Posts Tagged 'Apple'

Can Circuit City make a comeback?

Whoever bought the Circuit City brand after the store’s demise a few years ago plans to revive it — both as an e-commerce site and as a re-engineered brick-and-mortar store. The question in front of RetailWire panelists: Does the world need a revived Circuit City? (Or, as their headline put it, “Can Circuit City come back from the dead?”) Here’s my skeptical point of view:

This reminds me of the Linens-N-Things saga, in which the brand survives as an e-commerce site but its physical stores are long gone. There simply wasn’t the need for two similar big box concepts, so Bed Bath & Beyond turned out to be the survivor. (But BBBY stock price has fallen sharply in the past five years, like many retailers, as it faces increased competition from Amazon and others.)

It’s hard to see what value Circuit City brings to the table at this point — except as a web-only play. Does a small-footprint “experiential” store offer something different from Best Buy or Apple? (Especially now that Best Buy is removing CD’s from its physical stores, it’s easy to see that they will roll out more engaging and productive uses of that space.) The Circuit City brand was already “damaged goods” because of bad decisions they made to reduce customer service and in-store expertise.

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Applying the “4 P’s” to the Amazon model

One of the oldest tenets of marketing and retailing theory is the importance of the “Four P’s” — product, price, place, and promotion. RetailWire panelists recently discussed how to apply these principles to a game-changing retailer like Amazon. Here’s my take:

The discussion of the “four P’s” makes sense as far as it goes — and it rightly points out that assortment is more important than price to the Amazon customer. But there are other secrets to Amazon’s success that deserve at least as much attention.

First, Amazon’s predictive technology does an industry-best job making purchase recommendations based on shoppers’ past buying and browsing behavior. Second, Amazon has created an Apple-style “ecosystem” (from the Kindle to the Echo) enabling its own hardware to drive e-commerce sales. And, finally, Amazon’s TV advertising does a great job creating an emotional connection between the company and its customers.

All of these points would mean little if Amazon didn’t execute well. The level of trust between Amazon and its customers may be the most important brand-building exercise of all.

An Apple store inside Macy’s?

Catching up a bit by posting a September RetailWire comment about an Apple location inside Macy’s flagship store in Manhattan:

Part of Macy’s problem is its Herald Square-centric approach to the business, and this is another example. The flagship store in Manhattan has always been a showplace for new shop concepts and brand features, especially because it’s an easy place to show off to those members of the investment community who don’t do channel checks around the country.

Meanwhile, there are hundreds of Macy’s stores across the country — not just the 100 likely to be shuttered next year — that are in desperate need for capital investment and revamped merchandise assortments. Not long ago, I visited the Macy’s store at the University Town Center in La Jolla — and even though a brand-new Nordstrom store is being built next door, this Macy’s store hasn’t had a facelift (paint, tile, carpeting, lighting) in a long time.

So is a partnership between Apple and Macy’s a good idea? Sure, but it can’t mask the long list of issues that Macy’s management needs to address nationwide.

Can Apple restart its growth trend?

Recent reports from Apple, about the slowdown of its key iPhone business, have observers worrying about its underlying strategy. Here’s a recent comment (from RetailWire) on the topic:

To some extent I agree that Apple can learn from the kind of profitable incremental volume that Amazon generates with its cloud services and membership revenue. But at heart Apple is a different kind of company. Its brand promise is based on product development (not just ancillary services like iTunes). And the product development has been lagging for the past few years, especially on the smartphone side.

The perceived saturation of the iPhone business, and the change in pricing strategies by the phone carriers for the past couple of years, are major disincentives for the annual trade-up frenzy that used to drive Apple’s business. The company needs to worry about how to jump-start its smartphone business, but more importantly Apple needs to figure out where the next game-changing product is coming from.

Apple unveils a new store design

RetailWire panelists offered our opinions about a new Apple Store prototype recently opened in Memphis. Here’s my take, among a lot of dissenting opinions:

It’s hard to mistake the Apple Store for anything else, even in its new iteration. (And yes, I’m seeing the same logo on the right side of the storefront.) Apple can certainly afford to experiment with its design concept and functionality, as it faces more and more imitators and as its own assortment of products and cloud-based services continues to grow. Keep in mind that when the original Apple Store rollout began, there were no IPhones, no iPads and no iCloud.

Location strategy: Not just for upscale retailers

“Location, location, location” is one of the oldest cliches in retailing but with more than a grain of truth to it. On a recent RetailWire discussion, panelists took on the topic in terms of site selection for upscale retailers. I comment (below) that it’s an issue for any concept and any price segment:

Yes, being in “the best malls” in a given metro area is important for retailers such as Nordstrom and Apple. As the discussion points out, these companies are especially smart about expanding at a deliberate pace in order to maintain their brand equity along with the halo effect of comparable brands in a high-traffic setting.

But location choices matter to all types of brick-and-mortar retailers, not just those located inside high-traffic malls and upscale town centers. Costco, for example, thrives in locations that might not be considered high-traffic (or high cost) because of its strength as a destination store. Being a magnet for a wide trading area in a low-cost location can be just as important for reinforcing a retailer’s branding message.

Amazon’s Echo: Where’s Apple in this product category?

You’re probably seen or heard about Echo, the voice-activated “smart assistant” from Amazon. RetailWire panelists recently discussed why Apple has been slow to gain traction here, and I added my thoughts:

This seems like the type of category where Apple would move faster than the competition, but perhaps they are aiming to be a “fast second” while learning from somebody else’s wins and losses. But Apple-watchers have made the same argument for years about Apple TV, which has yet to make a significant dent in the streaming TV battle.

So — for now — advantage definitely goes to Amazon. It’s not just a matter of developing an innovative technology (as with the Kindle) but their ability to link Echo to its entire e-commerce ecosystem. This is something that Apple simply can’t compete with, regardless of the products it develops in Echo’s wake.


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