How Apple Store Give Their Customers The Five Diamond Treatment
Best Buys outnumber Apple stores 5 to 1—yet Apple makes 5X more in sales per store
Top Consumer Electronics Retailers, 2016
1. Apple Stores
○ Retail sales: $35,899,000
○ Number of U.S. stores: 270
2. Best Buy
○ Retail sales: $34,223,000
○ Number of U.S. stores: 1,332
3. Verizon Wireless
○ Retail sales: $17,515,000
○ Number of U.S. stores: 6,839
4. AT&T Wireless
○ Retail sales: $13,435,000
○ Number of U.S. stores: 2,004
5. AVB Brandsource
○ Retail sales: $5,221,000
○ Number of U.S. stores: 2,933
In 2018, Apple’s customer loyalty rate has hit an all-time high of over 90%—What makes Apple
so successful?
A Focus on Customer Service and Experience
● When Apple decided to put up its own stores, it sent its store managers to Ritz-Carlton
hospitality training
● The Ritz-Carlton’s “Gold Standards”
● From the Ritz-Carlton Credo
○ “The genuine care and comfort of our guests is our highest mission.”
○ “We pledge to provide the finest personal service and facilities for our
guests.”
○ “The Ritz-Carlton experience…fulfills even the unexpressed wishes and
needs of our guests.”
● 3 Steps of Service
1. A warm, sincere greeting
2. Anticipation and fulfillment of the guest's needs
3. A fond farewell using the guest's name
Ritz-Carlton employees reportedly have the freedom to use up to $2,000 to “rescue a bad guest
experience”
● How Apple Borrows Hospitality Techniques
○ Models the Genius Bar after a hotel concierge station
○ Allows customers to schedule visits on its app so employees are always
available
○ Ensures every employee knows and uses the customer’s name
○ Simplifies checkout process by bringing a credit card reader to the customer
○ Reduces perceived wait time by distracting guests with the latest apps or devices
○ Welcomes and sends customers off with warm, smiling greetings
● Other Tech Stores Copy Apple’s Success
○ Microsoft stores
■ Space is designed with the open, minimal features of Apple stores
■ Customers can schedule one-on-one appointments with employees
○ Samsung Experience Shops inside Best Buy locations
■ Customers can try out new devices while waiting for assistance
■ Free, personalized workshops are available to help answer questions
With more aspects of retail moving to the screen, is this focus on in-person hospitality even
worth it?
● U.S. consumers say friendly, welcoming service is 17% more important than stores
having the most up-to-date technology
Tough Times for Tech Retail
● U.S. electronics and appliance stores have lost
○ 15% of employees in 10 years
■ April 2008: 584,000
■ April 2018: 499,100
● Total retail industry gained 3.2% employees
○ 14% of private establishments in 10 years
■ 2007 (Q3): 53,303
■ 2017 (Q3): 45,899
● Total retail industry only lost 0.9% of private establishments
○ 4.6% of sales in 5 years
■ March 2014: $8.62 billion
■ March 2018: $8.22 billion
● Total retail industry gained 15% in sales
● When Tech Stores Lose Touch With Customers
● 2016: RadioShack had a 55% customer experience rating, the lowest of any U.S.
retailer
● 2017: RadioShack closed more than 1,000 stores
○ What happened?
■ RadioShack started with a clear customer experience
● Sold hard-to-find parts needed to fix and build things
● Had knowledgeable staff ready to help
■ Changed its business model to sell only finished products
● Lost its unique experience and uniquely knowledgeable
staff
● In-Store Service is Essential
○ Store experience is the lowest-scoring retail category globally, on the IBM
Customer Experience Index 100-point scale (average score: 33)
■ Digital experience: 44
■ Mobile experience: 31
■ Store experience: 20
○ Bad service sends U.S. consumers packing
■ Will leave a brand they love after
● Several bad experiences: 59%
● One bad experience: 17%
■ Top reasons U.S. consumers take their business elsewhere
1. Bad employee attitude
2. Unfriendly service
3. Untrusted company
4. Unknowledgeable employees
○ Businesses need the human touch
■ 64% of U.S. consumers feel companies have lost touch with the human
element of customer experience
● 71% would rather interact with a human than a chatbot or other
automated process
● 82% want to interact with a real person more as technology
improves
Customers are willing to pay 14% more for a hotel stay that offers a good customer
experience―what if every tech store treated its customers like guests at the Ritz-Carlton?
Sources:
https://stores.org/2017/06/26/top-100-retailers-power-players-consumer-electronics/
https://www.cirpllc.com/blog/2018/5/1/samsung-leads-apple-in-march-2018-quarter-in-us
https://www.inc.com/micah-solomon/what-steve-jobs-stole-from-ritz-carlton-and-you-should-steal-from-steve.html
https://www.ritzcarlton.com/en/about/gold-standards
https://www.forbes.com/sites/carminegallo/2012/04/10/how-the-ritz-carlton-inspired-the-apple-store-
video/#27411cfc3449
https://www.microsoft.com/en-us/store/locations/find-a-store
https://www.bestbuy.com/site/samsung-store/samsung-experience-
shop/pcmcat297800050005.c?id=pcmcat297800050005
https://www.bls.gov/iag/tgs/iag443.htm#iag443emp1.f.p
https://www.bls.gov/iag/tgs/iag44-45.htm#about
https://ycharts.com/indicators/electronics_store_sales
https://www.census.gov/retail/index.html
https://www.twice.com/retailing/what-do-amazon-and-radioshack-have-common-61671
https://www.usatoday.com/story/money/business/2017/05/31/radioshack-closes-1000-stores-week-these-72-
left/102372912/
https://fortune.com/2015/04/01/why-the-internet-did-not-kill-radio-shack/
https://www-935.ibm.com/services/us/gbs/thoughtleadership/cxindex2017/
https://www.pwc.com/us/en/advisory-services/publications/consumer-intelligence-series/pwc-consumer-intelligence-