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It’s Been Two Decades Since Apple Opened Its First Store

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When Apple AAPL took the wrappers off its first stores on Saturday, May 19, 2001 at Tysons Corner in McLean, Virginia, and the Glendale Galleria in Glendale, California, it was shortly after industry critics almost universally called the move a colossal mistake. Each article was more critical than the previous, saying the “last thing Apple should be doing now is opening stores that could undermine (even cannibalize) the selling channel.” This referenced the legions of electronics stores and chain retailers that sold their products. Mind you, this was after Apple had already pulled their product from most every big box, except for CompUSA, who would also ultimately lose the line.

Even Apple’s board of directors were not in agreement that the move was logical and prudent. The exception to that was board member Millard (Mickey) Drexler, the former CEO of GAP GPS , that Steve Jobs brought on board in 1999. Drexler understood the importance of “owning” each and every brand touchpoint to ensure high brand value as well as giving the small but avid legions of MacFolk a retail experience that was truly “brand-centric” and relevant.

Reimagining the Store

What the naysayers were unaware of was the way Steve Jobs, Target TGT veteran Ron Johnson, and legendary architect Art Gensler had taken a radical, clean slate approach to the task at hand. Everything that was known about electronics retailing (even specialty retailing) had been challenged and reconsidered in pursuit of brand relevance and the delivery of a unique and superior customer experience.

So intent was the groups focus on every minute aspect of the new store that a full-scale prototype was built in a warehouse, not far from Apple’s Cupertino, CA warehouse, long before a “go-ahead” was granted. Jobs said in a 2001 press release announcing the opening of the company’s first stores. “Rather than just hear about megahertz and megabytes, customers can now learn and experience the things they can actually do with a computer, like make movies, burn custom music CDs, and publish their digital photos on a personal website.”

What resulted was nothing short of pure retail theater. A melding of space, brand, and product display. They were joined by an army of highly trained brand ambassadors that raised the bar on about everything in or beyond the product category. The effort served to further cement the relationship with the legions of Applephiles and coax many millions more to join the brand. In the first weekend alone, over 7,700 people visited the two stores, spending just shy of $600,000 in the two days.

And, as has been well-reported over the two decades, the stores became highly profitable. The now 511 locations, of which 271 are in the U.S. have set records for sales per square foot, frequently reported to be in the range of $5,500 - $6,000 p/s/f. For context, that is over twice what Tiffany stores generate and four times that of Lululemon.     

Brand Unification

What is of equal importance to Apple’s sales is the halo effect the store’s have had on the brand. Because great design has been an Apple brand cornerstone, the stores are likened to the “ultimate package” containing the lustful products. They have become public gathering places and virtual temples for the legions of Apple loyalists to meet, learn, and experience all that is new and needed. This, in no small part, has contributed to Apple’s #1 position in the 2020 Forbes World’s Most Valuable Brands Top 100 list. Additionally, the stores have helped fuel the company’s current market capitalization of $2.08 trillion.

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