Apple’s Ahrendts sees a ‘bigger purpose than just selling’ for retail

Discussion
Photo: RetailWire
Jun 21, 2018

Apple’s stores generate more sales per square foot than any company in retailing. There has been a variety of reasons for that success over the years starting with products such as the iPhone and services such as iTunes that have changed the way consumers use technology in their daily lives.

Success, according to Angela Ahrendts, the leader of Apple’s retail business, also has a lot to do with how people who work for the company see its role. “Apple,” she told an audience at Cannes, “is in the human business. It’s our job to humanize technology.”

Ms. Ahrendts, who left her job as CEO of Burberry in 2014 to join Apple, views the company’s stores as community hubs and not simply places to buy tech. Associates in the more than 500 stores Apple now operates globally are trained to focus on sharing with customers how technology can enrich their lives rather than selling them products. Individuals who work in Apple’s stores, according to a 9to5Mac report, are hired based on empathy, and the company measures the human connection.

For those who believe brick and mortar retailing is headed in the same direction as dinosaurs, Ms. Ahrendts disagrees.

“The smart outside guys, they don’t say retail’s dying,” said Ms. Ahrendts, according to Apple Insider. “They say digital’s going to grow at three times the rate of physical. But in the next five years … 75 percent of the people will shop online — shop — but 75 percent of the business will still be done in physical stores.”

“And so, retail’s not going away, retail’s not dying,” she added. “But it has to evolve, it has to continue to move. And I think it has to serve a bigger purpose than just selling.”

DISCUSSION QUESTIONS: Do you agree with Angela Ahrendts that retailers need “to serve a bigger purpose than just selling” to achieve success? Do most retailers consider empathy when hiring customer-facing associates? Do they measure this personal quality as part of an associate’s job performance after they are hired?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Embedding 'purpose' in everything you do is critical to the long-term sustainability of business. "
"How much more fulfilling is the experience for employees when they’re enriching lives vs. selling things? "
"The role of the store is changing in line with customer expectations, e-commerce and new channels. It’s no surprise that Apple is ahead of the curve."

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30 Comments on "Apple’s Ahrendts sees a ‘bigger purpose than just selling’ for retail"


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Bob Phibbs
BrainTrust

You walk in and someone who has a tablet asks what you’re looking for, then calls someone else with a tablet to explain. Marketing does the sales job for Apple, you already drank the Kool-Aid before coming in.

And frankly, with the number of iPhone Xs sold in the first quarter of 2018 sliding to 60 percent, down from 78 percent, I would think Ahrendts should be looking at how to sell their merchandise; empathy only gets you so far.

Art Suriano
Guest
I agree with Angela Ahrendts’ opinion of retail and why Apple is successful. Apple does have some advantages because of what they sell, but many retailers can learn a lot from them. Regardless of their product(s), Apple has successfully provided an atmosphere that is 100 percent customer-centric. They don’t have pushy sales associates but rather friendly ones who are content with you visiting their store, checking out products and asking questions whether you’re buying or not because Apple knows that as long as the customer comes in to visit, they will buy something at some point. Apple has a considerable following and knows how to “wow” their customers which is why they are successful. Look at the number of associates per store. You wait less when you are buying, someone can ring you up on their iPad and in minutes you have what you need. These conveniences only make shopping at Apple better. Retailers need to look at Apple and see what how they could include some of those concepts in their stores. The problem… Read more »
Michael La Kier
BrainTrust

People’s expectations (as purchasers, consumers and investors) have been raised. Businesses must operate with multiple goals in mind, not just with a focus on the almighty dollar. Embedding “purpose” in everything you do is critical to the long-term sustainability of business. This is not just a trend, but a macro-force that will shape the relationship between businesses, shoppers and consumers for decades to come.

Paula Rosenblum
BrainTrust
It’s a more interesting question than it might seem on the surface. It’s easy to say “heck no … corporations exist to increase shareholder wealth, and that has nothing to do with higher purposes” but the times are changing. Stores really CAN act as a community hub, and that’s very desirable and will ultimately help their top lines. We at RSR believe community is a key part of today’s selling process. We have seen retailers like REI and Patagonia actually taking a stand in their communities. Ditto with Costco and The Container Store. The former stand for helping the environment and encouraging people to move around instead of just sitting in the house. The latter stand for being really respectful to all their stakeholders, including and especially their employees. Both are important. So while Apple’s iPhone X sales may be down (what were they thinking? A thousand-dollar phone for the mass market?), there is absolute truth in needing to be enmeshed in the community. None of this implies that Apple is “humanizing technology” and that… Read more »
Bob Amster
BrainTrust

Not surprising coming from a company that was an innovator of retail operations and retail concepts. It is also true and many have been talking about it. Most retailers do not hire correctly because they are stale, or they are too large to have enough qualified applicants, or because they don’t want pay what it would take or because their associate training programs are not up to the task. This is an area of great potential for both retailers and for those who would train retailers on how to hire and train.

Lyle Bunn (Ph.D. Hon)
Guest

We can all agree that retail needs to have a bigger purpose than selling, but in reality it is singularly focused on selling, supplying and recurring revenues. If the store is not generating sufficient revenue it will be closed. All the ways that the retail space is used and how retailers operate, including associate selection and training, simply contribute to the core goal of sustainable revenue growth.

Neil Saunders
BrainTrust

Angela Ahrendts is simply saying that retailers need to add value to survive. For some — like the phenomenally successful dollar stores — this value is about convenience and ultra-low prices. For others, with higher price points, the value has to be somewhere else — in service, in exclusive products, in solving issues that the consumer has and so on.

For Apple, the added value comes in how people use and engage with their products. As such, stores reflect this: they are places of learning, discovery and of experience. The more Apple immerses people in its brand and products, the more likely they are to be loyal and see value in what Apple is offering.

That said, there are some downsides. The lack of registers causes stress for some customers, especially when the store is busy and it is hard to find a free Apple associate. Moreover, Apple’s technology updates are becoming more incremental and less revolutionary — that’s slowing the sales cycle and will eventually impact store performance.

Bob Amster
BrainTrust

The phrase “lack of registers causes stress” raises a similar question: How much stress will cashless commerce cause?

Neil Saunders
BrainTrust

That’s an interesting question! We have not done much qualitative research into concepts like Amazon Go. However, we have looked at Apple’s model and found two pain points:

  1. Some customers dislike the lack of a focal point where they can go and pay or ask for customer service. The stress comes from having to walk around and find someone free to interact or engage with.
  2. When it comes to self-buying and paying for things like accessories with an iPhone, many customers feel uneasy/guilty about walking out of the store with the product — even though they’ve paid for it! Many said that it is convenient but doesn’t seem right or natural.
Bob Amster
BrainTrust

Humans! Go figure out what makes them happy or sad, stressed or elated. I laughed when I read your second point!

Chris Petersen, PhD.
Guest

Since Steve Jobs opened the very first Apple store, Apple has been disrupting and reinventing not just retail, but customer experience. While customer experience may serve a larger purpose, the remarkable thing about premier experience is that it brings people back and that’s where they choose to buy more. Apple doesn’t sell … they help customers to buy through experience.

Max Goldberg
Guest

Retailers are, or should be, selling an experience. Apple does this better than most. They accomplish this with great products, inviting stores, and knowledgeable, empathetic sales associates. Many consumers come to Apple stores for help with their products. Apple delivers that assistance, often for free. What better way to build loyalty?

Lauren Goldberg
Guest

Retailers need to be focused on solving customers’ problems, not strictly “selling.” In most situations, the customer’s problem can be solved by purchasing a specific product. But in other situations, retailers can assist by fixing or suggesting another product or service. If a customer feels like the retailer has helped them add value to their lives, they will continue to show their loyalty and shop with them.

Apple does a great job in this area — they really focus on the customer needs and empower their associates to take care of the customer. I had a personal experience recently at an Apple store where I went in planning to spend $50 on a specific adapter for my computer. The associate that was working with me helped solve the root cause of my problem without a purchase that day. That experience really strengthened my loyalty towards Apple.

Mohamed Amer, PhD
BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
3 years 11 months ago
Put simply, to be successful over the long term companies today need to differentiate along a new set of dimensions than the ones that had worked in the past. Retailers and any consumer-facing companies are operating in a very different business environment in which the means of differentiation go well beyond traditional item, packaging, pricing and promotions. Even from a macro level, harnessing speed or being a low-cost provider are necessary as strategic prongs but aren’t sufficient by themselves. Companies need to help their customers connect beyond strict transactional reasons and answer a more compelling “why.” Why should the customer associate with your brand or commit time and money to your stores or website? The level of consumer sophistication, massive access, transparency and the sharing of information, are changing the equation of what “selling” has become today and how it will change even more tomorrow. No company can survive if it doesn’t generate revenue through sales or services; how it does that is what’s changing and it’s disrupting more than the classic sales process, it’s… Read more »
Jeff Sward
BrainTrust

“Why?” is my favorite question. And it’s not answered succinctly very often. But when it is well answered you are on the way to creating a true bond with the customer.

Mohamed Amer, PhD
BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
3 years 11 months ago

So true, Jeff! It may be the most strategic question for any company/board once they define the business they’re in.

Jeff Sward
BrainTrust

I just spent a year consulting in China and in my parting meeting with the CEO he asked my opinion on what he should focus on in the coming year. I answered with one word — “why?” He looked puzzled as though something went amiss in the translation. I continued with, “You’ve grown from one store to over 2,400 out of sheer force of will and operational excellence. The business is overdue in answering the ‘why?’ question in the relationship between customer and product.” A couple of seconds passed. Then I saw a big smile telling me he totally understood what I was trying to say.

Mohamed Amer, PhD
BrainTrust
Mohamed Amer, PhD
Independent Board Member, Investor and Startup Advisor
3 years 11 months ago

Thanks for sharing!

Gene Detroyer
BrainTrust

Ahrendts is absolutely correct. A customer becomes a customer by the retailer building connections and relationships. It is a long-term investment for a long-term relationship. The sales will take care of themselves.

Straight “selling” might give the retailer one sale then the customer is on to the next retailer.

Jeff Sward
BrainTrust

“Purpose” is hopefully embedded into the brand promise somehow. If your product or brand doesn’t have purpose then some other similar product or brand will, and thereby have a better shot at connecting emotionally with the customer.

Ray Riley
BrainTrust

This will be one of my shortest responses because there’s been great coverage.

Yes there HAS to be a bigger purpose, and their folks on the front-line have to maximize that. Unless you need a device same-day, why else go buy any Apple product when there’s virtually no customization offered in-store? You can buy it through the Apple app, pay with Apple Pay and have a drink in the other hand!

Sterling Hawkins
BrainTrust

How much more fulfilling is the experience for employees when they’re enriching lives vs. selling things? That deeper intention flows through to the customer experience and it’s a large part of what makes the Apple retail experience so attractive. The end result of selling products might be entirely the same, but how retailers arrive there makes all the difference.

Adrian Weidmann
BrainTrust

“…But in the next five years … 75 percent of the people will shop online — shop — but 75 percent of the business will still be done in physical stores.” Ms. Ahrendts’ point is insightful and compelling. While people “shop” online in ever increasing regularity, most “business” will still be transacted in a physical store environment with people. It is worth noting and understanding the definition of “shop,” “retail,” and “business” in the context of being digital. This understanding will lead to designing an inspiring community retail environment relevant for today’s and tomorrow’s community of digitally-empowered shoppers and customers.

Cate Trotter
Guest

I don’t think Ahrendts is saying anything new. I think we’ve been talking about the need for stores to be more than places where staff try to give you the hard sell for a while. The role of the store is changing in line with customer expectations, e-commerce and new channels. It’s no surprise that Apple is ahead of the curve with this, but plenty of other retailers have been transforming their store strategy. Staff are an important part of this — finding the right people in the first place and then training them well.

Craig Sundstrom
Guest

Of course, this calls to mind Charlie Revson’s remark that they didn’t sell cosmetics but “hope”… it seems ominous that we even need to debate the issue.

That having been said, and at the risk of shooting the messenger, I’m sure the average retailer grimaces at hearing a lecture from Apple, whose cult-like following would be hard to duplicate for, well practically everybody.

Doug Garnett
BrainTrust
3 years 11 months ago
I’m concerned for Apple. Ms. Ahrendt’s comments reflect “business as usual” for a retailer these days — lots of warm words about purpose and rising above product with little substance in them. My last experience in an Apple store shows that they’ve fallen badly from a few years ago. That said, “just selling” minimizes a very big thing. My time as a salesman taught me how many things are involved with selling — goodwill, likability, reminding people of all kinds of value or emotion connected with the products, etc. My time as a salesman also taught me that if we focused ONLY on those things, the deal is lost. There are a lot of things that work in service of selling more product. But don’t ever lose the focus: they are there to help sell the product. And wrapping back around to my most recent store experience … I think Apple had better hiring when they didn’t overtly make a big deal of searching out “empathy” because their staffing is less effective than it was… Read more »
Ricardo Belmar
BrainTrust
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
3 years 11 months ago
Apple is a luxury brand, and it is every luxury brand’s aspiration to become more than just a product or more than just a store for their customers. They each want to claim to make their customers’ lives better and enriched in a meaningful way. Does this mean every brand should share this aspiration? Maybe. I’m not sure you could argue a dollar store views themselves this way. They might sum it up as “bringing value to our customers every day” or something similar. In some ways, what Ahrendts isn’t telling us anything new — retail is absolutely about creating shared experiences with customers to establish a long-term relationship. Apple does this far better than most brands today. It is interesting to see “empathy” identified as an important trait for their store associates. Most retailers likely only look for “good salespeople” and fail to realize the important effect the associates have on sales overall. Whether Apple successfully measures empathy in their associates or not isn’t the important fact here — it’s that they realize this… Read more »
Chris Buecker
BrainTrust

Absolutely. It depends what you sell but generally I agreed. Retailers needs to develop a unique seamless experience along the customer journey. We can see at many retailers that associates are not really motivated or knowledgable enough to offer a good service or advice. It is also a question of salary. You pay less, you get less quality. It is as simple as that. A very good example of motivated and customer-oriented associates are employees at IKEA. As customer, you can see and feel that the associates have not just a job at the furniture giant. Each associate is part of the IKEA community and team and share the company values. It is the same with the Apple sales associate. They becomes a strong advantage for the company, as they are the ultimate contact person to the customer.

Bill Hanifin
BrainTrust

The role of the retail store must continue to evolve and focus on sharing information, educating on the products and services sold, and providing service and support. Humans still have a need for face-to-face interaction with others and the ability to touch, feel, trial, query, and get support builds confidence in a particular product. That confidence translates into multiple purchases over time and higher brand loyalty.

Apple is correct to adapt their hiring practices to focus on those who can deliver on a personal level and communicate care and empathy. Let’s not forget however that anytime we use Apple, Amazon, Walmart or Starbucks as an example for others to follow, that these are power brands with far more resources and brand magnetism than is available to most retailers.

The tricky part of these conversations is not whether Apple is doing it right, they are, but what part of their execution can be adopted by other retailers with a smaller resource pool and more mundane brand presence.

gordon arnold
Guest

What Apple sells is ease of use in an extremely complicated mixture of hardware, software and communication environment. Their keen insight into what is necessary to bring unsophisticated users the highest levels of leading proven technologies. Couple this with a daring exploitation of new and even undiscovered technologies while simultaneously building consumer interest into demand and taking demand into a frenzy where price is no longer a consideration. Grocery stores, clothiers and other market flooded commodity retailers have nothing to learn here to bring them into the established 21st century. Their vision is to expand market share using practical access at a competitive price. Specific focus should be on making improvements that drastically reduce out of stocks, creating visible and willing assistance and addressing store/site appearance and cleanliness needs.

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Braintrust
"Embedding 'purpose' in everything you do is critical to the long-term sustainability of business. "
"How much more fulfilling is the experience for employees when they’re enriching lives vs. selling things? "
"The role of the store is changing in line with customer expectations, e-commerce and new channels. It’s no surprise that Apple is ahead of the curve."

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