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Thread: Finely tuned retail machine

  1. #1
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    Mar 2008
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    Default Finely tuned retail machine

    The Green Monster replica on Boylston Street has been dismantled at last, and underneath we find a giant profit machine, clad in tempered glass.

    It's Apple Inc.'s newest retail store. At about 20,000 square feet, it's Apple's biggest store in America and second biggest in the world - smaller than the store on London's Regent Street but larger than Apple's outlet on West 14th Street in Manhattan.

    Maybe it's a grudging apology for Apple chief Steve Jobs's hurtful 2002 decision to move the company's giant Macworld trade show from Boston to New York. In any event, Mayor Thomas M. Menino is holding no grudges. "It's a wonderful and a great day for the city," Menino said during a media preview that attracted hordes of camera-toting journalists to the store yesterday.

    Menino might not be the ideal customer for the new store, which opens today. He doesn't own a computer, and limits his Web surfing to occasional forays on his wife's PC. Then again, Apple's shown a particular genius for attracting even the most tech-averse consumers. Visit the Boston store, and you'll begin to understand why.

    At ground level, you'll find dozens of Macintosh computers, from the tiny Mac mini desktop to the hulking Mac Pro servers. A glass staircase spirals upwards to a second level full of iPod music players and iPhones. At every step, you'll find lots of friendly, capable salesfolk. Many carry wireless point-of-sale devices that let you swipe a credit card and purchase anything you see, right on the spot.

    But head to level three, and you'll find Apple's most significant retailing innovation - service, and lots of it. Indeed, the entire floor is dedicated to customer support and education, much of it free of charge.

    Say your disgust with Microsoft Corp.'s Vista software has finally driven you to purchase a Mac, and you're in need of a proper initiation. You can sign up at the Apple store for free training courses on every aspect of Macintosh software. Haven't bought a Mac yet? Take a few courses anyway; each is an opportunity for Apple to make one more pitch.

    If your Apple product isn't working quite right, stroll over to the Genius Bar, where trained technicians will answer your questions. You can even make an appointment at Apple's website. Then there's the One to One program. For $99 a year, you get the services of an Apple personal trainer once a week for a customized tutoring session.

    You'll find these services at every Apple store, but few can serve as many customers as the Boylston Street site. Apple vice president Ron Johnson, head honcho of retailing, said that the new store's Genius Bar is designed to handle 1,000 customer inquiries per day.

    The store also features Pro Lab, a new series of free eight-hour courses for advanced training in topics like video and audio production. The big Manhattan store began running Pro Lab courses last year; Boylston will be just the second Apple store to carry them.

    Your typical big-box electronics retailer would go broke offering this level of service, said J.P. Gownder, senior analyst at Forrester Research in Cambridge. That's because these retailers sell products from many different manufacturers. If they offered special courses on using, say, Dell computers, they'd have to do the same for Hewlett-Packard as well. "They're selling so many disparate brands," Gownder said. "They can't really push any brand over any other brand."

    By building its own retail chain, and staffing it with workers who really know their stuff, Apple's stores can deliver a level of service undreamed-of at the local Best Buy or Circuit City. Other computer makers have tried this gambit, with indifferent results. Earlier in the decade, PC maker Gateway ran over 300 retail stores right into the ground. Japanese electronics maker Sony runs its own Sony Style retail chain; there's a decent chance you've never even heard of it.

    No wonder many an expert looked askance at Apple's retail strategy when the company began building stores in 2001. But in Apple's second quarter, ended March 29, the company sold $1.45 billion in those stores, nearly 20 percent of its quarterly revenues.

    So if you pop into the new Apple store, have fun with the powerful Mac computers and elegant iPhones. But spare a thought for the store itself, possibly the most remarkable machine Apple has ever devised.

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