Apple Michigan Avenue Waterfront Store, Chicago, IL

How to Be Successful Retailing in the Experience Economy: Lessons from Apple

For the latest and greatest in personal technology, everybody looks to Apple. They lead the pack in creating innovative, user-friendly computing products. And the company takes the same innovative, forward-looking approach to retail.

Yet people think of Apple as a product-first technology company, when in fact it is a hybrid that seamlessly combines products and services into a new kind of company that is ideally suited to the evolving experience economy. It transforms its products into experiences and delivers those product experiences through a new kind of retailing model that elevates the Apple Stores from a place to buy things into a destination to have meaningful, important experiences.

As innovative as Apple is as a product company, so too it is as innovative as a retailer. That’s why retailers across the board need to listen and learn from Apple. But my experience is that unless you’re a retailer that competes in Apple’s vertical, like Verizon and Best Buy, what Apple is doing at retail is not really on your radar, unless it is as a customer. But the same revolutionary approach Apple takes in product, it is doing at retail.

With so many struggling retailers trying to respond effectively to the emerging experience economy, retailers in every vertical can learn from Apple. Here are three important lessons about its experience-based retail business model that Apple has implemented and retailers across the board from grocery, fashion, home and the rest need to understand too:

Become A Place To Learn

In the experience economy, consumers take very seriously, and seem to enjoy, their experiences leading up to a purchase. In research with consumers, I am amazed how much time, effort and consideration these time-starved, multi-tasking people devote to pre-purchase research for purchases both big and small. They are relentless in gathering all the information they can about buying the things that matter to them, and it seems so many things matter.

Retailers have an awesome opportunity to provide the information their customers so crave. But the secret is not pushing that information out as a marketing ploy, but to use the information to draw them in. It’s got to arouse curiosity and be real meaningful, useful information that will give them an edge, not marketing fluff which they can smell a mile away.

“Today at Apple” is its answer to providing meaningful, useful information tailored to the interests and needs of its customers. Sure, a lot of the “Today at Apple” educational programming is aimed at helping its customers learn how to use its technology, but much more importantly, it also exposes them to new experiences in music, art, design and photography, broadening their perspectives and delivering information from subject-matter experts educating and informing them, not shilling Apple products.

Recently I’ve been working in home furnishings retail and have learned that decorating a livable, comfortable and stylish room is not as easy as portrayed on 30-second Wayfair commercials. Retail home furnishings customers are really eager to learn more about home design. A furniture or home furnishings retailer should be a place where consumers get that information, so that they can become better designers of their home space and better home furnishings consumers.

But the same thinking applies to any other category of retail, from fashion, grocery, gifts, books, jewelry, beauty, crafts, office supplies, pharmacy. Consumers today, the customers retailers hope to serve, are information sponges. Retailers should think beyond providing information just about their merchandise to providing information about the customers’ lifestyles, dreams and aspirations that their merchandise makes possible.

Meet that higher-level need with meaningful information, above and beyond the lower-level drive to sell more product, and you will bind that customer for life. In the experiential economy, retailers need a similar “Today at Apple” strategy to serve their customers’ lifestyle interests, not just their product-specific needs.

Become A Place To Gather

Now with nearly 500 stores worldwide and after 15 years of retail behind it, Apple is re-envisioning its stores as “Town Squares,” places where people can come together, learn and experience, as well as places to buy product. The redesign is more than just window dressing, though it includes that, like adding living trees to the modernistic store design and changing the name of its Genius Bars to “Genius Groves.” It transcends the idea of the four walls of the physical store from a place to display products in anticipation of a sale into an environment where people will gather.

“The store becomes one with the community,” Angela Ahrendts, Apple’s senior vice president of retail explained in an interview with The Verge. “The over-arching vision of the future of Apple retail … is what do we want Apple’s role in the community to be?” That goal, according to Ahrendts, is to make Apple stores forums for collaboration.

This is a powerful idea: the retailer as a place for people to share experiences in a community of collaboration. “As we need less or want less, stores that figure out how to make you go there – where buying is secondary to the experience, but not the focus of the experience – are going to be important places,” Ken Nisch, chairman of retail design firm JGA shared with me in Shops that POP!, as he pointed to both Starbucks and Apple as retailers that do just that. “It used to be that lifestyle retail was the ultimate. Now it is concept retail, shops like American Girl Place and Selfridges. These are stores at the top of the retail pyramid that have built a community. They become part of the community.”

Malls as they try to figure out how to bring customers back again are beginning to understand the need to become vital members of their communities, not just places for people to buy stuff, but community centers where people come together to share and connect. Main Street USA, and the retailers and other local businesses that make their home there, are places where those community experiences can occur.

Become A Place To Serve

As retailers go, Apple is the most modern of modern retailers, but one aspect of retail never goes out of style: good old-fashioned customer service. Modeling its customer service approach after luxury hotelier Ritz-Carlton’s Steps of Service guidelines, Apple adapted its own steps of service, creating an acronym that appropriately spells A-P-P-L-E:

  • (A) Approach customers with a personalized warm welcome – “May I help you” is not helpful at all for retail. Retail personnel need a new script that really connects with people and gets them to answer beyond, “No, just looking.”
  • (P) Probe politely to understand customers’ needs – The Apple sales philosophy is not to sell, but rather to help customers solve problems. Its stated goal is to “delight the customers.” contributor Steve Denning explained, “Apple has grasped that making money is the result of the firm’s actions, not the goal. By delighting the customer, Apple ends up making more money than it would if it set out to make money.”
  • (P) Present a solution for the customer to take home today – That solution may be a new piece of Apple gear or a problem solved by one of the Apple Geniuses or pictures taken on a guided Photo Walk.
  • (L) Listen for and resolve any issues or concerns – And when all else fails, Apple has developed a guide for its sales associates called “Emergency First Aid for Emotional Customers” that is heavy on feeling and empathy, such as “Listen and limit responses to simple reassurances,” and “Acknowledge the customer’s underlying reaction.”
  • (E) End with a fond farewell and an invitation to return – As important as customers’ first impression is, so also is the feeling that they have when they leave the store. So Apple trains on both the hellos and goodbyes to have customers take away good feelings, good memories and look forward to their return.

Christopher Ramey, of retail advisory firm Retail Rescue says, “Most luxury hotels train their employees every day, but my experience with retailers is they train every year, if that often,” Ramey said. “The disconnect is obvious.”  And he notes the importance of providing sales associates with scripts for customer interactions at the opening, closing and throughout the service process, just as Apple has done. “Communications are powerful and today there can be little latitude for the salesperson to be flexible with words.”

In closing, while people tend to think of Apple as a product company, it thinks differently of itself. “We think of Apple Retail as Apple’s largest product,” Ahrendts said this fall in Apple Park where it introduced the new iPhone X.

Apple retail generates some 28% of the company’s $229.2 billion net sales, according to the 2017 annual report and its impact not only on sales and branding but in personal customer connection are only going to grow. Retailers that have yet to figure out the new retail business model for the experience economy, and most still don’t have a clue, need to look to Apple for inspiration. Instead of “apple for teacher,” it is Apple IS teacher.

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