business news in context, analysis with attitude

By Kevin Coupe

Apple Computer may be to the likes of IBM, Dell and Compaq what independent grocers and small/regional supermarket chains are to the likes of Wal-Mart.

And while it admittedly isn't a perfect metaphor, a visit to the Apple Store - one of the newest in the fleet, and certainly the biggest - suggests that there is a lot that food retailers can learn from the computer retailer/manufacturer.

In addition to MorningNewsBeat, we also contribute longer pieces to a number of magazines; it gives us the opportunity to ponder big issues in an environment less pressured than the everyday deadlines of our usual venue.

Through the gracious assent of the editors and publishers of these various periodicals, our contributions now also will be available on an occasional basis here on MorningNewsBeat. This isn’t meant to be a replacement for the magazines; quite frankly, you can read them there first. But by allowing us to reprint them, it is hoped that these articles will have a new and expanded audience.

Reprinted with permission, FMI Advantage, Food Marketing Institute, 655 15th Street, NW, Washington DC 20005.

On a recent trip to Chicago, I was wandering up Michigan Avenue when I encountered what can only be referred to as the Taj Mahal of computer stores - The Apple Store, a two-story monument to the vision and innovation as practiced by one of the world's most famous names in computers.

Famous, but hardly most successful.

Apple, in fact, has a market share that tends to hover below four percent, while companies like Dell and Compaq take the lion's share of personal computer market share. Over the years, Apple and its Macintosh computers have more and more been pushed into becoming niche products - highly desirable to a small group of obsessive Mac users, but by no means the power player that it might have been.

In fact, despite the fact that Apple is a global, public company, known by millions of people, you might say that it is something of an independent, doing battle with behemoth companies with far greater sweep and resources.

Sound familiar?

It is my contention that Apple Computer is to the likes of IBM, Dell and Compaq what independent grocers and small/regional supermarket chains are to the likes of Wal-Mart.

And while it admittedly isn't a perfect metaphor, my visit to the Apple Store - one of the newest in the fleet, and certainly the biggest - convinced me that there is a lot that food retailers can learn from the computer retailer/manufacturer.

(Full disclosure: I am a Macintosh devotee, having worked on one for more than a decade. Given the option, I will never own a computer made by any other company. And, in fact, I am part of a Mac family: I work on an old G3 Powerbook, my wife works on a G4 Titanium PowerBook, my 17-year-old and 14-year-old sons have new iMacs (the kind that looks like a lamp) and my seven year old daughter works on a somewhat older iMac. There's also at least one iPod in the house. Not that any of this affects my objectivity…)

So using the Michigan Avenue location as a model, let me suggest four things that mainstream and independent food retailers can learn from the Apple store:

  • Doors Wide Open. By their very nature, the front of most supermarkets (and even supercenters) tend to be big walls punctuated by relatively small entrances and exits. And when there's glass up front, it tends to be obscured by large sale banners that stress the low prices of this or that.

    Now, this isn’t something unique to the Apple Store among nonfood retailers, but it does a particularly good job at exposing the contents of the store through large glass windows, and with wide open doors that show a wide range of hardware that beckon the casual shopper to stop in. It's like looking into a particularly cool computer lab.

    Now, don't say that most supermarkets don't have to do this because they are destinations to which most people drive in their cars, therefore making the front window irrelevant. Particularly in this competitive environment, that's arrogant. Put a chef, or the bakery prep area in the front window - and start romancing the customer even before they enter.

  • Engage The Senses. Once inside the Apple Store, virtually every piece of hardware the company makes is on display - and out there for people to touch, play with, test. That goes from the least expensive i-Pod to the most expensive 17" laptop…and includes video conferencing capabilities, music downloading, etc…It's the old 'kid in a candy shop" experience - and it works.

    The applications for the supermarket business are obvious, and a lot easier to capitalize on. Since supermarkets are in the food business, it makes sense to capitalize on that fact - with great-smelling, great looking, and great tasting food everywhere you look. It means sampling - aggressive, relentless, omnipresent sampling. (You know - like Costco does.) Too few food retailers act on the proven theory that if it smells good and tastes good, people are far more likely to buy it. And in a supermarket, the ticket might by $5, as opposed to $500 or more at the Apple Store, and therefore have a much lower barrier to a possible sale.

    Amazingly, there are supermarkets in this country that have all the charm of a hospital ward.

  • Create Community/The Genius Bar. One of the things that effective retailers do particularly well is create a sense of community, a common bond that ties together all that work and shop there. (Whole health stores are expert at this, since they tend to hire people who are living the life, not just looking for a job. When a shopper ventures into a Wild Oats, for example, he or she tends to be able find help from people who share a certain outlook and commitment.)

    Beyond the fact that anyone who uses Apple products generally feels like part of a small community by virtue of the fact that we know we're outnumbered, the Apple Store uses two strategies to keep that feeling alive and even enhance it.

    On the second floor, up a beautiful glass staircase, is a small, open theatre in which seminars and interactive product demonstrations are held, and where videos about various products are running when there's nothing else going on.

    And, there's the "Genius Bar," a long counter staffed by a number of black-shirted computer-savvy types who are there to answer a wide range of questions, and even perform simple repair operations on computers that are brought in. These folks are smart, patient and personable - wonderful ambassadors for the Apple experience.

    Couldn't your store benefit from some version of the Genius Bar?

  • Get 'Em While They're Young…Or Idle. The Apple Store also features a small Internet café with more than a dozen computers, where people can just stop by to check their email. And, there's a kids corner with a half-dozen machines on which children can play with the latest software.

    These serve two purposes. One, they get people to stay in the store longer, giving it the sense of being that "third place" (other than the home and workplace) that Starbucks' Howard Schultz likes to say is a core value of his company. And, the more you get people interacting with the merchandise, the more likely that they may become converts if they use other brands, or upgrade their current equipment if they already are Mac users.

The sum of all these individual strategies is that they clearly establish what Apple is, and what it is not. It accepts its role as a small player in the industry, but prides itself on being innovative both in terms of the technology it creates and the retailing environment in which it sells its wares. There's nothing defensive about the Apple Store, no sense of desperation or persecution complex about the bigger, badder companies that dwarf it - a complex common to many supermarkets that compete with supercenters.

Because Apple knows what it is, the company has decided that customers will have to come to it…not the other way around. Apple isn’t going to focus on prices, or sales, or cheap knockoffs, just to build market share at the expense of its role as innovator and thought leader.

That's a key learning for supermarkets, which often descend to lowest common denominator marketing at the drop of a freestanding insert.

Next time you're in Chicago (or any other place that has one - there are more than 70 of them around the country, though not all as grand as the Chicago version), stop by the Apple Store. You could walk away with more than just a computer.

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