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Apple Retail vs. Online Shopping

Apple Retail and Online ShoppingOn November 5, 2012 Apple announced it had sold three million iPads in an astonishing three days since the launch of its new iPad mini and fourth-generation iPad tablet.  Another breathtaking record for a company that just announced quarterly revenue of $36 billion and quarterly net profit of $8.2 billion for its fiscal 2012 fourth quarter.  When purchasing a product directly from Apple, in this instance an iPad, Apple’s consumers have two primary options. A consumer has the option of visiting one of Apple’s 250 retail locations in the United States or purchasing the product online at Apple.com.

For a hyper-connected techie or a first time user the experience of shopping at an Apple store can be mesmerizing.  The Apple store, a masterpiece of retail design, which is typically the centerpiece of any setting it is housed in, offers an intriguing, inviting, bright and shiny storefront.  It offers consistency, support and an innovative advanced shopping experience. The store provides a clean layout of all of Apple’s primary products (iPhones, iPads, iPods, MacBook’s and iMacs) and a connected sales team communicating through iPads, portable point of sale iPhones and FBI equivalent headsets.  The “greeter” promptly welcomes all guests where they can explain their needs and are guided through a carefully predetermined path for their specific requirements.  The store offers face-to-face interaction with a knowledgeable support team, specializing in anything and everything Apple manufactured.  As well as hands on experience for all Apple products with a helpful guide by your side.  All locations also offer a “genius bar” for maximum technical support to trouble shoot your device, transfer content to your new purchase or provide “one on one” personal training on any of Apple’s services and products.

Apple.com also offers an innovative shopping solution.  The website, a recipient of many web honors, offers a simple design while still being rich and detailed.  Apple.com was designed around the concept of strong type white space, which allows any first time user to quickly navigate through its sea of information.  Your journey begins with a carefully designed landing page displaying the most recent Apple product and a page header that easily outlines all of Apple’s products and services (Store, Mac, iPod, iPhone, iPad, iTunes and Support).  From there, a customer is navigated to specific subcategories based on their needs. For example, click on support and select what item you need support for, next what version and finally what category.  The website offers instant customizable purchasing options for any merchandise from all of its inventory locations.  Apple.com also houses tutorial videos for all of its products as well as detailed features, design, and technical specifications.

While both purchasing experiences have stood out from their competitors in recent years they have various differentiators.  The support between the two options is very different from the personal “one on one” support in store to the predetermined question and answer on the website.  The advantage seems to be with the store, as knowledgeable employees not only answer questions, they guide and advise customers on all of Apples integrated products and services.  Nonetheless, due to the mass popularity of Apple, getting support or simply checking out can require an appointment or a lengthy wait.  Where Apple.com succeeds is in its instant support and checkout, no lines, no hassle.  Furthermore, Apple.com has access to the entire Apple inventory while each retail location is limited to its own supply.  Another difference between the two options is the experience to see what all the hype is about.  In store consumers not only play with the top selling phone or tablet in the world, but they experience the devoted and fanatical brand that is Apple.  This is achieved through the stores intricate logistics, the knowledgeable staff and constant faithful customer base.  There is a major advantage to the store in its hands on opportunity to work with Apple’s creations.  The store offers all of its products preloaded with an immense variety of applications ready for a test drive.  While the website offers an incredible amount of information through videos and “communities” support it cannot match this personal interaction.

To understand the success of both the Apple retail and Apple.com, a Net Promoter Score (NPS) analysis was conducted on a sample of 18 individuals.  Nine respondents were asked, “On a scale of zero to 10, how likely is it that you would recommend Apple retail stores to a friend or colleague?” As well as, “what is the main reason for your response?” The second group of nine respondents was asked the same questions for Apple.com. I also answered each question totaling 10 responses for each of the two options.

The 0-10 responses for Apple retail were: 10, 10, 10, 10, 10, 9 (mine), 9, 8, 7 and 2.  Similar to the advantages above, 8 of the 10 high scores praised Apple retail with responses such as: impressive support, knowledgeable staff, a well-tuned machine and one stop shop for Apple.  All three of the lowest scores, focused on the disadvantages of long lines and the need for an appointment. The overall NPS score for Apple retail come out to a respectable 60.  The score was calculated by taking the percentage of respondents that were promoters (picked score 10 or 9) and subtracted from the percentage of respondents that were detractors (picked score 0-6).  The sample of people scoring 8 or 7 is considered passives and is omitted from the NPS calculation.  In turn the promoters were 70% of the sample, the detractors were 10%, equaling an overall score of 60 (70% – 10%).

Conversely, the 0-10 responses for Apple.com were: 10, 10, 9 (mine), 9, 9, 9, 8, 8, 8 and 7.  The scores were within a tight range and the responses to the second question were just as uniform.  The responses to the second question complemented the advantages of Apple.com: clean easy navigation, product in stock, great tutorial videos and lots of information on their products.  Using the NPS calculation above, the promoters (10 or 9) were 60% of the population while there were no detractors 0% in the sample.  The overall NPS score for Apple.com was equal to Apple retail at 60 (60% – 0%).

An important question arises through the analysis above; can retail stores survive in the face of Internet competitors? The response to this engaging question is an exultant YES.  The first major reason why retail will survive is the human need for instant gratification.  Shoppers prefer not to wait for their purchases to be shipped, they prefer to get it fast and typically get it now!  Retail stores allow consumers to arrive at its locations and leave with the merchandise.  If you need a product quickly and you purchase it online there can be extended wait periods and expedited delivery can be very costly, at times surpassing the price of the purchase.  The next reason retail stores surpass Internet retails is the hands on factor, when buying shoes or a baseball glove, how do you know it will fit? Retail locations allow consumers to test drive the product by seeing it, touching it and most importantly trying it. This gives consumers the ability to fully interact with the product they are purchasing, eliminating any surprises many shoppers experience shopping online.  Furthermore, shoppers like to receive in person advice and guidance on their purchases.  It is difficult for an online retailer to tell you those jeans look great on you! Moreover, when dealing with high-tech high priced item such as a new computer, retail locations offer in store specialists ready to address any questions or concerns real-time.  As opposed to dealing with impersonal predetermined technical and design specifications through Internet competitors. Another advantage to retail stores is the ability to return or exchange a product.  If a shopper does not like what they purchased they can simply go back to the retail location and return or exchange the product.  When shopping online there is always the hassle of repackaging and reshipping the item back to the online retailer and waiting for the return or the new product. The final reason that retail stores will survive is due to the human need for interaction. The excitement and experience of shopping has been a part of human nature as long as we have existed.  From Ancient Greeks shopping in a market place called the Agora, to children picking out a toy for their birthday at the local toy store.  Customers experience a certain thrilling satisfaction by shopping in store that online competitors cannot match.

Author: Adrian Trzaskus

With a keen career focus on strategy, technology and implementation, Adrian Trzaskus has successfully created and managed Omnichannel loyalty programs and marketing for nationally-recognized Fortune 50/500 companies. A multi-disciplinary leader, he has a distinct and unique understanding of loyalty marketing concepts, design, implementation and innovation across industries including such as retail, financial services, telecom, real estate and entertainment. Adrian, in a variety of roles throughout his career, has a unique ability to understand what motivates customers and knows how to help brands connect with them on a personal level. He has extensive experience navigating the loyalty ecosystem and integrating disparate channels, devices, and partners, with a demonstrated acumen for maintaining client relationships and leading teams through complex initiatives. He has built program roadmaps, provided concepts and use cases to optimize loyalty programs, and has delivered user experience plans focused on engagement and brand awareness — including social, mobile, gamification and more. Adrian holds an M.B.A. from the University of Florida and a B.S. in Business Administration from Saint Joseph's University in Philadelphia.

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