Apple is a technology company that designs, develops and sells electronic products to customers, including software, hardware and online services all over the world. Apple Store is its retail store which sells various Apple products. As of 2018, 506 Apple Stores were operated around the world. Each store has a streamlined symbolic design style: glass-paneled design with a hanging illuminated Apple logo, minimalistic look and feel, together with modern style furniture. Apple Store not only sells Apple products, but also provides personalized services and experience for customers.
Choice Architecture
Choice architecture can greatly influence people’s decisions. Apple retail stores use the following strategies to present choices for customers: 1) minimize the product choice selection; 2) provide a systematic way to evaluate attributes and make comparisons; and 3) utilizes intertemporal choice for payment options.
To avoid too many product options which may cause customers defer or fail to make a choice due to cognitive overload, Apple provides limited product options to make it easier for users get what they want. On the first floor of Apple store, there are 12 wood tables display 5 different products. As Apple just released new iPhone 11 a month ago, it is expected that lots of people come and try the new iPhone, therefore, five out of twelve tables display iPhone sets. Apple typically releases less than three models every year while its competitors make dozens of new models. Too many choices will lead to indecision, sometimes defer or avoid choices. And people tend to eliminate choices by aspects rather than evaluate multi-attributes systemically and reasonably. On each iPhone table, there are 6 sets of iPhone 11 with each set displaying 3 different new models. Customers are able to see the main comparisons of different models clearly through the graph/text panel in front of iPhones. In addition, On each device in Apple store, you are able to see the pricing information of the product and comparing details of this device with others. Information is displayed side by side, attribute by attribute. Through this multi-attributes comparisons, Apple provides a systematically way to guide customers evaluate the choices.
If you still have trouble to figure out what to buy, typically, by the moment you stand around the iPhone table and play with the product, there will be some Apple representatives come and check if you need any help. Talk to them about your concerns, they will guide you to choose the product that fits you the best. After you make a purchase decision, the new iPhone will be brought to you. Your salesperson is also the cashier, therefore, you don’t need to line up for the payment which in some cases, the long payment queue may dispel purchasing decision due to anxiety or impatient of the long waiting time.
Queueing for payment may also provide customers a chance to use system 2 thinking to reevaluate their purchasing behavior while waiting in line. The rational system 2 may lead to “not purchase” decision. Having one dedicated employee serve you throughout the whole purchasing journey provides you a personalized and comprehensive view for your product selection. At the last payment step, if you still hesitate to pay in full, Apple provides you the installment payment option and 14-day free return policy. For $999 iPhone, you can get it by $41.62/month for 24 months. For people with large discount rate or hyperbolic discounting, the long term payment plan is not what they worry about today. They tend to value today’s money more valuable than future and make choices with sacrifices occurring in the future. For these customers, installment option will attract them to make the payment. The 14-day return policy make the purchase commitment not so strict. Even if you regret buying the iPhone, you can still return it and get your money back. Therefore, instant decision is more likely to be made.
By minimizing product choices, providing systematic comparisons methods and suggestions from experts, and apply intertemporal choice and some other behavior economics concepts, Apple intends to structure and present choices so that customers are easier to make decisions.
Feeling, Happiness and Memory
Affective states affect decision making, and decisions are usually made with emotions. During my visit to Apple Store, I felt the strong positive affects Apple created for customers, together with happiness and joyful memory.
From the moment you step into Apple Store, staff will greet you with warm welcome. Inside the store, you are free to try on different Apple products, join “Today at Apple” class to explore new experiences in music, art, design and photography. Several months ago, I walked into the Apple Store to repair my MacBook, while I was waiting there to be served, “Drawing with iPad” class distracted my locus of attention. Rather than feeling the endless waiting, I joined the class and had a fantastic time learning drawing techniques from the expert. Trying new products aroused my curiosity and I felt delightful of learning something new. This positive mood made me evaluate other things (repair my MacBook) in the same environment (Apple Store) more positively.
Besides these intangible elements, Apple uses lots of other elements to create happiness and enjoyable memory for its customers. With the neat, airy and minimalism design to replace the traditional 4 walls retail store, Apple Store is designed as a place where people could gather to learn, experience and purchasing products. Products are arranged by categories on the table. Customers could find the product easily and get hands-on experience of those products. Bright lighting, melodious music and comfortable layout space create pleasant shopping ambience. Living trees, free Wi-Fi, public seating
area and video wall upgrade the retail shopping experience to community learning experience. All these layout, placement, lighting, and atmosphere set up a charming experience for customers.
Not only does Apple try to create joyful experience for customers which these experiences may further be treated as information in their purchasing decision, Apple also try to extend positive customer’s momentary experience so that the experiencing self get chance to absorb. The interactions with products, staff, experts and environment in Apple Store engage people’s system 2 thinking. They start to be aware of their enjoyable experience and the “remembering-self” will remember those positive states.
We felt happy and we remember we were happy. Our memory tends to associate Apple Store with positive mood (why we have the feeling). By creating this close feeling loop, customers have positive emotion with Apple, which further affect their purchasing decision.
What Can They Do Better?
Apple tries hard to create these enjoyable experience for customers. How to further improve on customers’ experience? Consider the Peak-End Phenomenon where people tend to access happiness and remember the Peak and End parts. Can Apple bill customers after 14 days of purchase? In this case, people explore different products, play around devices, decide to purchase an iPhone, receive a brand new iPhone and directly take it home. Without taking out bank card or cash, Customers simply sign in Apple ID (which contains their payment information) in the staff’s machine and use iPhone free for the next 14 days. Remembering self may be able to capture more happiness through this delightful end experience.
Online Shopping Experience and Comparison
Apple online store presents similar minimalism impressions as their physical store. The whole design is modern and simple. With large white space, simple colors and clear typefaces, and very few text visible at one screen, the website showcases the same brand philosophy that Apple store conveys in the physical space.
The online shopping experience uses similar choice architecture as its physical retail experience. The website has clear top navigation bar which direct users to explore different product lines. It also provide compare function, similar to what it presents in retail stores to do the systematically multi-attributes
comparison. If you still need people to guide you for the selection, it provides live chat function with customer service people. At the purchasing page, the website guides you step by step to finish all the purchasing. Starting from select model, then to color, capacity and carriers. With each step, there are at most 4 choices. Therefore, Apple applies same behavior logic for choice architecture for physical and online store. It provides limited selection choices to avoid too much cognitive overload; It uses single option aversions and three option comparisons in their choice architecture and has systematic comparison metrics and suggestions by expert to guide customers choose the most suitable products. Both stores also have same installation plans and 14-day return policy, for people whose present-self value more on today’s money than future-self’s long term commitment.
In terms of creating positive feeling for customers, both stores, online and offline, follow the same underlying theory of the case. They want to create a pleasant shopping journey for customers and leave customers delightful memory. For example: Apple allows people to explore and experience the store freely. For offline store, people walk around to different table and play around the products while in online store, when you scroll down the iPhone home page, you can find other product lines on the website. Online store has limitation in creating “Today at Apple”, community experience and providing in-person friendly customer services. The website uses lots of high-quality photos and motion graphics to showcase the quality of the products and their visual appeal. It also simplifies the purchasing process with clear guidance in each step to assure a smooth purchasing experience. Apple tries to use these visual enjoyment and seamless shopping experience to compensate for the lack of actual physical access experience.
To sum up, Apple uses the same theory of the case in both physical and online shopping experience. The approach is different due to constraints of different channels. It provides a limited number of product options but systematically guide customers to make decisions with multi-attributes comparisons. In addition, it builds a pleasant shopping experience to create positive affective states and cheerful memory for its customers.
Reference:
Bhattacharyya, S (2019, April 5) ‘Everything is well thought out’: How the Apple store has become a template for retailers. Retrieved from: https://digiday.com/retail/everything-well-thought-apple-store-become-template-retailers/
Agarwal, A (2017 October 9) The Behaviour Economics Behind The New iPhone Launches. Retrieved from: https:// www.linkedin.com/pulse/behaviour-economics-behind-new-iphone-launches-abhishek-agarwal/
Danziger, P,N (2017 December 13) 3 Things Retailers Need To Learn From Apple About The Experience Economy. Retrieved from: https://www.forbes.com/sites/pamdanziger/2017/12/13/three-things-retailers-need-to-learn-from-apple-about-the- experience-economy/#2b436bd61307
