Apple opens invisible hangout in Chicago

Discussion
Photo: Apple
Oct 23, 2017

Declared its “most ambitious store to date” and winning raves across tech blogs, the Apple Michigan Avenue store, opened last Friday, is about five blocks south from where the company’s first flagship opened in 2003.

The two-level location costing $27 million — a whopping $1,350 per square foot — is the pinnacle version of its “Town Square” format that positions Apple as a community center and public space where people can gather. Town Square, according to tech bloggers, also differentiates Apple from copycat formats from Microsoft and Samsung.

“Some stores are for selling — actually almost all stores are for selling,” CEO Tim Cook told CNBC at the opening. “It’s actually a small part of what we do in our store. Our stores are about service, supporting customers, being a place where customers can discover and explore our products and education. And connecting. A place where people can connect.”

Positioned next to the Chicago River, the building stands out for its 32-foot glass walls that provide an unobstructed view of the water while bathing shoppers in natural light.

Another unique feature is the thin, 111-by-98-foot curved carbon-fiber roof supported by four interior columns. The Chinese granite floors extend from indoors to the outdoors to blur the distinction between the spaces while lending new access to the riverfront.

Under the guidance of Angela Ahrendts, SVP of retail and former head of Burberry, Apple has added floor-to-ceiling screens to support both education and spectacle while adding wooden tables to replace the familiar white with a warmer look.

Like other Town Square locations, Apple Michigan Avenue features “The Avenue,” a section featuring boutique-like “windows” to display items that change on a seasonal basis. Community and education aspects include an amphitheater-like space for year-round seminars and sessions, a section for business advice and training, and outdoor seating area with free Wi-Fi that is open 24/7.

For 9to5mac, Noah Stahl wrote, “It’s not to sell you hundreds of dollars of merchandise, though that may be a byproduct. Apple’s goal is to educate and to become a staple in the community, and not just by selling tech.”

DISCUSSION QUESTIONS: How important are Apple’s extravagant flagships stores to the support its product lines? Do you still see Apple as a retail experience innovator? How confident are you that Apple’s increased focus on education and community will be paid back in higher sales?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Angela Ahrendts is skillfully tapping into our needs and desires as social beings."
"This isn’t an example of providing an experience, it is an example of reifying a relationship."
"For my opinion, this is a sour Apple. Am I the only one who thinks the emperor may not be wearing any clothes?"

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34 Comments on "Apple opens invisible hangout in Chicago"


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Charles Dimov
Guest

Definitely. Apple completely redefined how tech was sold many years ago. This is another step in that direction. They are focusing on educating consumers and making the experience a positive one that customers want to repeat. It is a completely “pull” sales model. Nice step. This is the core concept behind content marketing as an entire field.

As for the extravagant flagship; when talking B2C, you want a spectacle that consumers will cherish, look up to and want to experience. Focusing on the experience is the key part about which all retailers can learn, and that they can mimic. Make it a great experience that customers enjoy and they will come back for more (and more sales too).

Dick Seesel
BrainTrust

Flagship stores like the new location on Michigan Avenue serve several purposes. First, they reinforce the luxury positioning of new products such as the iPhone X. Second, they offer innovative features that can eventually be rolled into standard-issue Apple stores in malls around the country. Finally (and most important) they reinforce the Apple brand image, just as they have always striven to do.

The Apple store has always been about more than just selling products. Its clean, modern design and ability to interact with both sales associates and the merchandise has been crucial to building brand equity over the years as the company rolls out new products.

Shep Hyken
BrainTrust

Noah Stahl’s comment at the end of the article is spot on. Being part of the community is marketing, PR and makes good sense for a company like Apple. They can afford to do what many other companies cannot. That’s a great advantage, and when that advantage is focused on the customer, the engagement and emotional connection between Apple and their customers strengthens. That turns into more sales down the road. The more you give, the more you get.

Anne Howe
Guest

Apple has a goal to “connect with community” and I think it will pay off in spades. You have to account for brand building as well as sales. Retail has not exactly been a place where all types of people are welcomed to hang out, collaborate, learn and be serviced by willing and able associates. This space changes all that. I’m traveling to Chicago this week and cannot wait to go check this out!

Nir Manor
Guest

Apple continues to support its positioning as offering the friendly, easy-to-use, nicely designed gadgets that make your life easier. The emphasis given to the location and the design of the store reinforce the great design and UX of Apple products. The focus on education and training and the ability to interact with peers within the community strengthens Apple’s leadership position and will definitely support its product lines and its sales.

Max Goldberg
Guest

As Apple continues to drive up the price of mobile phones and computers, it’s important that they convey a luxury experience. This new store does precisely that. It offers consumers a sense of community–a place to belong. Few brands can match Apple in offering such a sensory-rich, educational experience.

Neil Saunders
BrainTrust

A current focus of many technology companies is to create communities for consumers. Association with this ecosystem creates stickiness and makes people more likely to buy the brand’s products and services.

Apple’s latest store formats are part of this. Apple knows purchase frequency for its products is low, so by giving people reasons to visit its stores over and above buying, it can maintain a connection with the brand.

Educating and informing consumers about their devices is also sensible as it allows people to get the most out of technology, which improves value for money perceptions.

That said, Apple’s massive margins and its highly profitable business model facilitate the creation of these expensive showcases. There are not many other retailers that could roll out such a high-cost format without generating a direct return.

Tom Erskine
Guest
4 years 6 months ago

Apple continues to push the rest of the tech industry in the direction it needs to go — positioning their locations as “experience centers” rather than as stores. And they also continue to prove that when you sell an expensive item, creating these experiences doesn’t hurt store performance — it helps. When their sales start to meaningfully decline, I’ll worry.

Jeff Hall
BrainTrust

Apple’s town square flagship stores elevate the brand to a new level of fully immersive, experiential customer experiences. In creating a gathering place first and retail store second, Angela Ahrendts is skillfully tapping into our needs and desires as social beings, placing customers front and center on Apple’s retail stage while letting the products play a supporting role.

Brandon Rael
BrainTrust

Ultimately, while selling products and driving revenues is critical for retailers, flagship stores such as the iconic Macy’s Herald Square, Saks 5th Avenue, Tiffany’s, Cartier and others in NYC, serve as an experiential brand-building playground for the consumer. The perception of luxury and exclusivity is even more important for Apple, and having Angela Ahrendts at the helm of the retail operations helps drive this further along.

Apple has always striven to be the luxury brand in the technology world, and this new showcase flagship will help drive that perception. All of the technology features and functionality are key to Apple, however their success is driven based on the critical perception of quality, luxury, exclusivity, innovation. Now with this store they have another mechanism to build their brand.

Mark Ryski
BrainTrust

Apple’s flagship stores are an important part of the Apple brand. As Cook says, Apple’s stores are about service, support and a place where customers can explore, discover and learn. In this regard, Apple is very much a retail innovator.

However, Apple’s approach to retailing is not something that other retailers can merely copy — clearly Microsoft has failed miserably at trying to do it. Apple stores are three dimensional expressions of the Apple brand — they are more than just amazing structures and, in some cases, breath-taking architecture. Apple’s increased focus on education and community seems like a smart evolution that should play a role in supporting its sales efforts. However, stores alone won’t help Apple continue to win. The heart of Apple’s success is product — especially mobile products that have resonated with consumers like few products ever have. If Apple products fail to meet the exceedingly high consumer expectations they set, beautiful stores alone won’t help.

Kim Garretson
Guest
4 years 6 months ago

It will be interesting to see if Apple brings some of this thinking and innovation to its mall stores in light of the trouble many malls are having with traffic. Of course, this “community” focus is exactly what many malls are doing in response to their customer counts, so I would expect to see Apple’s innovations moving into the malls this year.

Bob Amster
BrainTrust

Flagship stores have been an important part of a retailer’s branding message for decades. Apple knows how to engage and convert consumers as well if not better than most companies. Apple has been a retail innovator since it decided to open its own stores and the stores are improving on the concept of customer experience. The more Apple connects with their customers through these stores the more loyal and committed customers will be to the brand.

Tom Dougherty
Guest

Apple, as a brand, is a destination. The brand transcends electronics and technology because adherents buy into the brand itself. The extravagent stores, as you call them, are in lock-step with the brand itself.

Steve Montgomery
BrainTrust

The new Apple store will not only serve the local market, but will become a tourist attraction here in Chicago. Once people enter they are likely to buy and develop and/or reaffirm their relationship with Apple. Can you ask a location to do more?

Dave Bruno
BrainTrust

Most of the time in this space I evangelize the importance of delivering brand experiences that keep the store relevant. However, in Apple’s case, I think these innovative, communal and engaging store experiences help keep the brand relevant. As they struggle to deliver technology that dominates the zeitgeist as they once did, these stores are playing a key role in reinforcing the things that the brand is built upon.

Naomi K. Shapiro
Guest

For my opinion, this is a sour Apple. Am I the only one who thinks the emperor may not be wearing any clothes? I’ve been an Apple user from the get-go but my recent experiences at Apple stores have been less than satisfying. The “stores” have been busy and crowded, the staff has not been as attentive as one would like, and I have felt pushed around, un-served and neglected … Why should a new glass house called a “community” be any different?

Brian Kelly
Guest
4 years 6 months ago

My experience is the same. Stores are not set up for the mobile market share.

Ed Dunn
Guest
4 years 6 months ago

The credit goes to Foster + Partners for designing another wonderful piece of retail architecture thinking beyond the box. North Michigan Avenue in Chicago has always been a showcase for retailing and community, with retailers such as Nike, AT&T and Sony. Meanwhile, Macy’s in the Water Tower is just another store …

Mohamed Amer, PhD
BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
4 years 6 months ago

Apple’s Michigan Avenue flagship store powerfully states how Apple differentiates from nearly all other consumer experiences. The flagship’s unique architecture, transparency and layout will not only generate the expected public relations buzz, it will become a destination unto itself on fabled Michigan Avenue.

Providing an exceptional space for people to connect, explore and discover supports Apple’s product lines and reinforces customers’ incorporation of the Apple brand into their lives to the point of being synonymous with their own sense of identity. There’s little doubt that Apple approaches the design and innovation of the physical customer experience with the same intensity and passion that it does to the design of its products. This flagship continues to elevate the customer experience to unprecedented levels. Apple’s deep pockets, large customer base and commitment to innovation across their entire business model make it very difficult for competitors to copy and sustain a similar strategy.

Lee Peterson
BrainTrust

IMO, Apple is doing everything right on the physical retail front; creating amazing gathering areas that showcase (rather than sell) product and service. These places are the physical embodiment of where what we now call stores should evolve to in the near future. And yeah, even the semi-gimmick of taking the word “store” out of what they’re called works for me. It gets everyone in tune with the idea right from the get-go. Bravo on all levels.

Camille P. Schuster, PhD.
BrainTrust

We talk about creating customer experience and that retailers need to decide what experience will resonate with their consumers. Providing a place for consumers to connect has been a mission for Apple since the stores opened. This new format is a great example of providing a customer experience that resonates with its consumers. Well done.

Rich Kizer
BrainTrust

This Apple store has created a world of unique experiences and emotions, along with associates ready to help. The ability to walk into this store, to feel the overwhelming sense of class with the new design along with product presentations, and relevant information at the customer’s fingertips, creates a world of emotion. Customers will connect with this store, their associates, and very importantly, the brand and its products.

Ryan Mathews
BrainTrust

It’s all about the brand, and this is a brilliant example of how you make a set of abstract brand promises — style, community, learning, etc. — real. Apple continues to understand that it is individuals who are the most important element in the relationship between technology and individuals and illustrates that by expanding the context of the relationship between its customers and the objects it brings to market. And, I’d modify the question a bit. This isn’t an example of providing an experience, it is an example of reifying a relationship.

Harley Feldman
BrainTrust

Apple’s flagship stores create more of the pizazz that comes with the Apple brand and allows Apple to charge a higher price for its products. They are also desirable places to connect with Apple due to the store uniqueness, especially the new Chicago store.

Apple has been an innovator in retail since the day they opened their first store. The open areas to display and test products and the Genius Bar provide a place for prospective customers to see, test and get help from store associates. This help plus education have provided consumers with the confidence, interest and help in deciding what to buy. This support in the stores results in higher sales since all of the consumers questions can be answered and demonstrations can show the value of Apple’s products. In a local major shopping center, the Apple store is directly across from the Microsoft store. I am sure you can guess which store always has 5-10 times the traffic at any point on the day.

Doug Garnett
BrainTrust
Doug Garnett
President, Protonik
4 years 6 months ago

Apple stores are superb and I’ve spent plenty of time in them. That said, the comments from executives lead me to be concerned.

Apple stores succeeded because Apple products were outstanding AND because many people needed expert store help to assist them — whether choosing product or solving problems. And their physical presence is a constant brand/advertising for anyone going past a store.

This store sounds gorgeous. But executives minimize the role of products for the success of their stores and that is concerning. Ron Johnson’s mistakes at JC Penney suggested he misunderstood the critical role of Apple products in the success of the stores he ran. These comments suggest that Apple’s retail management is continuing those errors.

So great for Apple creating this showpiece. But those of us in the retail business should not presume that the future of retail is creating a “community gathering place.” Apple’s public stated rationale seems unlikely to be the real value of this store.

Ed Rosenbaum
Guest

This is well past impressive even for a flagship location. As for the educational piece, Apple is either a leader or their equipment is so complex people need extra training. I was in an Apple location at 10 a.m. last week. The store was filled with people, most of them needing technical training on how to use their instrument. I give them credit for making their team available to assist the customers. They made our process easy and understandable.

Ralph Jacobson
Guest

The stores are a great, consistent, global branding of the brand. Consumers expect this, and competitors copy it. It works. Keep it up!

Georganne Bender
BrainTrust

You want to talk retail experience? Chicago is my city, and as a store planner, I love that the new Apple store isn’t just another big concrete box. A lot of thought went into the architecture, it really does blend in to a certain extent, allowing the city to shine.

It used to be all about improving the product, now it’s about improving the in-store experience. I hope that in addition to the sleek sales floor, amphitheater space, and the outdoor seating with 24/7 free Wi-Fi, Apple is making accommodations for walk-in customers. My frustration with Apple stores has always been help with immediate need issues. Being told on Monday morning that there isn’t an appointment available until after 6:00 pm doesn’t do it for me. I hope that this cool new concept fires on all cylinders, both physically and customer-wise.

Jett McCandless
Guest

Since they first started catching on, Apple stores have been places people simply enjoyed visiting. Even if they didn’t plan on making a purchase, people would be sure to stop in the Apple store every trip to the mall. While brick-and-mortar retail is becoming less prevalent, I don’t see that impacting Apple stores. People will still go there simply to be a part of the technology culture, and it will drive sales even if those sales don’t occur directly inside the specific location. People like to go play around with technology before they buy it. I also think the community education aspect is unique, and I’m very interested to see where Apple decides to take it.

James Tenser
BrainTrust

As a work of architecture, this new Apple retail space scores both esthetically and as a high concept. It appears compelling as a performance space and it conveys a stunning message about the high aspirations of the brand. But it’s also a conceit — further evidence of a company that has so much cash that it can afford to build monuments to itself. In this respect, it’s hardly unprecedented. Consider the Wrigley building around the corner.

The $1,350/square foot cost of construction seems eye-popping at first – until one compares the reported $5,546/square foot sales generated by Apple retail stores.

Apple is hardly the only prestige brand to erect flagship stores. There are a slew of them spread along N. Michigan Avenue. But its ties to the digital/mobile economy has made it a unique influencer on other brands that began online and have moved into the brick and mortar domain. (Or is that the glass and marble domain?)

Sarah Nochimowski
Guest

Whoa! Now that’s a destination! Big thumbs up for the customer experience, can’t wait to visit it.

Cameron Conaway
Guest

This type of on-the-ground “education and spectacle” serves many purposes, chief among them is “to become a staple in the community,” as Noah Stahl stated.

I think we’ll increasingly see successful e-commerce retailers make similar moves. When your digital competitors all have similar tools, reclaiming the community roots of a brick-and-mortar store becomes a key differentiator.

Additionally, in working closely with the city of Chicago to pull this off, Apple is providing community value in the best possible way: by including the community.

Jeff Miller
Guest

I just finished reading Scott Galloway’s book called “The Four” where he accurately argues that Apple’s biggest strategic win was not the products that we all love but the temples to the brand (Apple Stores) that they focused on when their competitors focused on e-commerce and competing in other channels. The stores turned Apple into the luxury brand it is today. Creating these temples put them on track to be a luxury brand and for them to have the margins of luxury with the supply chain on the opposite end.

These new flagships and their continued investment in the store experience, the geniuses who work at the store and continued focus on education and community will increase brand loyalty and sales.

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Braintrust
"Angela Ahrendts is skillfully tapping into our needs and desires as social beings."
"This isn’t an example of providing an experience, it is an example of reifying a relationship."
"For my opinion, this is a sour Apple. Am I the only one who thinks the emperor may not be wearing any clothes?"

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