Apple Retail: The Problem Is The Success, Part 1

Last August, I spent my last day working in Apple retail as a part-time Apple Specialist after 11 years (actually, just short of 11 years but damn close enough to round). Having worked that long, I have seen massive changes at the stores.

If you’re reading this, you no doubt have read other articles on the web that critique Apple retail. Open letters to Tim Cook explaining why they left the company. I understand the frustrations that these folks have had and have seen them first hand, so I’m not going to counter argue their points.

But first, let’s take a walk through history.

2005 — Pre-iPhone

When I started in September of 2005, the iPhone was still two years away from being released. Apple retail was just over four years old at this point. The store I was part of the opening crew on was R143. Now there is nearly 500 stores worldwide.

I remember when the first two stores were announced, it was almost universally panned as the worst idea ever and doomed to failure within a year or so. At the time, Gateway (remember them?) was in the process of shuttering their stores, so from an outsider, I guess it’d be hard to understand why Apple would be interested in going into retail.

But Apple has always has a problem of third parties selling their products. Before Apple retail, if you wanted to look at a Macintosh, you had to go to places like CompUSA, Circuit City or Sears. And none of them, unless they employed an Apple fanatic, could care less about selling you a computer. The Window’s machines were where the money was for them to sell, not Apple. And by that, I mean where the salesmen (mostly men, I guess), got most of their spiffs, etc.

Apple started exploring the idea of retail when they partnered with CompUSA to develop store-in-a-store concepts, where Apple would put an Apple employee there to represent the brand and answer questions. This was the test bed for Apple retail, or at least where they would probably get a lot of market research to develop the stores from.

The stores were developed by two people with strong visions, Ron Johnson and Steve Jobs. I have no idea what it was like during the development period, but I can imagine with Jobs’ attention to detail it was probably a highly frustrating and rewarding experience for Johnson. One he, unfortunately, couldn’t replicate at J. C. Penny years later.

The stores were developed, as Jobs would say later, to support the launch of products like the iPhone and iPad. And they were designed to allow people to come in, get a feel for the product and hopefully, buy one.

When I worked at CompUSA years before starting at Apple, I applied to be in a sales role. I wasn’t given a position because of my answer to one question, “On a scale of 1 to 10, how important is money to you?”

If you’re looking to be in sales, the right answer is “11” because they want that to be the driving factor when you’re selling shitty Window’s machines to customers who don’t know better. Because they want you to sell the machine and then attach CompUSA’s outrageously priced service plans, etc. The attachments where where the money was for the sales folks, and if money wasn’t important to you, you probably weren’t going to push those attachments as hard as you need to.

When I applied for Apple, I was asked a similar question, but I don’t recall what it exactly was, but my response was along the lines that I prefer soft sales, where I sell the right product to the customer and not push attachments on to them. At the time, that was a good answer and the philosophy at Apple retail.

The Early Days

When you’re not selling an iPhone, a day’s sales in the upper 5 digit range was a really good day for Apple retail. Of course, we had exciting launches like new iPods or new computers where we’d all excitedly talk about what may be announced at WWDC, etc. When Burger King launches a new Whopper, do their employees get excited about it, or is it just another job to do switching out the window stickers?

It was fun to do overnights switching out the products with the new ones when you’re one of the first people to play with them. Of course, training in those days was non-existant before the product was launched. We’d go into launch day haven’t absolutely no training except for some information on one sheet of paper and be expected to answer questions. I’m sure I’m not the only specialist who read voraciouly on the internet about every new release so I can look like I knew what I was talking about.

Even by the time I left, if the product was brand new, it wasn’t expected to have any training on it because the two week period between announcing the product and launching it probably didn’t give much time to the retail training teams to develop good info sheets. We had some training about the Apple Watch, but it was still a scramble to get one to play with on launch day so you were comfortable demonstrating it.

Even worse was that two week period between announcing a new product and launching it when everyone is coming in to ask 1) if we had them on display and 2) what the differences are between it and the older product.

Apple retail, at least, had an end-all solution to these issues: “I’m not sure, let’s find out” and you’d walk over to a computer and pull up Apple’s webpage for the product and hopefully be able to show the customer what they were looking for. At least, that’s what we’re trained to do. I’m pretty sure there’s a large percentage of Apple Specialists who give answers without really knowing the true answer.

One day, I’m hanging out in our store and happen to hear conversations between specialists and managers where the answer given by the manager was patently false. For example, on behalf of a customer, the Specialist asks a manager, “Can the iPad be used as a second screen for a Mac?” Manager, “No.”

The correct answer, which I had to step in on, is “Apple doesn’t provide this kind of functionality natively on the iPad, but there are third-party solutions that allow you use the iPad as a second screen for your computer.”

That’s the nice way to say it, but I’ve never been a politically correct person, so I probably said something along the lines of, “What the fuck? Yes it can be used as a second screen with software.” Much like Jobs, I don’t entertain the folly of fools.

We’re Not Circuit City

In the early days at our store, which is located in Florida, we couldn’t sell AppleCare. Story was that someone at a Best Buy (or CompUSA or another) used slick talk to sell an attachment service plan to an unsuspecting lady who happened to be the mother of Florida’s then Attorney General, Charlie Crist. Crist created a law that required personal liability on a company’s Board of Directors to sell service plans, etc.

Or something like that. But at the time, Apple wasn’t willing to do that, so we didn’t have to try and attach AppleCare to our products. That meant our only attachment goal was ProCare.

Attachment rates at Apple were not individual mandates, but set for the store. So, if the store achieved an attachment rate of X% for the quarter, everyone would get a bonus (the size of which was different if you were full-time or part-time).

The idea being that overall the store should be able to soft-sell the attachment to users who were interested in better service at the Genius Bar or wanted individual training for only $99/year. I mean, it should have been an easy sale. Training at CompUSA charged almost that per hour.

Of course, what would happen, is that as the quarter was drawing the a close, our closing meetings the manager’s would stress how important ProCare was. If we were only a couple of units away from meeting our goal, employees would buy them so as a store, we’d make our bonus.

And there were always the rumors of how other stores operated. We’d hear the rumors that some Specialists would discount an iMac $99 and add in the ProCare so it was essentially free for the customer. Or other “shady” things. This we’d learn because said customer would then come into our store and ask what that charge was on their receipt.

The worst thing that eventually started happening was the hard-sell on ProCare to customers. This, I think is what eventually drew the line for Apple.

At one of our Quarterly Meetings, Ron Johnson announced that because of the bonus structure, Apple was becoming Circuit City in how they sold attachments. Going forward there would be no more bonuses. Instead, everyone will get a pay raise to compensate for the removal of the bonus and we’ll all go back to representing Apple like it should be.

And that lasted for a little bit…

I’ll pick up this story in my next post when the iPhone bomb is released and all hell breaks loose.