How Many Apple Stores Can There Be?
Apple has recently opened another store in New York. In fact, you might have heard something about it. It has an enormous glass cube out front, making it rather hard to miss. It is also in a very nice part of town, one guaranteed to bring in lots of well-off customers. This all works out very well for Apple, however, I have a simple (yet important) question. How many more Apple stores can be opened?
If you look at the locations of Apple’s current stores, you will notice a trend. They all tend to be in shopping areas that are fairly upscale and they also are spaced fairly far apart. This is quite unlike most companies who try and put a store anywhere they think it might have a chance of making money. And whenever I think of over-saturating the market Starbucks always comes to mind. But forget the coffee, and lets get back to this problem Apple will face eventually.
What happens when it runs out of upscale real-estate that doesn’t have an Apple store nearby? Apple can either stop building stores or it can begin to move into lower-class areas. Obviously stopping construction of its hugely successful shopping meccas won’t be an option, so we are left to conclude that it will just open up stores that it knows won’t do as well just so it can increase its presence in the market. But wait, there is a plan B to consider.
What if Apple ensured that only the best shopping districts received an actual Apple store while creating iPod Stores in all of the remaining markets. An iPod store you say? What’s that? Why, it is a store that primarily sells iPods and its accessories with perhaps a few Mac Minis thrown in for good measure. Oh, and they will also sell shoes.
Nike shoes to be exact. And any other cool gadget from any other company Apple decides to partner with. These iPod stores could be much smaller than a regular Apple store and need not include a full Genius Bar, but rather one dedicated to fixing iPods and their related problems. As a result these little places could appear in smaller malls across the country, filling in the gaps left by major Apple stores.
This way Apple could increase its sales of iPods, increase its presence among consumers (Apple stores are very distinctive), and do this all without taking too many sales away from its flag ship stores.
Don’t think this will happen? Give it time. Apple has a winning strategy on its hands with its retail centers and it would be foolish indeed not to consider dedicating a store to its best selling product. As this latest deal with Nike shows, the iPod is becoming a mini ecosystem of its own and things are only going to get bigger from here. So iPod, here we come.
del.icio.us
Digg
Facebook
Slashdot
StumbleUpon
Comments
There are almost 150 Apple Stores in the U.S. and only 2 in Canada. Why is this?
to dustincook
The same reason that we have only 5 Roots stores in the US, while there are 124 in Canada.
Think real hard, and you just might get the answer.
In reference to Starbucks, ubiquity is not the same as over-saturation. If the market were over saturated, the company would stop opening new stores. I’m sure that the occasional Starbucks store is closed for whatever reason, but the company surely has a method of determining each individual location’s market in reference to opening new stores.
I’m sure apple goes through similar planning when opening new stores, considering population density, median income, etc. You could make the “how many stores can there be” argument against any retailer high- or low-end. I don’t see how iPod only stores would be necessary. Apple already has essentially a two-tiered retail strategy anyway, with the “flagship” stores like the new New York store and the downtown Chicago store and the second level shopping mall-type stores in other smaller markets. I could see them forming partnerships with other retailers to sell iPods in Nike stores, for example; but it makes no sense to open an iPod only store and eliminate the possibility of selling anything more in that market.
They may only need kiosks to sell iPods- the likes of which Dell already has. The “real estate” would cost less, though theft may be an issue.
e:leaf why then according to your theory are there so few in britain, where we are by and large less bound by abject poverty and have so few apple stores. possibly the real reason is more subtle than your leptocephalic supremacist mind has hitherto conceived?
Seriously, I’d like not to have to go to london just to rub my mits over a macbook’s shiny plasticky goodness.
Well Glasgow (Scotland) we already have a small apple store it has the line of macs it also has the line of ipods but isn’t quite as good as the one in London. Small apple stores do happen (they just call them resellers.) my local reseller is also an “apple centre” and does pretty much the same thing it is just smaller.
Ben. There are 6 apple stores in Britain one per 10 million, when Canada has 1 per 15 million. Japan has only 6, one per 21 million! France has none and Germany has none! Not bad for our wee island
USA will always have more because apple is USA based. (has 1 per 2million)
but we all have the online apple store!
(Ya i know we actually have a dedicated apple retailer here in bath i was just being inflammatory. And I realise we’re actually doing rather well
Sorry for the outburst)
ben. kudos for “leptocephalic”, good word use.
Not a bad idea, James. Not a bad idea t’all.
Apple should not get too careless in opening too many stores too fast. It has to consider demand very carefully and analytically. Much more so than emphasizing the supply side [more stores?].
So research in this area is very important. Apple won’t just open a store in every city with a population, say over 1 million, and expect it to be profitable. No it is more than that. That research has to consider every demographics you can imagine like how many 18-34 year old males on this geographical area of London. Then how much do those blokes (pardon the expression, I did learn some Anglo-speak while in Australia) earn in wages yearly? Education level? Such and such and such.
Another, Apple’s focus right now is not retailing (thankfully) and I believe should not get involved too much in this retail business. The Big-A should create a separate entity or a division to handle this task and assign a strong sales/marketing guy/gal who is autonomous yet accountable to the CEO. This way hardware/software engineering can go on crafting awesome gizmos and apps.
Why are there more Apple Stores in the States? Simple, conquer your home territory first and only establish “beach heads” overseas. Apple knows and understands the U.S. market better and should concentrate their efforts here initially. The E.U. (yes, includes the U.K.) is the next target along with East Asia (Japan, China, Korea). Sorry Canada you just have to wait for a good research on your area.
So, when the anticipated uptick in demand after the Intel transition happens, the then-“autonomous” division can dream up other ways to sell Apple warez both here and abroad. I do like that “Plan B” where it is smaller yet trendy like its big brother. They also fit the smaller shopping centres and malls. No need for kiosks. They don’t offer the same buying experience, which is very important to Steve’s overall plan - the buyer experience is sacred.
There is a huge market for Apple to address and it is going to take years before Apple is close to a saturation point.
The first thing to understand is that Apple has some very smart retail people directing this retailing effort and they have made some very good decisions related to the concepts of what an Apple store should be, the design of the stores and how they are locating them.
Because of this they are able to select sites that have been will be successful. I would guess that there is a potential for another 100 stores in the US and a lot more internationally. They won’t all be the larger variety, but they will all provide the basics, including a strong Mac presentation and a Genius Bar.
It’s just going to take time because Apple doesn’t cookie cutter the stores and staff them with part time high school students.
http://www.flickr.com/photos/modrak/153545982/
something like this? =)