What have we created???

[amirm]

Take a look at this picture of Apple's new store in China (Shanghai?):

There was a time that such lavish stores were reserved for people selling diamonds and high-end luxury products. Yet, this is a place to buy phones and computers. If you are an Apple user, do you feel good about paying so so much to apple as to fund such lavish things?

 

[Phelonious Ponk]

Amir, please, you sell a $25,000 mono amp.

Tim

 

[rblnr]

I'm fine with it. The stores have been a huge success for Apple -- great places to get the products in people's hands to experience. Getting people in the door with a distinctive, intriguing look is just good business. The cost of such an entrance like the one above or that on Fifth Ave in NYC is a fraction of a sliver for Apple and I'd guess that the cost on Fifth Ave is and the one above will be more than covered thru the sales generated.

 

[GaryProtein]

That store entrance isn't really different from the ones in NYC.

The Apple stores in high end areas have rather elegant entryways.

The use of structural glass inside and out is common in those stores.

 

[JackD201]

Amir, please, you sell a $25,000 mono amp.

Tim

each

 

[FrantzM]

Hi

I think this is a Masterful job of Marketing ... Apple is selling a commodity at, after all, commodities price while giving the customers the impression they are acquiring a luxury product... The most interesting thing to me is how Apple has elevated an, after all, inexpensive and ubiquituous article to the level of a status symbol.. genius

 

[Steve Williams]

I think it's genius as well and have no problem with it

 

[ack]

Take a look at this picture of Apple's new store in China (Shanghai?):

There was a time that such lavish stores were reserved for people selling diamonds and high-end luxury products. Yet, this is a place to buy phones and computers. If you are an Apple user, do you feel good about paying so so much to apple as to fund such lavish things?

What's the problem again???

 

[rblnr]

Hi

I think this is a Masterful job of Marketing ... Apple is selling a commodity at, after all, commodities price while giving the customers the impression they are acquiring a luxury product... The most interesting thing to me is how Apple has elevated an, after all, inexpensive and ubiquituous article to the level of a status symbol.. genius

I agree except that I would consider, say, the iPhone5, a commodity in quantity sold only. It's a distinctive piece of hardware/software -- perhaps the most precise and elegant thing ever produced on such a scale.

Dell, forex, makes commodities.

 

[amirm]

What's the problem again???

Well, to me it looks like the palaces monarchs build with "donations" from the people. . In what other possible context amidst a world recession, do we have no problem with such palatial digs? If the situation was different and it was say, a politician who had taken tax payer money to build such a house, would be OK with it too? Would Apple be any less successful if they had a more modest store? Or do we think more people buy their products precisely because they build these castles of retail?

 

[amirm]

Amir, please, you sell a $25,000 mono amp.

Tim

Having and selling are two different things . I am not against them having a nice facility but how far do they push and why are we so OK with it per my last response? What inside us not only sanctions that but cheers them on to build multi-million dollar retail facility that they set out to be most lavish of any to sell $2000 electronic gadgets?

 

[JackD201]

They are selling the shopping experience as well as the products. They have the best point of sale system I've ever encountered. No lines for anyone with a credit or debit card. Best sales person to customer ratio outside of luxury car dealerships and upscale jewelry stores which have small traffic. You get to play with every device they sell at your leisure. Why wouldn't they try and make the best looking store as well? Besides, if you want extravagant, they haven't got anything on Louis Viutton, Gucci or Prada aka the ones that started the trend in the first place.

 

[jazdoc]

They are selling the shopping experience as well as the products. They have the best point of sale system I've ever encountered. No lines for anyone with a credit or debit card. Best sales person to customer ratio outside of luxury car dealerships and upscale jewelry stores which have small traffic. You get to play with every device they sell at your leisure. Why wouldn't they try and make the best looking store as well? Besides, if you want extravagant, they haven't got anything on Louis Viutton, Gucci or Prada aka the ones that started the trend in the first place.

I think Jack is on to something here. Most folks can't afford a Maserati or a Porsche; they'll never have a $1000 bottle of wine; but they can own a designer purse (even if it is last season's) or the latest iphone and get a taste of more extravagant lifestyle.

 

[flez007]

What's the problem again???

None in my book...

 

[amirm]

They are selling the shopping experience as well as the products. They have the best point of sale system I've ever encountered. No lines for anyone with a credit or debit card. Best sales person to customer ratio outside of luxury car dealerships and upscale jewelry stores which have small traffic. You get to play with every device they sell at your leisure. Why wouldn't they try and make the best looking store as well? Besides, if you want extravagant, they haven't got anything on Louis Viutton, Gucci or Prada aka the ones that started the trend in the first place.

If I am in the market for a real luxury good, I not only demand the fancy store but a foot massage to go with that too. I am asking why, when the kid who makes Pizza goes shopping for an apple product, he should be paying extra for it as to fund such a luxury establishment. What if the local gas station started to put gold plated pumps in their yard and charged 3X for gas. Who would accept that? Why here?

 

[JackD201]

What if the fancy store is to attract traffic, which I believe is only a part of the design. If you look at the expense as a huge attractive billboard (the bigger part) and think of the storefront as a form of advertising, suddenly it becomes a drop in the marketing bucket, especially in a densely populated city even going by strict CTARP standards.

The argument could be made that the retail stores fund themselves given that the pizza boy could get the same device perhaps at a later date from Best Buy or Walmart. The price would be the same. One could say that they are competing with their other distributors by attracting traffic and thus volume while not competing using price. The margin they get to keep for themselves is what funds the lavish surrounds and pays the Harry Potter junior Wizard wannabees as well as quite a bit left over for their cash hoard.

 

[amirm]

I am not asking why they do it Jack. I am asking why we are so willing and even cheer them on to do it. Since when we admire when a retailer uses anything other than value to get our money?

 

[JackD201]

Since I'm not cheering, I can't answer that. The Apple Store I most frequent (Ala Moana Mall in Honolulu) is very plain jane. I do admire how they respect the existing architecture with the architectural works they commission though be it a new mall or a hundred year old building or train station. I just think that it really has no bearing on the cost per item at the consumer end. Even if they saved the dough, it's not like they would pass the savings on and risk the ire of their other distributors.

 

[AMP]

Amir, please, you sell a $25,000 mono amp.

Tim

each

... and they sound FANTASTIC!

 

[Phelonious Ponk]

Well, to me it looks like the palaces monarchs build with "donations" from the people. . In what other possible context amidst a world recession, do we have no problem with such palatial digs? If the situation was different and it was say, a politician who had taken tax payer money to build such a house, would be OK with it too? Would Apple be any less successful if they had a more modest store? Or do we think more people buy their products precisely because they build these castles of retail?

We're ok with it because it's not built on tax dollars, or on dollars that result from commodity markets or near-monopoly products, but on dollars given freely for the purchase of a superior customer experience, to a company that is succeeding, wildly, in the midsts of a world recession. Why is it easier for Apple to get away with it? Because we like them. Because we gladly, with many other options available to us, pay a premium for the aforementioned experience.

This is almost unique among huge companies. It is a kind of consumer affection usually reserved for the neighborhood store, but there it is.

Tim