A study of traffic and productivity in Apple’s retail arm makes worrying reading for Cupertino, according to a new analysis by Asymco.
In an age when traditional retailers are complaining about online traders stealing their customers, Apple has a different set of problems – too many people. While Apple has some of the most valuable retail space in the world, and is hiring extra staff, there are just too many people going to Apple stores, Asymco founder Horace Dediu told The Register.
“Apple is adding employees at a very rapid rate, and now averages over 100 employees per store, which is rising to meet traffic,” he said. “Apple is throwing bodies at the problems, adding more people to handle the rush, but it’s getting too crowded and it can’t keep this up forever.”
Expansion is certainly possible, since Apple manages to get very high returns on their staff, Dediu’s analysis shows. The average Apple employee generated revenue of $481,000 per year, or $278 per hour, and each visitor spends an average of $45, a figure traditional retailers would kill for – or at least seriously maim.
This is in part due to the high value of Apple’s product line, but what makes it unusual in retail terms is that Cupertino has convinced staff to work at this level without offering any incentives. Traditionally retailers pay many staff on a commission basis, which is why the hard sell is so common, but Apple prefers to pay a decentish wage and rely on staff.
“If their wage is a good wage, then the pressure to close sales isn’t so strong,” Dediu explained. “Where people tend to be paid more by meeting commissions, then that can create unpleasantness. Apple's approach makes sure the customer is treated in friendly manner; it’s a very detailed protocol.”
Whether or not this model can be applied to other retailers remains in doubt, although former Apple retail boss Ron Johnson has recently moved to become the CEO of JC Penney. One possible candidate for the model is Disney, Dediu said, since it too has a highly individual brand with strong support. Current Disney stores seem to be crammed with goods and no staff, he noted. Maybe the Magic Kingdom could pick up a few tips. ®