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How Retail Keeps Apple Inc. (AAPL) Stock a Serious Buy

I read something the other day about Apple Inc. (NASDAQ:AAPL) that was so different from everything written about the company’s success; I now wish I had saved it on my computer to share it with readers. It was that illuminating.

aapl stock
Source: Shutterstock

The essence of what the writer was saying is that the most significant innovation at Apple wasn’t the iPhone, iPad, or iPod; it was the iStore. No, they don’t call it that but maybe they should. Retail played a significant role in Apple’s transformation from just another tech company to the iconic brand that it is. 

You can get all bent out of shape about poor iPhone 8 reviews or the delays in the iPhone X production, but at the end of the day, it’s Apple’s retail stores you ought to be paying attention to because that’s what drives the entire business.

What’s Angela Ahrendts Up To?

It’s been four years since the retail executive was hired away from Burberry to replace Ron Johnson—John Browett served a brief stint in between the two—who left for a disastrous job at JC Penney Company Inc (NYSE:JCP).

Steve Jobs understood the idea of consumers wanting to experience things long before today’s millennials and Gen-X’ers.

“You’ve got this experience generation coming up: Millennials, Gen-X’ers, they want to experience things,” former Apple executive George Blankenship, who was hired by Jobs to open the first 165 Apple stores between 2000 and 2006, said recently. “They’re [real estate developers] moving toward that direction to make the shopping mall an experience place where you want to go. When you get there, what you wanted to do, is there to do.”

Like most things, Jobs saw the bigger picture. He knew by AAPL having its own retail stores it could tell a better story about its products while thoroughly engaging customers.

It used to be when retailers were looking for new store locations, especially those with higher price points, sought out malls or shopping districts that had an Apple store and, if possible, tried to get a lease near it.

Ahrendts’ new concept will only increase that desire to be close by.

AAPL and the Town Square

While there’s been vocal criticism of Apple’s attempts to capture the imagination of shoppers everywhere by transforming its stores into town squares; I find it refreshing to see Ahrendts and the rest of Apple’s retail team not resting on their laurels, a trait Eddie Lampert’s got down cold.

Go into most retail stores today and despite attempts to be technologically forward, the staff is almost ineptly incapable of carrying on a conversation with shoppers. 

“We think of Apple retail [stores] as Apple’s largest products,” Ahrendts said in September at an event unveiling the company’s newest technology. “It’s funny, we actually don’t call them stores anymore. We call them town squares because they’re gathering places where everyone is welcome.”

This entire quote reflects Steve Jobs’ original vision for its retail stores. Apple’s not just selling products and services; it’s actively inviting itself into your life, the hallmark of any good relationship.

Cynics might not agree but retail is much better off as a result of Apple’s retail efforts—and more importantly, Apple’s better off.

Bottom Line on AAPL Stock

Ahrendts can’t control what products come down the pike at Apple—that’s Tim Cook’s job—but she can influence how Apple customers perceive it.

We are the live version of Apple Music, we are the live version of that app store,” Ahrendts said before the Oct. 20 opening of its newest flagship town square on Michigan Avenue in Chicago.

With almost 500 stores worldwide and sales per square foot of $5,546, what it does here is arguably more important than the success or failure of the iPhone 8.

Apple’s going to have duds from time to time; every successful company does. Long-term, my guess it will have more wins than losses, but if it doesn’t have fantastic retail, the whole business model falls apart.

Ahrendts and Cook get that. 

As of this writing, Will Ashworth did not hold a position in any of the aforementioned securities.

Article printed from InvestorPlace Media, https://investorplace.com/2017/10/aapl-stock-retail-buy/.

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