Six months before the first iPhone was released in 1997 Steve Jobs changed the name of the company he founded from Apple Computer to just Apple. Four years later the company opened its first retail outlet, and last summer all of the nearly 500 Apple stores worldwide underwent a similar brand truncation.
All the company’s showrooms are now referred to simply as “Apple” followed by the location. For example, its downtown Manhattan shop is called “Apple World Trade Center” rather than “Apple Store, World Trade Center.”
The rebrand project was led by Angela Ahrendts, senior VP of retail for Apple, who said the goal was to more fully integrate the outlets with their surroundings:
“The store becomes one with the community.”
Building a Brand Clubhouse
Other changes are afoot as well. Apple’s stores have always been known for being a hub of activity (the Fifth Avenue location is open 24-hours a day, 365 days a year), but now Apple is pushing to make their stores even more inviting.
More seating, more interactive demos, luxurious greenery, stunning 6K video walls, and seasonal ‘avenue’ displays all create an impressively intimate and boutique vibe for one of the biggest and most powerful companies in the world. They aren’t just running stores, they are creating veritable temples to their brand.
According to Phil Rosenthal, business columnist for the Chicago Tribune: “[by] using these places as virtual Apple clubhouses, strengthening existing bonds with devotees and welcoming newcomers into an inviting, immersive experience, you’re selling Apple and its products with or without immediate transactions.”
Retail Goes Omnichannel
Apple isn’t alone in seeing the synergistic potential of combining robust online commerce with traditional bricks and mortar. Retail is going omnichannel and pure play online or offline is quickly being seen as an outdated paradigm. Today, everyone wants to master both universes with an emerging business model that has been dubbed “Bricks and Clicks” or “Clicks and Mortar.”
Microsoft was somewhat late to the game, only opening its first retail location in 2009. The company has been mum on the success of the endeavor, but most anyone walking through a shopping mall can see that despite the XBoxes, Surface tables, and other shiny toys to play with, Microsoft’s stores are rarely as swamped as Apple’s
But, despite not being a rousing hit Microsoft has continued to open new locations, with over a 100 branches in the U.S. and eight in Canada. The stores are ostensibly intended to actually sell products, but they serve another purpose as well. Microsoft retail general manager Kelly Soligon told Recode: “We really think of ourselves as the physical manifestation of brand.”
Amazon Hangs Out a Shingle
Now, yet another digital behemoth is planting its flag in the real world. Amazon is opening its fourth physical bookstore in Chicago. The first store opened in Amazon’s hometown of Seattle last autumn. “We hope that if this goes well, if customers love it, we’d love to do it in other places,” said Jennifer Cast, the head of Amazon Books.
The plan must be working because Amazon will be opening a great number of stores across the country in locations such as San Diego, California and Portland, Oregon, and is rumored to be looking into space in the recently redeveloped Hudson Yards in New York City.
The stores have a few notable differences to classic book shops. For starters, all the books have their covers facing out rather than their spines, making it easier to peruse titles. Additionally, Amazon is using the space to market their growing lineup of devices including Fire tablets, Echo personal assistants, and Kindle eReaders.
One other highly notable difference is that there are no price tags anywhere. Customers are encouraged to scan the barcodes themselves and are quoted the exact price the book is selling for on Amazon.com. This technique epitomizes the blending of online and offline ecosystems, which is the key to a successful omnichannel retail experience.
Bridging the Real and the Digital
While online sales in the U.S. continually set new records (hitting $360 billion in 2015), offline sales still dwarf them with annual retail transactions measured in the trillions of dollars.
Ecommerce has its advantages (who doesn’t like shopping in their underwear?) and brick and mortar brings with it some big expenses (Apple’s current lease obligations top $4 billion), but according to a TimeTrade survey most consumers still enjoy the real world experience more.
“71 percent of U.S. consumers say they still prefer to buy from physical stores.”
Consumers still need fitting rooms for clothes and generally like to “kick the tires” of a potential purchase. Showrooming their wares helps Amazon fill that need. The convenience of picking up products at the store or bringing returns there also eases the transition to omnichannel shopping and cuts down on waste.
Rich data collection will enable Amazon to further blur the line between online and offline shopping experiences. As the world’s largest online retailer, they have incredibly detailed information on the buying habits of every major city and region in the country. Their physical stores won’t have to guess what to stock and when, they can exploit a deep informational warchest.
When married harmoniously, offline and online worlds can benefit each other greatly.
In the 21st century everyone wants traffic, and a report by intelligence firm L2 called “Death of Pureplay Retail” indicates that “…online retailers leveraging physical store locations drive higher organic site traffic and lower customer acquisition costs while elevating brand awareness.”
That last part might be the most crucial component of the Bricks and Clicks model. Sales are important, but these stores are selling more than widgets, they are selling these companies’ brands. They are meant to serve as shining examples of the prowess and new permanence of the tech titans.