The Apple Store

1999: Have you heard that Gateway now sells as much equipment through its storefronts as it does via phone, mail, and online orders?

Talk of the Web for the past week has been that Apple should do the same thing. After all, they have very little control over CompUSA and Sears, let alone the hundreds of independent Apple dealers, small chains, and regional chains.

The Model

I’ve never set foot in a Gateway Country Store, but I’ve heard a lot about them.

My understanding is that they don’t sell computers, per se. They sell accessories, answer questions, and provide a place you can try a Gateway computer before you buy – but you still have to order your computer from Gateway.

The Gateway Country Store has greatly improved Gateway’s profile. I drive past one several times a week, including on my trips to the local Apple dealer.

By providing a very visible Gateway presence and a low-pressure environment (remember, they don’t actually sell computers), they help make Gateway a leading brand not only in sales but also in mindshare.

Whither Apple?

The model makes sense for Gateway. They don’t have to worry about the CompUSA down the street or the local dealer across town who also sells Gateway Computers. You can only buy a Gateway direct from the manufacturer.

Apple is situated very differently. In many communities, you can buy from Sears, CompUSA, and one or more local dealers – as well as online from Apple and several mail-order establishments.

If Apple doesn’t want to alienate its local dealers (who have usually supported the Mac through thick and thin) or the national chains, how could it implement an Apple store?

Publisher’s note: This was published two years before the first Apple retail stores opened. The store-within-a-store arrangement with CompUSA hadn’t done what Apple wanted. In 2004, Gateway gave up on its retail stores.

To make it work without destroying local dealers and upsetting the national chains, The Apple Store would have to stop short of selling computers. They could sell accessories, Apple paraphernalia (mugs, T-shirts, etc.), books, and magazines, but not Macs.

Like Gateway Country Stores, they should be located for high visibility in a high traffic location with relatively easy access. Every current Mac should be on display, networked, and connected to the internet. Every employee should be fully versed in the Macintosh, able to talk with geeks and neophytes about each model. Ideally, each location would also have a tech type, someone conversant in networking, installing hardware, troubleshooting, etc.

Employees of The Apple Store would provide information and support in a low-pressure environment since they can’t sell the computers. They could help customers buy by providing directions to local stores and Macs connected to the web with shortcuts for ordering from Apple-authorized mail-order dealers, whether Apple’s online store or one of the many warehouse dealers.

Employees would be well compensated by Apple Computer. There would be no commission on computer sales generated through the store. The goal is to create a pro-Mac storefront that doesn’t pressure anyone to place an order – that’s the dealer’s responsibility.

Gateway finds that half of its sales are now generated through its stores. Apple could never hope to achieve that level since there is already an existing network of local and national Apple dealers, as well as several mail order outlets.

Instead, Apple’s goal would be to increase mindshare and market share for the Macintosh. A non-threatening Apple storefront could conceivably increase Mac sales 20-40% over current levels.

Implemented as a non-sales storefront, The Apple Store could increase sales for all channels, both retail and mail order. Although they would be operated at Apple’s expense, I believe the increased volume would more than cover the cost of setting up storefronts.

Further Reading

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