Apple opens invisible hangout in Chicago

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.
"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

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

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

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

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

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

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

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
4 years 8 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

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

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

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
4 years 8 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

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

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

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

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

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
4 years 8 months ago

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

Ed Dunn
4 years 8 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
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
4 years 8 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

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.

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

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

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 experien