me and one that would keep my family happy at the same time. That built trust in Apple and now we own multiple devices and I go back to that experience over and over. And it plays itself out thousands of times every day, in 300 stores, in 15 countries around the world.

Bill: Alright, Mike. Well, tell us the end of that story. There were a couple of things that I remarked on as you were going through it. First of all, which PowerBook did you buy – the middle of the road one that he suggested, or did you go high end?

Mike: I went to the high end one – with good rationale.

Bill: Alright, so you had a preconceived idea and you went in and you fulfilled it. That was great. The other thing that I remarked on when you were going through that is that the rep that you were talking to spent 25 minutes asking you questions. That is almost inconceivable in a retail experience today. I can’t imagine going into a Macy’s or going into a department store and a) finding a rep let alone having that rep spend 25 minutes with you. How can Apple afford to allow their people the luxury of spending that much one-on-one time with a customer?

Mike: That is a great question. One of the biggest challenges in retail is making sure that you have enough people to serve the customer demand or traffic that you have without overspending on retail. So what Apple did is it took a lot of the management functions that you typically find a store manager doing and they gave it to the customers to do. They let customers schedule genius bar support, IT time training and customer support from their iPhone, from their iPad, over the phone and on the website. The customer picks the time and picks the store that they want to come in. The best thing about that is it gives Apple a heads up on how many people are needed at which stores and which times. So they don’t have frustrated customers that aren’t getting attention or frustrated accountants who are paying too much to have people stand around and do nothing. It’s one of the things that really changed up the Apple equation. They’re always well staffed – I wouldn’t say always – but, they’re very well staffed and the people know that they’re going to get a good hour with an Apple employee look forward to it, spend the hour and then its on to the next person.

Bill: My guest is Mike Wittenstein. We’re talking retail. In specific, we’re talking the Apple stores and the high bar that the Apple stores set in the retail market. So, in that last answer, Mike, you mentioned something that I wanted to come to and that is the genius bar. Now Apple has a genius bar in each of those stores. Which to me when I first heard it sounded like an affectation. What advantages does having a genius bar in every store present for Apple?

Mike: I think it slims and speeds their supply chain. And, it also builds confidence in the brand. The confidence in the brand part comes from knowing that your product will be taken care of and that you don’t have to ship them away to do anything. You can, no matter what your question, be treated by someone who’s smart and treats you as smart. Who gives you the answers that you need and usually gives you that little something extra, an indication of that extra program, a tip on how to operate better or smarter or introduces you to a peripheral that will make your life better. Those folks, just like the greeters at the front door, ask you questions to find out how that computer, how that software fits into your life and makes your work a lot better.

Bill: Well, Apple stores are an incredible opportunity. They’re an incredible experience. If you haven’t experienced it, we do have an Apple store here in the area at the Thousand Oaks Mall. You can go to the Oaks Mail there and you can experience it for yourself at the Oaks Mall. Mike, I want to change it up a little bit, if I can. Because you’ve got a real diverse background working with a lot of different companies in retail. One of those companies was actually started and founded here within the listening radius of our voice and that is Kinko’s. So, you improved the retail experience at Kinko’s when you were doing there. So describe the experience. What was it like working with Kinko’s and what issue or what blind spot did you help Kinko’s overcome in their retail experience?

Mike: That was my first job out of graduate school and I was hired on to open a couple of new stores. It was the first time, too, that I was presented with the opportunity to work on the employee experience. I had to open stores in markets where Kinko’s didn’t exist at all, mainly Winter Park, Florida, a small college town next to Orlando. My hometown, by the way. Knowing that I had to staff up the store and knowing that it would be very difficult to give people a sense of what the Kinko’s way of doing business was, I rented a bus and I took all of our candidates on a bus tour to the Kinko’s that was closest to us in Tampa and the other university. But also to a number of different retailers and stores along the way there and back. I sensitized them to the details of customer experience and gave them a feeling for the kind of experience that I was going to expect them to deliver. That was a magical lesson for them and a wonderful one for me as well. I found out that given the opportunity to be what was expected of them, most employees that aren’t prepared will opt out. Those that are prepared with their hearts and their service-mindedness will be more excited than ever before and stick with you for a long time.

Bill: What an ingenious idea. Load everybody on a bus and go on a customer service tour. That is the kind of thinking outside the box that I guess we’ve come to expect from you, Mike. So, let’s talk about the future. What do you see as the next areas for improving customer experience that might also help to improve a company’s bottom line? What are the new frontiers?

Mike: Well customer experience design is the technique that I’m most excited about right now because it treats the retail equation not as a constraint, not as a thing that you have to push customers through at the highest volume and the lowest cost so that you make the most money. Design is a classic problem-solving approach that gives everyone in the equation – customers, employees, shareholders – all more what they want. If you apply the different principles of customer experience design, you get happier customers who talk more about the brand; engaged employees who bring their hearts to work and shareholders who smile at the end of every quarter. It is THE way to bring all the disciplines together so that everyone can be on the same page and work toward delivering more value toward customers which is what Apple does in its retail and what all retailers need to refocus on.

Bill: Now, that’s important. My guest has been Mike Wittenstein. He is an expert in retailing. Of course, we’ve been talking about Apple stores as sort of a model there. Mike, if people are intrigued by what you have to say, they want to learn more about this customer experience design, they want to learn more about you and your company, where would you direct them to go on the internet?

Mike: Visit my website or just google “Mike Wittenstein”. You’ll find videos, interviews, articles, and the website, of course, at http://www.mikewittenstein.com.

Bill: Mike, it has been a real delight. Thank you so much for being my guest here on Brainstorming with Billy the Brain. We’ll talk to you down the road

Mike: Thanks, Billy.