Apple Owns Their Own Stores–Why?

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by: John Caddell

Apple Computer is everyone's favorite case study right now, and for good reason. The iPod is a roaring success, the Intel-based Macs are gaining traction, and Steve Jobs just made $billions selling Pixar to Disney.

I went into the Apple store yesterday near Philadelphia, and was amazed at what I saw. At around 11am, when the rest of the mall was sleepy at best, the Apple store was packed with customers. Some people were trying out the new Macbooks, others were getting help with application programs, still others seemed to be milling around, just taking in the scene–like I was.

Apple earned more than $2 billion from its retail operations last year, according to the Wall Street Journal. In an industry where most competitors wouldn't think of investing in their own retail channel, Apple is doing so and thriving. Why?

Well, for one thing, Apple really understands what a brand is. The sum total of the products and the experiences the customer has around the products. And when you use an indirect channel, you have a third party between you and the customer. While in most cases it's worth it (Apple supplies other retailers, too), it does have a cost. Apple outfits and staffs its stores (see the folks with the black polo shirts? They work there) in a way that utterly reinforces their brand image–cool, hip and progressive.

It makes you want to buy an Apple, right then, when you're in the store. I barely got out with my wallet intact.

But I think I'll be back.

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