Saturday, September 08, 2012

Apple stores – efficiency over effectiveness?

CEO Tim Cook and CFO Peter Oppenheimer "were of the opinion that the stores didn’t generate enough revenues to justify their operating expenses."
http://wallstcheatsheet.com/stocks/is-apples-retail-model-set-to-change-forever.html/
"Are Apple employees worried about their jobs?" , Aabha Rathee, Wall St. Cheat St., 2012-09-03

Is anybody really looking at the side effects of the stores even existing?  How many sales are there online because customers know they can go to an Apple Store for more direct help than online?

For example, if I buy a Macintosh online, buy an Apple Care contract, and something goes wrong, can I get timely help online.  Well, I bought one Mac from a local dealer, but took it to an Apple Store because of a problem.  The techie looked at it, gave me a quick fix, checked the battery, and replaced the battery at no charge.  Messrs. Cook and Browett, how many times are similar stories are there like this.  If Apple provides superior technical assistance, how do you measure the benefit to increased sales?  Apple customers pay a premium for superior service.  If you reduce that service, why should customers pay that premium?

It's like an auto dealer cuts back on the number of mechanics because they are not generating enough revenue.  Why aren't they generating enough revenue?  A very large portion of the dealer's customers have bought long-term service contracts; therefore, they pay little or nothing when they bring their cars in.  If the dealer's customers have to wait a long time for pre-paid service, are they going to be so willing to buy their next cars from the same dealer?

You can't run a business as a series of silos with no relation to all the other silos.  A business is more like a chain of gears.  You take one gear out and everything stops.