Despite compounding challenges amid the Covid-19 pandemic, Apple is benefitting from the accelerating digital transformation. We rely on Apple products like never before; however, it has never been more challenging for Apple customers to discover, purchase, and set up Apple products.
Experimenting throughout Covid-19
Retail stores have long been one of Apple’s most important assets. During the pandemic, that asset has become a liability. Nearly a year ago, it became clear to us that Apple had assumed a leadership role in the global response to Covid-19. The company was among the first retailers to close the doors of all 511 locations around the world. Now, even as Apple has reopened all of its 270 US stores, it’s also clear that Apple stores will never be the same.
Retailers are experimenting because they know that customer expectations have changed — not just during the pandemic, but permanently. Ecommerce adoption has accelerated. Crowded retail stores are less appealing. Consumer behaviors have changed, and Apple is adapting:
- Target recently announced a partnership with Apple to launch new Apple retail experiences at 17 Target stores across the country, with more coming in the fall.
- Apple has been quietly offering free delivery with device setup through Enjoy, a Loup portfolio company, in the Bay Area, Los Angeles, and Dallas-Fort Worth, bringing the Apple retail experience directly to the customer.
- Apple also offers express courier delivery for $9; free two-day shipping with free returns is also an option.
- The company recently shut down the (likely underperforming) Apple Uptown store in Minneapolis following the Covid-related closure. An ‘n of 1’ here in our neighborhood, but it appears Apple is moving into a phase of reducing its US store count.
- In our experience, Apple has added friction to the Apple store experience by requiring reservations, making stores safer and driving consumers online.
A radical idea: keep the team, change the stores
Apple realizes that the future of the Apple store is more distributed. Their stores had grown to be tourist destinations capable of welcoming hundreds of guests. We expect those stores to increasingly focus on service and support, and less on direct sales.
Inside the stores, Apple has an opportunity: align Apple stores with the future of retail. We believe that the future of retail lies in three different types:
- Online shopping
- Automated brick & mortar
- Empathetic retail
Today, the Apple store lives somewhere between empathetic retail and automated brick and mortar. But Apple’s retail strategy often applies an empathic approach, when a faster, more convenient approach is appropriate. For example, a guest may talk with two or three different team members and wait in two different queues to buy a pair of AirPods sitting right there on the shelf. It takes too long and little value is added.
For service, support, and consultation, few retailers do it better than Apple. This is empathetic retail. In our view, Apple should retain the Apple stores as a convenient place for consumers to get help with Apple products. Yes, continue to sell the same or similar products, but focus the stores on what they do best: a service-oriented experience.
Bring the Apple store to the customer
Delivery options like Enjoy are superior for the customer and for Apple. Customers using Enjoy get free delivery, device setup, activation, plus the option to buy additional Apple products and services. Apple benefits from improved customer satisfaction and higher average order value.
Enjoy delivers on speed and convenience without sacrificing the experience, blending online shopping and empathetic retail. In the new paradigm, shoppers will have even less patience for waiting around a store when all they want is the product. Enjoy, in combination with other delivery options for various consumer needs, is a better approach than trying to retrofit Apple stores for a post-pandemic world.
Just as Airbnb turned the home into a hotel, Apple and Enjoy have turned the home into a store.
We’re optimistic on the future of Apple retail outside the Apple store. A new chapter in retail will soon be written, and it will undoubtedly include new ways to delight customers wherever they want to shop.