Toward the end of Apple CEO Tim Cook’s keynote appearance today at the Goldman Sachs Technology and Internet Conference, he dedicated a good-sized monologue to the state of Apple’s retail operation, where he confirmed a new store in Turkey and more international growth; he noted that stores have become so important in their communities that you can’t really call them stores anymore; and (joked?) that walking into one is akin to taking a Prozac.
Apple retail stores, he said, have gone beyond being sales hubs. A store “acts as a gathering place, which has an important role in the community” for youth groups, musicians and more. “I’m not even sure if ‘store’ is the right word any more,” he said. “They have taken on a much bigger role. They are the face of Apple. People don’t think about the Cupertino headquarters; they think of the Apple store.”
This is a message that’s important for Cook to get across, considering that last quarter, Q1 2013, the stores saw only an incremental increase in revenue per store compared to a year ago — $1.25 million per week compared to $1.22 million in Q1 2012. Overall, the stores pulled in $6.44 billion for the quarter. Cook noted that the average Apple store last year made over $50 million in revenue.
The message also comes on the same day that Apple lost out to Amazon as the most reputable brand in the U.S., according to a Harris poll out today. Part of the criteria polled included consumers’ perception of trust at the companies. Amazon, of course, is an online brand, while Apple offers a retail experience both online and offline.
Cook also noted that in the last quarter, the stores have seen some 120 million people pass through them, “almost 10 million people per week.” So many, in fact, that about 20 of Apple’s stores are being closed down and enlarged. “This is like the issue around cash. [Apple has $137 billion at the moment and is being pressured by shareholders to give up some more of it.] It’s a privilege to have this kind of issue.”
Cook noted that Apple will add 30 stores, “disproportionately outside the U.S.” In addition to adding “lots more” stores in China, he also confirmed that Apple will open its first store in Turkey this year. Apple had been hiring in both Rio de Janeiro and Istanbul but had only confirmed the Brazilian retail operation. “We still have a long way to go,” Cook said of the company’s plans to add more countries to its list. “We’ll never be in every one of them.”
Again, going back to the marketing role that the stores play for Apple (and again taking focus away from hard sales), he emphasized how important they are for launching new products. “One of the things that’s not understood that well about the stores is that I don’t think we would have been nearly as successful in the iPad as an example if it weren’t for our stores,” said Cook. He noted that people’s view of the tablet, prior to the iPad, “ingrained in their minds [was] a heavy thing that no one wanted.”
“I don’t think it would have been nearly as successful without stores welcoming people at [a rate of] 10 million a week” to try them out… It gives Apple an incredible competitive advantage.”
Because of that, “We’re going to continue to invest like crazy in them.”
His waxing lyrical on the stores took a slightly surreal turn towards the end. “I don’t have very many bad days,” he said, “but if I ever feel like I’m dropping down from an excited level, I go into a store. It’s like a Prozac or something!”