Apple’s New Retail Chief Knows Something About Style

Discussion
Oct 15, 2013

Apple announced late yesterday that it has hired Angela Ahrendts, CEO of Burberry, to oversee "the strategic direction, expansion and operation" of its retail and online stores. Ms. Ahrendts will join Apple in a newly created senior vice president position next year.

"I am thrilled that Angela will be joining our team," said Tim Cook, Apple’s CEO, in a statement. "She shares our values and our focus on innovation, and she places the same strong emphasis as we do on the customer experience. She has shown herself to be an extraordinary leader throughout her career and has a proven track record."

Mr. Cook’s reference to customer experience may point to issues with Apple’s previous retail head, John Browett, who joined the company from Dixons in the U.K. Shortly after joining Apple, Mr. Browett began cutting costs and reducing employee hours, a move that appeared to be in direct conflict with the company’s culture of customer service.

In an interview with The Telegraph, Mr. Browett said, "I just didn’t fit with the way they ran the business. It was one of those shocking things where you’re rejected from an organization for fit rather than competency."

Under Ms. Ahrendts, Burberry has seen sales more than double, according to Bloomberg News, as the company expanded into new markets and developed its digital strategy.

In a statement to announce her hiring, Ms. Ahrendts said she was looking forward to working with Apple’s "global teams to further enrich the consumer experience on and offline. I have always admired the innovation and impact Apple products and services have on people’s lives and hope in some small way I can help contribute to the company’s continued success and leadership in changing the world."

What challenges will Angela Ahrendts face as she takes over Apple’s retail stores and e-commerce operations next year? Will her luxury fashion background help or hurt her as she moves to Apple?

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17 Comments on "Apple’s New Retail Chief Knows Something About Style"


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Matt Schmitt
Guest
8 years 7 months ago

Burberry has had an impressive run of late, with a savvy approach to leveraging digital.

While Apple’s choice may seem to some to be a 180 degree reaction to the negative experience brought on by their previous choice, I think Angela Ahrendts will prove to be a good fit – a strong retail leader with a proven track record of lifestyle branding and digital execution.

W. Frank Dell II, CMC
Guest
8 years 7 months ago

The challenge will be from Apple’s historic roots. Customer service is from a knowledge base first and products second. The high gross margin provides for this service, much like luxury apparel. Like most tech-based companies, the loyalty is to the company, not the job.

The greatest challenge will be to keep growing store sales should there be a slowdown in new product introductions. The second challenge will be international expansion into different cultures. So far Apple Stores are a real winner; how does one build on that?

Paula Rosenblum
Guest
8 years 7 months ago

Boy, after my absolute enthusiasm over Ron Johnson’s prospects at Penney, I’m a bit hesitant to enthuse, but enthuse I will.

Apple stores have lost a step, and Apple seems to be having an overarching identity crisis. If I look to the short term, I expect to see the stores re-solidified as a destination location. Burberry uses tech to sell its products rather than just selling tech. I expect to see the same.

Also, we’re about to enter an era of wearable technology. Google glass isn’t sexy, but at some point, sexy wearable tech is going to emerge. Who better than to shepherd in that era?

Very exciting.

Dr. Stephen Needel
Guest
8 years 7 months ago

Who didn’t think, after reading this, of Ron Johnson and JCP as the identical situation in reverse, and wonder?

Robert DiPietro
Guest
8 years 7 months ago

The most daunting challenge is to bring the in-store excitement back. It was primarily driven by new product launches (which have dried up) and a unique store experience (which was quickly copied by MSFT).

The good news is, her luxury experience will help. The Apple Store experience isn’t about labor efficiency and operational soundness. It’s about one-on-one with the customer by associates who are fans of the brands. They need to refresh that store experience and maybe a store remodel, and a new prototype is on call.

Carol Spieckerman
Guest
Carol Spieckerman
8 years 7 months ago
A couple of months ago, a reporter asked me who I thought would be a great choice to head up Apple retail. I blurted out Angela Ahrendts and quickly followed up with the disclaimer that she would never take the role. What a forward-thinking move from Apple and fascinating challenge for Ms. Ahrendts. Tech IS fashion these days (largely thanks to Apple) and Ahrendts is a rare left-brain/right-brain talent who will bring fresh thinking to Apple’s retail effort. I also have to believe that this role could put her on the CEO track at Apple. Under Ahrendts leadership (in partnership with Christopher Bailey), Burberry became a standard bearer for the luxury industry in the digital space even as its competitors stayed stuck in a myopic, store-centric rut. Ahrendts pulled off a tricky balancing act by reining in brand-killing licensing programs, then carefully re-democratizing the brand by sharpening price points, offering runway-to-living-room access to its collections, and turning its stores into interactive and welcoming entertainment spaces. This will be so fun to watch. P.S. Christopher Bailey’s… Read more »
Gordon Arnold
Guest
8 years 7 months ago

Many of the resources Ms. Ahrendts had in her previous position will not be available in any of her attempts to expand Apple’s e-commerce business. The high-end clothing retail business is constantly nourished with designer product change brought on by work and play needs for the four seasons, special events and more, year after year. Apple is in no way connected to this and has no vendors to leverage or rely on for help with new and exciting product.

Going global will work for Apple’s near future, but we are seeing a tremendous amount of pressure from the competition pulling more and more market share from Apple by lowering prices and improving products.

The next generation of electronic consumer gadgets will place smartphones and today’s tablets in the dumpster quickly when they arrive. All of Ms. Ahrendt’s marketing prowess will not stop this inevitable event in the near future. It is therefore much more important for Apple to reinvent the way we communicate than it is to plan sales for the next high fashion electronic buggy whip.

Lee Kent
Guest
8 years 7 months ago
Oh boy, how do I say this…if I look at Apple as a retailer first, then the addition of someone with that luxury retail background and lots of experience is surely a plus. The problem is, I don’t look at Apple as a retailer first. They aren’t! They are a manufacturer/developer. Sure Angela Ahrendts can retool the stores to enhance the customer experience but Apple has to develop new products in order not to get stale. This doesn’t mean releasing an upgrade to their already existing phone with a new user interface that is really not all that pleasing to many. Microsoft didn’t make it big because they created new operating systems every year. They made it big because they put the entire office experience in a box and made it easy then took over the lions share of offices. Once you’ve invested in the office platform, the cost to exit just gets higher and higher. What say you? Apple put the user experience in a phone and grabbed the lions share of people, didn’t… Read more »
Kathleen DesMarteau
Guest
Kathleen DesMarteau
8 years 7 months ago

She is a logical choice given her track record for rekindling and bolstering the Burberry brand. Apple must recognize that it has challenges similar to those previously faced by Burberry. However, I’m not sure a high-end retail environment is the future for mobile devices vs. a bargain environment (dispensers, etc.). Her people skills, globally, and ability to adapt to changing market will make all the difference.

Karen S. Herman
Guest
8 years 7 months ago

Understanding the Apple ecosystem that defines boutique tech retail will be one challenge for Ms. Ahrendts. This ecosystem is steeped in superior customer service and minimalist retail design that displays products in a manner that engages and educates consumers. These consumers like to stay and play en masse in-store, thereby creating a community;
this is a very different in-store experience than shopping at Burberry.

Ms. Ahrendts’ digital strategy with Burberry in reinventing the luxury brand online and through social channels as well as her experience in expanding the brand in China should prove to benefit Apple. Her fashion experience should be a key asset as Apple moves to bring the iWatch to the marketplace.

I join Carol in applauding this move by Apple and also think it will be fun to watch how she moves the company forward.

Phil Rubin
Guest
Phil Rubin
8 years 7 months ago

Clearly Apple is a tough culture and presumably Apple did a better fit-check this time around with Ms. Ahrendts. She has an impressive track record, at Burberry and before. Equally important, Apple’s clearly lost a step in terms of its brand and its retail customer experience while competitors have been gaining ground.

Apple’s core strength is the customer experience delivered through its products, namely their design and the operating system. It is not a customer centric company and in order to regain or extend its dominance, this has to become integral to its retail strategy.

Liz Crawford
Guest
8 years 7 months ago

Brilliant!

Lee Peterson
Guest
8 years 7 months ago

Here’s the thing; she’s from Indiana. To me, that means she’s got a great shot at making Apple retail even better. Nothing’s worse than hiring someone with primarily Euro or Aussie experience to run an American retailer (wherever the stores are located). Just ask Tesco. Accents only get you so far from the great interview, but good old Midwestern how-to can take you all the way. Right, Amelia?

Mike Osorio
Guest
Mike Osorio
8 years 7 months ago

This is a brilliant choice. Ms. Ahrendts is one of the top calibre CEOs of her generation and gets the balance between art and commerce so necessary in luxury branding and retailing.
The challenge will all be related to product development, although I don’t think it will be long before she helps shepherd that along as well as the customer experience in store and online.
BRILLIANT!

Jerry Gelsomino
Guest
8 years 7 months ago

Burberry is luxury fashion, Apple is innovation in workspaces and communications that initiates fashion. I don’t know what Ms. Ahrendts has done for Burberry, but I think I know what Apple needs and it’s to continue to break the rules of retail. Can she do that?

Brian Kelly
Guest
8 years 7 months ago

Apple is in a tough spot. Its OS, design and mobile leadership are all losing their first-mover advantage.

Its problem is not retail. However in retail, it does have a challenge as Apple’s customer relationships have evolved. Nurturing existing brown goods customers is lots different than pushing absurdly priced, tony handsets. It is also different than pushing absurdly priced tartan rag goods.

Apple’s revenue is $156B, Burberry’s $3B. Apple has 406 doors, Burberry 473. Apple’s retail relationships via wholesale are myriad and byzantine.

Ms. Ahrendts will be scrambling for a while, but as we like to say “retail ain’t for sissies.”

Rory Dennis
Guest
Rory Dennis
8 years 7 months ago

This move by Apple could have a ripple effect in how other brands and retailers treat the omnichannel experience. I would expect Ms. Ahrendts to spend time revamping Apple’s in-store experience, which is still popular but maybe a bit stale. Her experience turning an established brand on its head online and shaking things up is also intriguing Apple has always been an innovator, of course, but how will Ms. Ahrendts refresh Apple’s online image? Finally, if there’s one thing this hire proves, it’s that retailers are at the leading edge of how to engage consumers online. A tech giant like Apple turning to a retail brand for new and fresh ideas is an extremely strong indicator that retail is making omnichannel critical for all brands.

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