Staff —

Op-ed: Apple Store may be shifting from customer experience to profit machine

Apple's retail head John Browett is making changes left and right.

Amsterdam Apple Store, The Netherlands.
Amsterdam Apple Store, The Netherlands.
Apple, Inc.

Apple admitted it made a mistake when its new senior VP of retail John Browett slashed staffing levels just ahead of the busy holiday shopping season. But that doesn't necessarily mean Browett won't try to turn Apple's generally well-liked network of retail stores into clones of the near-universally reviled PC World and Curry's chains that Browett managed as CEO of Dixons Retail, according to a new report from ifoAppleStore. And he could be doing it with the full blessing of Apple CEO Tim Cook.

Sources speaking to ifoAppleStore claimed that some of the staffing issues that came to light earlier this month have indeed been reversed. Employees that had been laid off (despite Browett's claim to the contrary) have been rehired. However, overtime hours are still limited, and part-time employees are still only getting the minimum number of hours—as low as 10 per week. Employees that were demoted as part of the "new staffing formula" Browett tried to implement are also not getting their former job titles back.

What's worse, though, is that workshops and training sessions for customers appear to be cut down or eliminated entirely. Spaces devoted to demonstration and training areas are reportedly being filled with shelves for additional accessories, and sales specialists are being directed to increase sales of these miscellaneous items.

Specialist performance will now be directly measured in part by how many accessories they can sell with each hardware item sold. So if you walk in to buy a MacBook Air, the new metrics would encourage sales people to push you to buy cases, hard drives, AirPort base stations, and more. Furthermore, specialists are also reportedly directed to have customers use the iPhone-based EasyPay, though sales through EasyPay don't count toward an employee's metrics—a Catch-22 if I ever heard one.

Apple Stores, like this one in Lincoln Park, Chicago, generally exude cleanliness and order.
Apple Stores, like this one in Lincoln Park, Chicago, generally exude cleanliness and order.

To top it all off, even seemingly integral features of the Apple retail experience, such as the stores' generally immaculate cleanliness, may suffer. Store maintenance budgets have been cut, according ifoAppleStore's sources, which could lead to a "grimy and less attractive" store appearance.

When less isn't more

If dirty stores filled with pushy sales people and no added customer service sounds bad to you, I have to agree. If it sounds familiar to you, however, you have probably stepped into one of Dixons' Retail chains in the UK. Ars has received endless first-hand reports from readers in the UK that Dixons stores—in particular the PC World and Curry's chains—have "the epitome of appalling service," and are the "absolute antithesis" of the Apple Store.

"The sales staff jump on you straight away, even if you are just looking, and are very pushy," reader Arron Claydon told Ars in January. "Once you have checked the stock with them, they then try to sell you all of the other rubbish like extended warranties, cases, and even cloud storage. After you have refused this they then just pass you to the till and move on to the next customer."

"If you want a dingy shop full of distracting always-on demonstration units, staffed by surly ignoramuses who only want to sell you an extended warranty, then Dixons is the place to go," Phillip Storry, a systems administrator from London, told Ars. "Which probably explains why Dixons has been having real troubles of late—consumers are now wise to them and shop elsewhere."

(This is just a sampling of the hundreds of comments, e-mails, and tweets expressing similar sentiments Ars has received since Browett was hired in January.)

Long-time Apple customers may be scratching their heads and wondering why Cook chose Browett to take over for former retail chief Ron Johnson, especially given the appalling reputation of Dixons stores under his leadership. Sources for ifoAppleStore believe the answer lies in Cook's focus as an "operations guy." Former Apple CEO Steve Jobs let his design team come up with great ideas, while Cook's job was to make them profitable by focusing relentlessly on the bottom line. Cook seems to be taking the same approach to retail, with a focus on "revenue and profits, not customers."

Johnson, according to some accounts, championed customer experience over profits for Apple's retail stores, and had convinced Jobs that was the right strategy. And given the history of the last decade, I tend to agree: Apple Stores are often considered a gold standard for design and customer service, and generate more revenue per square foot than even high-end stores like Tiffany's, Coach, and Ralph Lauren. (Apple Stores generate $5,626 per square foot, 17 times more than the $341 average for mall stores.)

This is the image of Apple's retail stores that the company has fostered for the past decade.
This is the image of Apple's retail stores that the company has fostered for the past decade.

Despite performing better than most other retail chains, however, Apple's profit margin on retail sales is only about 22 percent. And sales numbers are still dwarfed by online sales and other channels. Cook and Apple CFO Peter Oppenheimer had apparently tried to push Johnson to change that strategy over the last few years, which may have ultimately led to his decision to leave Apple after Jobs' passing last year.

For what it's worth, we don't know for sure if Cook actually wants Apple's retail stores to focus more on profits and less on customer service. "Our retail stores are all about customer service, and John shares that commitment like no one else we've met," Apple CEO Tim Cook said in a statement when Apple announced Browett's appointment as head of retail. But Browett's history at Dixon's suggests otherwise, as do the reported changes being implemented. (Apple did not respond to a request for comment on this topic.)

Given my own experience with the perennially over-crowded stores here in Chicago, I'd argue that increasing staffing and services would be more effective—though admittedly, profit margins might suffer. And while Apple Stores may not contribute as much to the bottom line as Cook might like, the reputation and goodwill they engender are probably worth far more than a few points on a P&L sheet at the end of every quarter.

Channel Ars Technica