When discussing Apple (AAPL) successes, the conversation is usually dominated with talk of the iPhone and iPad, the iTunes store and maybe its top-selling PCs like the MacBook Air. One of the company’s other big wins gets a little less attention: Apple Stores.
Since defying conventional wisdom by launching its own branded retail locations in 2001, Apple has opened more than 400 Apple Store locations. Along the way, the Apple Store has influenced store design, spawned copycats and become the most profitable U.S. retailer per square foot. Now the company is going to leverage that influence by deploying its iBeacon location and proximity sensing technology in stores. Expect other retailers to watch, learn and follow.
When Apple announced it was not just opening its own line of retail stores, but targeting upscale locations, the reaction was swift and largely negative. A 2001 article from Businessweek summed up the expectations from retail analysts on how Apple’s venture would turn out: “I give them two years before they’re turning out the lights on a very painful and expensive mistake.”
Despite the skepticism, the Apple Store has been a resounding success that has rewritten many of the rules of retail. Minimalist design with extensive use of glass, locating Genius Bars in-store for personal service and choosing to locate in some of the most expensive markets has resulted in Apple leading the retail market in sales per square foot. In fact, the numbers are so good that Apple Stores more than double the sales per square foot of the second-place retailer, Tiffany & Co (TIF). Flagship Apple Store locations like the glass cube in New York have become iconic buildings that attract not just shoppers, but tourists and news cameras.
To launch its new Surface tablets and Windows 8 operating system last year, rival Microsoft (MSFT) took a page out of Apple’s book and began launching its own retail locations — which have more than a passing resemblance to Apple Stores. Meanwhile, reports have Google (GOOG) mulling its own plans for stores to sell its growing line of devices.
Apple has proven to be a canny retailer, and where it goes, other retailers have learned to follow.
Quietly introduced as part of the company’s new iOS 7 mobile operating system, iBeacon is a Bluetooth technology that allows retailers to pinpoint a shopper’s presence within their store (or nearby), track their movement and push notifications to their iPhone.
Deployment requires tiny broadcast devices that are inexpensive and battery-powered, and have a range of up to 160 feet. Use of iBeacons has huge potential for retailers — think capabilities like pushing a special offer to a shopper who walks past a product or passes by the storefront in a mall.