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


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.”
- Cannes Lions – Twitter
- Angela Ahrendts discusses humanizing technology, Today at Apple, more in Cannes Lions interview – 9to5Mac
- Apple retail head Ahrendts talks demise of retail, ‘human business’ at Cannes Lions – Apple Insider
- Why is Apple dropping ‘Store’ from the name of its stores? – RetailWire
- Apple opens next-generation stores – RetailWire
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?
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30 Comments on "Apple’s Ahrendts sees a ‘bigger purpose than just selling’ for retail"
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President/CEO, The Retail Doctor
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.
Chief Executive Officer, The TSi Company
President, What Brands Want, LLC
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.
Co-founder, RSR Research
Principal, Retail Technology Group
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.
Strategy Architect – Digital Place-based Media
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.
Managing Director, GlobalData
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.
Principal, Retail Technology Group
The phrase “lack of registers causes stress” raises a similar question: How much stress will cashless commerce cause?
Managing Director, GlobalData
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:
Principal, Retail Technology Group
Humans! Go figure out what makes them happy or sad, stressed or elated. I laughed when I read your second point!
President, Integrated Marketing Solutions
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.
President, Max Goldberg & Associates
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?
Principal, LSG Marketing Solutions
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.
Independent Board Member, Investor and Startup Advisor
Founding Partner, Merchandising Metrics
“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.
Independent Board Member, Investor and Startup Advisor
So true, Jeff! It may be the most strategic question for any company/board once they define the business they’re in.
Founding Partner, Merchandising Metrics
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.
Independent Board Member, Investor and Startup Advisor
Thanks for sharing!
Professor, International Business, Guizhou University of Finance & Economics and University of Sanya, China.
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.
Founding Partner, Merchandising Metrics
“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.
Chief Executive Officer, Progress Retail
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!
Co-founder, CART
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.
Managing Director, StoreStream Metrics, LLC
“…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.
Head of Trends, Insider Trends
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.
CFO, Weisner Steel
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.
President, Protonik
Retail Transformation Thought Leader, Advisor, & Strategist
Founder & Chairman, International TCG Retail Summit
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.
CEO, Hanifin Loyalty LLC
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.
sales management consultant
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.