2013年8月4日 星期日

Justice Department Seeks Oversight of Apple's iTunes Store / Apple Stores Glow Less Brightly : iPhone Meccas Lose Some Luster

Justice Department Seeks Oversight of Apple's iTunes Store

 

 

 

 


Updated August 1, 2013, 6:56 p.m. ET
Apple Stores Glow Less Brightly

With No Head of Retail for 10 Months, iPhone Meccas Lose Some Luster

[image] Bloomberg News
Apple's retail stores generated sales of $5,971 per square foot last year—well above other chains—but the company's growth has slowed.
Apple Inc.'s AAPL +1.28% search for a new head of its retail stores is dragging into its 10th month, at a time when the stores need extra attention: The company recently reported its first drop in store sales in at least four years.
In 2001, Apple changed the retail game when it threw open the doors to the Apple Store's sleek and bright, modern interiors—completely different from electronics warehouses of the day stuffed with accessories and cords. The stores were temples for all things Apple, and destinations for early adopters.
But today, just as Apple's products have become ubiquitous, the format of its stores has become commonplace.
The company has been reinstating spending and reversing policy decisions that were unpopular with customers during the six-month tenure of John Browett, who had been brought in to run Apple's stores in April 2012. Tim Cook, the company's chief executive, has been heading up the stores since announcing Mr. Browett's departure in October.

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Apple's search for a replacement, handled by recruiters Egon Zehnder International, has gone slowly, people familiar with the matter said, and the company has yet to settle on a finalist after interviewing several external candidates.
Among those interviewed but rejected as a poor fit were wireless and telecommunications-industry executives, one such person said. A CEO of a privately held retailer in France spurned Apple's overtures, believing it would be hard to change Apple's culture as an outsider, another person said.
Apple doesn't consider internal candidates to be an option, according to a third person familiar with the matter.
Apple suppliers are gearing up for mass production of a new iPad mini that will likely feature a high-resolution screen from Samsung. The WSJ's Lorraine Luk talks about what consumers can expect in the next iPad mini.
Some potential retail chiefs are wary about taking charge of Apple stores because they say the top brass hasn't been clear about plans, said one tech-industry recruiter who knows Apple well.
"We're actively looking for a head of retail," said an Apple spokeswoman. "We have a strong network of leaders who will continue to do the excellent work they've done over the last decade serving our customers."
Even without a retail chief, Mr. Cook has made retail one cornerstone in his strategy to re-energize flattening sales. Mr. Cook has said he plans to aggressively expand the number of Apple retail stores in China, following a slowdown in sales there.
[image]
To be sure, Apple Store sales continue to be the envy of other retailers. It raked in $5,971 per square foot in 2012, up 17% from the $5,098 per square foot the year before, according to retail consultancy Customer Growth Partners. By comparison, Tiffany & Co. had sales of $3,453 per square foot in 2012, and popular yoga-clothes retailer Lululemon Athletica Inc. pulled in $2,464 per square foot last year.
However, even Apple's metrics in this arena have begun to fall, Customer Growth Partners says. So far this fiscal year, sales per square foot have fallen to $4,542, down 4.5% from $4,754 the same time a year earlier.
The Apple Store is expected to be a nexus of activity among shoppers for Mac computers, iPads, iPhones and iPods, where new products are explored and explained to new converts, and "Genius Bar" staffers are on hand to troubleshoot. Yet Apple's retail stores have struggled from a problem the company faces at large: sameness.

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Sales at Apple Stores in the recently reported fiscal third quarter slipped to $4 billion, down slightly from a year earlier, and the lowest since the fiscal fourth quarter of 2011. It was the first drop in year-on-year quarterly sales at the stores since 2009, when the company changed how it recognized revenue. (Overall Apple's revenue, which includes online sales and sales through other vendors, totaled $35.3 billion in the latest quarter, slightly up from the previous year.)
Apple's lack of retail leadership with vision and operational skills certainly hasn't helped the stores, said Craig Johnson, the head of Customer Growth Partners.
The Apple Store experience used to change more regularly, he said. Nearly a decade ago, Apple invented a unique one-on-one education program for customers; it switched to iPod Touches as cash registers in 2009 and, in 2011, using iPads as signs for products around the store.
"Apple needs to recreate and reinvent its once novel retail model, which is now not so novel," Mr. Johnson said.
Mr. Browett's brief tenure appeared focused on cost-cutting measures, employees said. The former chief of Dixons Retail, a small European chain, he replaced Ron Johnson, an instrumental figure in creating the company's stores, who left to run J.C. Penney Co.
Shortly after Mr. Browett's arrival last year, managers in some stores got orders to reduce costs, said people familiar with the stores. Employee events, training, off-site meetings and even budgets for paper and pens dwindled in the ensuing months.
Representatives at Mr. Browett's current employer, U.K. fashion retailer Monsoon Accessorize, didn't make him available for an interview.
"You had different products and services emerging almost every quarter under Ron," said Dane Taylor, a 36-year-old who worked at one of Apple's stores in Virginia for five-and-a-half years, until December 2010. "Since he left, the stores have been basically the same from a customer-service point of view."
In resuming certain expenditures, Apple has begun letting store managers rent conference rooms at hotels or malls for larger meetings involving several nearby stores, or confabs between certain groups of staff, say current and former employees. In some stores, hiring specialized employees, such as management or "Genius" technical support agents, has also returned after being slowed or halted during Mr. Browett's tenure, they say.
Budgets for paper, pens and other basic supplies are roughly back to their earlier levels after dropping about 30% in some stores, these people said. Other items, such as replacement T-shirt uniforms adorned with the Apple logo, still aren't handed out to store employees as quickly as they used to be, one person said.
The most dramatic changes to Apple's retail operations in recent months have been how staff interact with customers.
During Mr. Browett's tenure, employees say, the company's internal communications shifted to sales from a focus on customer service—an experience that Apple had finely tuned. The push was so strong, one person said, that staff normally assigned to educating customers in one store were told to join the sales floor in between classes.
Customer-satisfaction surveys for some stores began falling in the ensuing months, these people said. That bothered many store managers, who had been taught to aggressively monitor poll results.
Following Mr. Browett's exit, the employees say, customer service has once again become Apple's retail mantra. The company is also re-training staff about sales techniques during special sessions, held on weekends for some stores, with a renewed focus on helping customers choose their products and even recommending individual apps if they buy an iPhone or iPad.
Write to Ian Sherr at ian.sherr@dowjones.com and Joann S. Lublin at joann.lublin@wsj.com
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