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Apple Store profile reveals intense control, impressive margins

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By Charles Starrett

Contributing Editor
Published: Wednesday, June 15, 2011
News Categories: Apple

An extensive profile of Apple’s retail stores by the Wall Street Journal has revealed some interesting facts about the decade-old chain. Although Apple’s attention to detail in its stores’ designs is evident, the company also stresses over customer service details, going so far as to instruct its Genius Bar staffers to use “as it turns out” rather than “unfortunately” to sound less negative when they are unable to fix a problem, and to forbid employees from correcting customers when they mispronounce an item name because that might make them feel patronized. The report also references an Apple employee training manual as using the acronym APPLE for its steps of service, which include “Approach customers with a personalized warm welcome,” “Probe politely to understand all the customer’s needs,” “Present a solution for the customer to take home today,” “Listen for and resolve any issues or concerns,” and “End with a fond farewell and an invitation to return.”

The report also goes into detail about the stores’ financial performance, citing investment bank Needham & Co. as saying that Apple’s annual retail sales per square foot have risen to $5,914—including online sales—compared to $3,070 for Tiffany & Co. and $880 for Best Buy. Despite the $880 mark, Best Buy’s profit margin is roughly one percent, according to the report, while Apple’s retail profit margin is said to be 26.9 percent. The comparison between the Apple and Tiffany is perhaps more fitting, as both companies’ stores are similar in size, use high-end fittings and materials in their construction, and sell mostly smaller items that retail for hundreds of dollars, while Best Buy carries a number of larger items—such as appliances and home theater packages—in more warehouse-like stores.

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