"...how do you explain the fact that people flock to the stores to buy Apple products at full price when Wal-Mart, Best-Buy, and Target carry most of them, often discounted in various ways, and Amazon carries them all — and doesn't charge sales tax!"
I don't mean to take anything away from Ron Johnson (how could I, who am I?), but I'd like to take a crack at answering this rhetorical question.
Apple's retail presence is unique for many reasons, but a big part of its uniqueness stems from the fact that they are the only computer retailer that has their own stores. The key point there is that you're going to buy a computer at a store owned and operated by the company that made the computer. That is entirely unique in the world of computing, and I'd speculate that there is a significant incentive present here.
When you buy something from Best Buy, Wal-Mart, Target, etc, you're dealing with a retailer whose primary interest is in keeping he customer just happy enough to come back and shop with them again. If they can find a way to pawn the customer off on the vendor, they will. It's in their interest to do so.
Every customer knows this game: You bring a product back to a retailer. The retailer tells you that you must talk to the manufacturer. You call the manufacturer, and they explain that the retailer should just accept the item as a return and give you another one... or some similar explanation.
The point is that the customer ends up bearing the burden of managing this process. What a pain in the ass! I bought this thing and I just want it to work. I want to talk to someone familiar with the product. I want to talk to someone who actually cares about my feelings about the product.
The astute reader will note that each of the typical gripes above are solved by the Apple store formula because the employees are beholden to Apple, who is also the product manufacturer. They are the final stop on the responsibility train. No one else to talk to. Retail panacea!
Consumers know this. I know more than one person who are long time Apple fans, and they'll all tell you the same thing: buy from the Apple store directly instead of a reseller because they'll take better care of you.
This whole 'you bought it from us but when something goes wrong, you have to talk to the manufacturer' thing really threw me when I first moved to North America from Australia.
Now unless things have drastically changed in the last 6 or 7 years since I moved, the big difference I saw was that back there, you deal with the place you bought it from. In fact, I was under the impression that it was illegal to palm you off to the manufacturer.
As my PC wholesaler used to say: "they are your customer, not ours... you are our customer". That is to say, if our customer had a problem, we dealt with it. If there was a problem with the hardware, then we deal with our wholesaler and they deal with theirs if need be.
Of course all the big electronics companies had support lines and so on, but yeah, I always used to take things back to where I bought them and why wouldn't I? There's a reason I gave you my custom in the first place!
In NA the retailer is only, legally, involved up to the first 30 days. After that the manufacturer warranty takes over, which can be anywhere from 90 days to 5 years depending on the device.
30 days, some items can be less and some stores (Costco) can have a longer return/exchange period.
Thanks for the clarification on that. It's kind of funny, as I haven't really paid much attention to that side of things as (1) I haven't had anything fail within 30 days... yet; and (2) I would have just assumed that they were trying to make out like they were being helpful about it, if that makes sense. Put another way, I would have assumed that it was easier to just go straight to the manufacturer anyway, despite how painful that can be.
It's a loophole in the consumer protection system. Basically you can return any item for any reason in the first 30 days, including failure, and the store can't refuse it (some exceptions apply). If you're dealing with the manufacturer your purchase can be out for repair for weeks if not months. So from a customer view it makes sense to return it to the store.
Your answer only tackles one part of the problem, and a very narrow part of it, too. If you want to return an Apple product that you bought at Best Buy, for example, it's true that you have to go back to Best Buy. But it's a process that's just as painless (or painful depending on your perspective) as doing the same at an Apple Store.
However, the case isn't true if you need to have a repair made. If you purchased a Dell computer at Best Buy, the retailer would obviously redirect you to the manufacturer. But if you purchased an Apple computer at Best Buy, you can definitely take it into an Apple Store to have it diagnosed and repaired.
You said, "I bought this thing and I just want it to work. I want to talk to someone familiar with the product. I want to talk to someone who actually cares about my feelings about the product."
You can buy an Apple product at Best Buy, Target or Wal-Mart and take it right into an Apple Store to have it serviced, so the argument that you're better off buying something at an Apple Store because they'll take care of you isn't a very good one. I bought my MacBook Air from Best Buy, and when I had a problem with the display, I took it to the Genius Bar at an Apple Store and it was fixed in a matter of minutes.
I went to a gateway store. It was a pretty bad experience. The machines were locked down and you couldn't use them. The sales people were the same kind you'd find at CompUSA (unknowledgable and myth spreading).
Sony is a little better, as they at least try to put some interesting design into their stores.
Yeah, I almost feel compelled to follow any salesperson I see at one of those stores who's helping an affable but uninformed person just so that I can correct all the false statements they're told after the salesperson goes away. It's amazing to me that people hire most of those people to represent their stores and companies. Most big box retail electronics stores are really shoddy shopping experiences.
I brought my MacBook in the other day because an iTunes upgrade broke it. Didn't have an appt. so I just walked up to the bar. In a few minutes, a guy was helping me. Tried a few things, ran some diagnostics for about 15-20 minutes. Finally found the culprit.
I asked him how much I owed (I don't have AppleCare). "Nothing." Awesome.
There are four key components that every business must have to succeed:
1. Products (more products are better up to a point)
2. Sales + Marketing (more sales are better)
3. Efficient Distribution (less cost is better)
4. Research + Development (leading to more value and higher prices)
The genius of Apple is that they've put together three more or less separate companies into a totally integrated system.
Apple USA handles points 2 and 4. Apple Foxconn handles point 1. Apple Global Retail + Online handles point 3.
Apple 1.0 originally struggled with distribution since they had to compete with all other manufacturers for shelf space.
The return of Jobs led to Apple 2.0 and the creation of their OWN distribution channels. (Note: this only applies to their bigger markets, in the smaller markets it's more efficient for them to NOT have official Apple stores.)
Their position in the market is, for the time being, unassailable given that:
1. Their giant stockpile of money and established supply chains gives then unbeatable efficiencies. 2. They have top design/marketing/sales and R&D talent and massive IP protection. 3. They have an ever growing list of retail stores to distribute their products 4. They have some degree of consumer lock-in via their app stores.
The only way they can lose, at the moment, is if they stop coming out with innovative products.
Other tech companies have retail stores such as Sony. But they are a business/engineering firm with an endless list of products. They've got something like 16 46" TV models alone. Their retail outlets can't possibly house their entire product line, making them extremely inefficient.
Japanese companies are also fond of purpose built single-use type devices that are poorly integrated together, rather than generic multi-purpose computing devices like Apple.
Sony should really throw away 80% of their product line and keep only the highest selling gadgets, then hire some new marketing and r&d talent to start building better things that people actually want. Otherwise they are toast.
I'm covered under the same Apple warranty if I buy from Best Buy or the Apple store. From anecdotal experience people buy from the Apple store because they don't know that it's the same.
Are you assuming Apple has a hidden policy to treat customers who purchase from the Apple store differently?
IMHO customers either don't know non-Apple stores sell Apple products or they don't know that AppleCare is included if you purchase your $apple_product from $authorized_retailer.
AppleCare is a separate product [1]. All Apple products come with a standard warranty, regardless of where you purchase them, but AppleCare is different. Regardless, it's available provided you buy through an authorized retailer. Although, when you buy somewhere like Best Buy, there's a good chance that the blue shirt at the register will try to sell you their Best Buy extended warranty instead, which (IMO) would be a mistake.
The differences I'm referring to are the "human error" elements. I typically know what I'm buying, so I don't run in to these issues, but I know, also anecdotally, people who have both been taken great care of at an Apple store after they made a mistake in their purchase, and people who have been burned by buying third party.
A quick example. A friend bought a white MacBook at the Apple store. He explicitly asked for the newer model with the faster processor and 802.11n capable wireless chipset. Months later (literally 4 months) when attempting to apply the wireless N update, it became clear that he did not get the updated model. The clerk mistakenly brought him a unit with an upgraded hard drive, but of the older model. After an appeal at the Apple store, they swapped out the MacBook for a brand new one with very little haggling.
I also know someone who bought a mirror-front PowerMac (yes, this is an old example) through an authorized reseller. This was back when OS X was fairly new. He was unaware that he could not install OS 9 on it, which he needed for his publishing business. When he went to Apple, they explained that had he purchased the computer directly from them, they would exchange it, but that he would have to work with the retailer.
Both of these examples wen't Apple's fault. Quite the opposite, both were the result of carelessness by the purchaser. The point is that when you buy from Apple, the extra $50-$100 buys you a little insurance. I've also run in to cases where the Apple Store staff share some information that I may not have learned from someone at a third-party retailer. These little things have value to many consumers. Not everyone eats and breaths Apple.
You're absolutely right about the pawn-the-customer-off-on-the-vendor aspect of retail.
Further, not only is the Apple store the final stop in the responsibility train, Apple does a fantastic job of handling this.
I've recently had to deal with a QC issue with my macbook. I travel full time, around the world. I bought the macbook on one continent, took it into an Apple store in another to get it repaired, they examined it and had it back to me in 30 minutes. They replaced one of the parts, but told me that another needed to be replaced as well. Due to visa issues I couldn't leave it with them (as they didn't have the part in at the moment) and left.
Months later on a completely different continent, I walked into an Apple store, and handed them my computer. They were aware of everything that happened at the other store, and did the repair at that location.
Not only did I not have to wait for my computer to be sent off somewhere to be repaired by some questionable vendor (which is the norm with a lot of Apple's competitors), but they did it on the spot, even though I'd bought the computer in a different country!
The Apple store is not only the best support experience going, its also global and homogenous. If I got to tokyo, I know I won't have have any problems because I'm from the US and my computer was bought in europe.
I completely agree with your analysis, but it only holds in countries where there is an official Apple store (vs. distributors, who at least in one location that I know of, provide a bad customer service)
The system also works well at Apple Authorized shops - I've had my stuff bought abroad repaired at a Swedish retail store that's not owned by Apple but has the "Authorized" sticker, and all that history showed up perfectly on my Support Profile (https://supportprofile.apple.com/MySupportProfile.do)
Anyway wasn't the point of the parent that Apple stores work because they're run by Apple and sell Apple products. Your point that stores not run by Apple don't work as well just reinforces what he says.
I don't mean to take anything away from Ron Johnson (how could I, who am I?), but I'd like to take a crack at answering this rhetorical question.
Apple's retail presence is unique for many reasons, but a big part of its uniqueness stems from the fact that they are the only computer retailer that has their own stores. The key point there is that you're going to buy a computer at a store owned and operated by the company that made the computer. That is entirely unique in the world of computing, and I'd speculate that there is a significant incentive present here.
When you buy something from Best Buy, Wal-Mart, Target, etc, you're dealing with a retailer whose primary interest is in keeping he customer just happy enough to come back and shop with them again. If they can find a way to pawn the customer off on the vendor, they will. It's in their interest to do so.
Every customer knows this game: You bring a product back to a retailer. The retailer tells you that you must talk to the manufacturer. You call the manufacturer, and they explain that the retailer should just accept the item as a return and give you another one... or some similar explanation.
The point is that the customer ends up bearing the burden of managing this process. What a pain in the ass! I bought this thing and I just want it to work. I want to talk to someone familiar with the product. I want to talk to someone who actually cares about my feelings about the product.
The astute reader will note that each of the typical gripes above are solved by the Apple store formula because the employees are beholden to Apple, who is also the product manufacturer. They are the final stop on the responsibility train. No one else to talk to. Retail panacea!
Consumers know this. I know more than one person who are long time Apple fans, and they'll all tell you the same thing: buy from the Apple store directly instead of a reseller because they'll take better care of you.