Apple’s new retail head to pave way for fusion of technology and fashion
By Chantal Tode
October 17, 2013
An Apple store in New York
Apple’s recent hiring of the CEO from ultra-hip fashion brand Burberry to run its retail division points to the growing fusion of technology and fashion seen in the growth of wearable computing devices such as watches and eyewear.
As the CEO of Burberry, Angela Ahrendts played an instrumental role in its makeover from a ho-hum trench coat brand into a trendy apparel and accessories line favored by celebrities such as Keira Knightley and Emma Watson. Apple is hoping to infuse some of that same excitement into its stores, which are playing a bigger role than ever for the brand’s strength as the role of product innovation diminishes.
“It shows that they are getting wise about their future and getting wise about how people’s attitudes towards their products and services are changing and might continue to change into the future,” said Jez Frampton, London-based global CEO of Interbrand.
“The whole notion of fashionability within technology is coming more and more to the fore,” he said. “Everyone is talking about wearable technology.
“You’ve got the guys at Google Glass hiring people from the fashion world now. They recognize that it's increasingly less about bits and bytes and more about whether it looks right and fits my lifestyle.”
As technology and fashion increasingly come together, the retail experience will be an important backdrop for showcasing devices in a way that connects them to fashion.
Ms. Ahrendts brings many desirable attributes to the table for Apple, including how luxury brands can leverage digital.
“She is obviously a great retailer and has a significant track history of building a significant retail network, but more than that she has a very strong understanding of digital retail as well,” Mr. Frampton said. “Burberry was the first luxury brand really to get their hands around digital.
“And, of course, she understands fashion luxury and the relationships that brands like that have to build with their customers,” he said.
“All of those things fit perfectly on the plate of Apple.”
Point of differentiation
Apple's last head of retail, John Browett, came from retailers Dixons and Tesco.com, but lasted only six months on the job and quit in October last year. He tried to reduce new hires and staff hours for the stores, which was a mistake for a retail business built on the strength of its customer service.
Since Ms. Ahrendts hails from the luxury retail industry, she brings a deep understanding of customer service and how to appeal to the kind of well-heeled consumers that Apple wants. Such a focus could help Apple differentiate itself from the competition.
Ms. Ahrendts also has success expanding and increasing sales for Burberry in China, a market that Apple is very focused on expanding into.
“Bringing in a luxury retail perspective to the Apple brand allows it to continue to really differentiate itself in an increasingly competitive market,” said Oscar Yuan, vice president at Millward Brown Optimor, New York.
“Apple does not want to compete on features or technology; they want to do what luxury retail does – inspire desire – lust, almost – for its products,” he said. “This is something that others haven’t really touched yet.”
Cornerstone of success
Apple’s retail strategy has always strongly focused on branding and marketing.
Apple was the first technology brand to understand how its products fit together into a holistic story for the consumer and that an immersive retail experience would be the best way to tell it.
The Apple stores have been hugely successful, with loyal customers waiting in long lines to get first access to new products and making appointments with store associates for one-on-one consultations.
Much of Apple’s success can be attributed to the strong retail experience it has created in its stores, with unique services such as the ability to make an appointment to meet personal with a store associate and to have a device set up before leaving the store.
“Apple's retail stores have been the cornerstone of their success over the last 12 years,” said Paul Ruccio, a consultant at Boston Retail Partners. “Having a mixture of sales and services in their retail environment has made their products desirable.
“When you buy a Samsung product and it breaks – where do you think to go?,” he said. “You think of going to a Best Buy store, a Verizon store, or AT&T store – a store that is not a Samsung branded store.
“When you have an Apple product and it breaks – you think about going to the Apple Store right off the bat.”
Going forward, Apple’s retail business is likely to play a more crucial role than ever for the company now that product innovation appears to be taking on a smaller role.
Apple has lost some steam in the past year as competition grows from Samsung and other handset manufacturers but also because it has been a while since the company has come out with an innovative new product.
Apple has also brought out a few lower-priced items such as the iPad mini and the iPhone 5C over the past year, raising questions about the brand’s commitment to its premium positioning as smartphone sales growth stalls out at the high end.
However, the hiring of Ms. Ahrendts would seem to suggest the company is as committed to the upscale market as ever.
“Apple's retail business is vital to their success,” said Timothy P. Griffin, a consultant at Boston Retail Partners. “While Steve Jobs was still in power, innovation and their product line drove business, but as genuine inventions have declined, sales have maintained through positive retail interactions within the store.
“While Apple attempts to close the gap for the consumer by offering ‘low cost’ items like the iPhone 5C and the iPad Mini, Apple would be remise to forget the consumers who made them,” he said.
“It used to be cool to be seen with Apple devices, and the hiring of Angela Ahrendts shows the company's attempt to return to its roots.”
Chantal Tode is associate editor on Mobile Marketer, New York
Related content: Software and technology, Apple, Burberry, Angela Ahrendts, retail, Interbrand, Jez Frampton, Millward Brown, Oscar Yuan, Boston Retail Partners, Paul Ruccio, Timothy Griffin, mobile marketing, mobile
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