“I think as humans we still need gathering places,” (Angela) Ahrendts recently told Vogue Business. “And when you are serving digital natives, the thing they long for more than anything is human connection. Eye contact.”
-Angela Ahrendts (Former head of Retail at Apple)
In a world where children grow up with iPads in front of their faces for hours every day, Apple’s plan is to offer refuge with a human touch and within the four walls of the most prominent display of American consumerism — the Apple Store.
Angela Ahrendts stepping down as the head of Retail at Apple, following an incredibly successful five years of expanding Apple’s global flagship program, is one of the biggest stories in the retail industry to kick off 2019. Her tenure started with the goal of turning Apple’s best 25 stores worldwide into “global flagships,” which would serve as town halls and touch points for consumers.
Before joining Apple, Angela was CEO of Burberry and lead the luxury brand’s strategy to draw in younger customers. She was able to achieve this, in part, because of her 44,000-square-foot Burberry Flagship on London’s Regent Street. The store, opened in 2012, had over 10,000 iPads and smart mirrors inside to simulate rain showers and to live stream fashion shows from all over the world. When a customer would try on clothes, displays in dressing rooms would highlight images of those same items on high-profile catwalks and in films.
The store was a homage to how millennial live in a digital age. But it also included the human touch of a store with associates. Ahndrets commented on the space: “Walking through the doors is just like walking into our website. It is Burberry World Live.”
Burberry’s Regent Street store is what caught Apple’s eye when the tech company moved to poach Ahrendts from the luxury fashion world and bring her to Silicon Valley. She was such a valuable addition to Apple that her salary was more than double that of CEO Tim Cook.
At a time when the news media was declaring that retail was dead, Apple was investing in the human experience and, despite their recent woes in China, it has largely paid off.
The experience inside an Apple store today is a product of massive investments into things like training (where Apple’s employee turnover is around 10% per year compared with a competitor average of 73%), the thousands of beacons behind walls in every Apple store that track the flow of customers and sends them push notifications, along with the continuation of Steve Job’s original vision that: “[The store staff’s] job is not to sell, but to enrich the customer’s life through the lens of education.”
Traditionally, retail stores have measured productivity based on the occupancy cost (rent/sales). But Apple has known for a while this is an antiquated metric.
Ahrendts vouched to continue on with Job’s vision and to stop looking at retail on a linear basis — the profitability of each line of business was intertwined. This included retail.
“A consumer can buy a product online, but they will need to leave the house to experience the full effect of a brand”
For example, Ahrendts hinted that the new Los Angeles Apple Flagship under construction in Downtown Los Angeles may not make as much money as the Apple store in Century City, just 10 miles up the road. But it’s key to instead look at the market as a whole and see which store could reach more customers. It doesn’t matter if those customers actually buy things when they’re in the flagship. Consumers need to “experience” the flagship, so when they decide to buy a new phone, computer, tablet or watch, they remember an incomparable experience at the Apple store.
As I speak with founders of various direct-to-consumer companies each day, I see how the narrative is changing. There’s a desire from many brands to try concepts in real life at Neighborhood Goods, Fourpost, or Showfields outpost. Once these companies see they can be successful in real life, they want to create a shrine for their brand and not share space with competitors and distractions.
Shrines for the digitally native brands of today will be the Apple store of tomorrow. Some Warby Parker stores are already outperforming stalwarts like Tiffany and Louis Vuitton on a pound for pound (sales per square foot) basis and we are only in the first inning of Warby’s retail innovation.
Stores will turn into event and service hubs in the future; A place where digitally native humans (late millennial/Gen Z consumers) and companies can come together for help with a product, meet and greets and for human connection. A consumer can buy a product online, but they will need to leave the house to feel the full effect of a brand.
This human connection, paired with technology and data collection, is what will propel the store, the brand and the consumer of the future forward.
Brandon Hoffman is a Manager of Digital Brands at Macerich. He is responsible for bringing Digitally Native and Direct to Consumer brands to top shopping centers across the country through BrandBox.
BrandBox is the easiest way for a digital-first brand to expand into top shopping centers (like Scottsdale Fashion Square) around the country. You can see more information by checking out our web site here.