After years of fan driven mania, manifesting itself in concert-ticket like lines in front of its locations for the launch of major products, the Apple Store may be losing its cool. Apple users are becoming frustrated with the store’s poor service. Bloomberg’s Mark Gurman and Matthew Townsend report (via the LA Times):
There was the time he visited the Easton Town Center location to buy a laptop for his 11-year-old daughter and spent almost 20 minutes getting an employee to accept his credit card. In January, Smith was buying a monitor and kept asking store workers to check him out, but they couldn’t because they were Apple “Geniuses” handling tech support and not sales.
“It took me forever to get someone to sell me the product,” said Smith, who runs 2PM Inc., an e-commerce research and consulting firm. “It’s become harder to buy something, even when the place isn’t busy. Buying a product there used to be a revered thing. Now you don’t want to bother with the inconvenience.”
Smith’s sentiment is shared by legions of Apple customers who vent on social media, on customer forums and in conversations with reporters. Only a few years ago, the raves easily outpaced the pans.
In interviews, current and former Apple employees blame a combination of factors. They say the stores have become mostly an exercise in branding and no longer do a good job serving mission shoppers such as Smith. Meanwhile, they say, the quality of staff has slipped during an 18-year expansion in which Apple has opened more than 500 locations and hired 70,000 people. The Genius Bar, once renowned for its tech support, has been largely replaced with staffers who roam the stores and are harder to track down. That’s a significant drawback because people are hanging on to their phones longer these days and need them repaired.
In January, Apple Inc. stunned Wall Street, warning that revenue for the holiday quarter would come in well below forecasts, mostly owing to slowing sales of the iPhone. Although weakening demand for Apple’s most important product largely reflects a maturing smartphone market, the problems at the stores weren’t helping. Weeks later, Chief Executive Tim Cook announced that retail chief Angela Ahrendts was leaving and would be succeeded by veteran Apple executive Deirdre O’Brien.
O’Brien, 52, has plenty to work with — and her division remains an object of envy for the beleaguered retail industry. Last year, Apple stores and the accompanying website were responsible for a significant chunk of the $77 billion that the company got from direct distribution channels. As recently as 2017, the retail arm was generating an estimated $5,500 in sales per square foot, easily outpacing rivals. But that’s getting harder to pull off. When Apple reported earnings last month, executives acknowledged resorting to long-shunned retail tactics — such as discounts, cheap financing and generous trade-ins — to goose demand for the iPhone. That’s not a viable long-term strategy.
Read more here.
Jeremy Jones, CFA
Latest posts by Jeremy Jones, CFA (see all)
- Are you Part of the Herd Inflating the Indexing Bubble? - July 19, 2019
- Man vs. Machines: Can Humans Win a New Stock Market War? - July 18, 2019
- Hard Criticism for Amazon’s Advertising - July 17, 2019