While many retailers cut back on brick and mortar operations, Apple has steadily grown to more locations across the globe. As a result, the company has seen a nice uptick in revenue – at least in the first half of 2011. During the first two quarters, Apple retail locations increased revenue by 90% from the previous year. However, it seems the inevitable growth rate is leveling off, leading to plateauing sales.
According to SeekingAlpha, sales growth has markedly slowed for Apple retail locations over the second half of 2011. Despite growing by more than 40 outlets this year, the Cupertino-based company sold roughly the same amount of products as it did a year ago. The company is still ahead by as much as 39% overall, but the physical store segment seems to be slowing down.
Does this mean Apple should rethink its strategy by cutting back on retail growth? Don’t count on it.
The stores give Apple an incalculable advantage over its competitors — Dell, Hewlett-Packard, Acer, Research In Motion — service and brand-building. Get in trouble with a PC notebook or tablet and you endure a maze of frustrating service calls. Pass the warranty date, you are on your own. With Apple, you simply walk into a store and receive expert and reliable help. Moreover, as biographer Walter Isaacson said: “by creating buzz and brand awareness (the stores) indirectly helped boost everything the company did.”
That hits the nail right on the head. Apple has built a reputation for going above and beyond in regards to customer service. My own personal experiences at Apple locations have exceeded my expectations. Even if retail sales are slowing, Apple can still use stores to help build relationships and earn repeat customers in the long-term. That’s certainly something worth investing in.