Apple Make Things ‘Wonderful’.

There are a lot of people in retail who are sick of hearing about Apple as a case study example of how to do things right. Most of those people – in my opinion – take that view because they don’t have the capability to grasp the concept of leadership and continual improvement. Yet again, sitting through the September 2017 Apple Keynote, I was reminded why Apple is the most profitable company in the world. And when it comes to retail, they are in a class of their own.

When Angela Ahrendts – Senior Vice President Retail at Apple – outlined the retail strategy and store rollout the company had planned one could do little else but shake ones head in total admiration. This is a company that never, ever rests on its laurels and is constantly looking to invest heavily in making things better for customers in the face of clear and unambiguous proof that better customer experience leads to market leading profitability.

Apple is rarely first. It is most often best. It waits until it can bring an initiative to market in a manner that both it and the customer can best exploit the benefits. It does not chase gimmicks for headlines. The DNA of the business that Steve Jobs put firmly in place was for a business that understood its role was to make their customers lives more ‘wonderful’ through the application of technology that makes life better – not more complicated. Their retail model is very clear. Over-service the customer, keep it simple and create the most hands-on immersive experience possible. Keep innovating, keep investing, and keep improving.

This keynote was delivered in the same week as reporting season saw major Australian retailers blaming consumers for their own failures. In a market that has not seen a recession in 26 years, where rolling MAT retail sales are up more than 3.5% year on year and CPI is healthy (if not heady). If it weren’t for the insane level of discounting and self-inflicted retail deflation, growth would be even healthier – so stop blaming the customer.

This country’s retail leadership is addicted to ‘value engineering’ (a euphemism for making it cheaper) at every point in the value chain. Our retail stores increasingly resemble discount warehouses in look and feel and service levels are at an all time high. Most of the product is descending into me-too, cheap, flimsy dross. Decision makers increasingly believe they are competing against online retail in isolation – cutting costs and dumbing down the things that make physical retail ‘wonderful’.

Apple gets it. And because they get it they sustain margin and EBIT profit levels everyone else marvels at. It is time we got ego driven investment logic out of retail and real retail thinking back into it. The current approach from most Australian retailers is a slow form of economic suicide and a totally un-necessary and avoidable one for a large number of them. But it will take a huge change of attitude to pull off the Cultural Revolution necessary to fix them.

Watch Angela Ahrendts section of the Apple keynote address. Think about what Apple retail is doing and why. Start to understand that retail in the first world in the 21st century is about convincing people that spending their time and money with you is worth it and once you really get that, you can start to reignite the passion that makes great retail great…and profitable!