The Simple Secret Behind Apple's Retail Success

Everyone knows about Apple's (Nasdaq: AAPL) retail success. The company's achievements in creating an immersive experiential environment is definitely innovative. But the concepts behind what makes the Apple Store experience so memorable are not that radical.

The front of the store is minimal in messaging but heavy on demonstration areas. There are rows of devices that say to the consumer "pick me up and try me." A consumer does not have to be given permission to participate, it's expected. The friendly staff are easily noticeable and you are always greeted but never pressured.

Then there is the 'Genius Bar' where a branded 'Apple Genius' is ready to help you solve your technical challenges. The whole design of the Apple Store is made to invite you as the consumer to connect, and "play around." To have an engaged experience.

At Apple, customers tend to love their experiences with engaged employees in the stores. Data shows companies with a highly engaged workforce improved operating income by 19.2% over a period of 12 months, while those companies with low engagement scores see operating income decline by 32.7% over the same period.

Steve Jobs pioneered the core concept of 360-degree engagement. Emphasizing the connection between passionate employees and customer retention and thus business profitability.

Employee engagement requires an ongoing focus. Even companies that have strong levels of employee engagement, like Apple, can't rest on prior successes. It's critical to track employee engagement and to respond immediately whenever it starts to deteriorate.

The company's global stores take in more money per square foot than any other United States retailer, wireless or otherwise. In 2011, worldwide, its stores sold $16 billion in merchandise. Divide revenue by total number of employees and you find that, each Apple store employee, that includes non-sales staff like technicians and people stocking shelves, brought in $473,000. Electronics and appliance stores typically post $206,000 in revenue per employee, according to the latest figures from the National Retail Federation.(Temkin Group)

But Apple's success rests on a set of intangibles. Foremost among them is a built-in fan base that ensures a steady supply of anxious applicants. Apple's training course, which can range from a few days to a few weeks, depending on the job and locale, turns them into raving fans. The phrase that trainees hear time and again, which echoes once they arrive at the stores, is 'enriching people's lives.' The idea is to instill in employees the notion that they are doing something bigger than just selling or fixing products.

Train for key customer moments. Apple examines the experience of customers and trains employees how to deal with these critical interactions. Training commences with what is known as a 'warm welcome.' As new employees enter the room, Apple managers and trainers give them a standing ovation. There is more role-playing, this time with pointers on the elaborate etiquette of interacting with customers. ('Where's My Shrink/Employee Engagement Case Study')

Like Apple, If organizations increased investment in a range of good workplace practices which relate to engagement by just 10%, they would increase profits by $2,400 per employee per year. Recent data shows increased employee engagement was accompanied by a 12% increase in customer satisfaction and significant double‐digit revenue and margin growth over the past three years. Engaged organizations grew profits as much as three times faster than their competitors. They report that highly engaged organizations have the potential to reduce staff turnover by 87% and improve performance by 20%. A 1% increase in employee commitment can lead to a monthly increase of 9% in sales. (Social Knows: Employee Engagement Statistics 2011)

Apple's 'engagement' strategy with customers is not built around online gimmicks but with well-controlled, tightly managed, face-to-face communication between people and customers.

The bottom line: Don't ignore employee engagement.


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