Many CEOs still believe there’s a lot to be said for delivering a full retail experience to consumers, a bricks-and-mortar totality that sublimates a brand and leaves consumers with powerful impressions and memories that simply aren’t going to be provided by e-tailing no matter how big or sharp the screen.
Apple is the absolute exemplar of that approach. Perhaps counter intuitively for a digital-era giant, its retail stores – with their ample staffing of bright, congenial sellers and trainers – have become crucial as a secondary builder of loyalty among Apple customers to the intuitive design and operational elegance of Apple machines themselves.
That’s why Apple CEO Tim Cook shelled out presumably big bucks to lure one of the most successful sitting CEOs of a major global luxury brand, Burberry chief Angela Ahrendts, to fill the vacant position of chief of Apple’s crucial retailing empire. The shiny bauble of a job was enough to get Ahrendts to move on from her success in repositioning Burberry in a challenging global environment and the $5.2-million salary that went with it. Apple itself doesn’t disclose details but according to Customer Growth Partners, sales per square foot in Apple’s stores fell 4.5% in the nine months ending June 30.
Ahrendts will come to Apple as it seeks to rev up a brand whose devices have become ubiquitous and whose stores have lost some of their initial novelty, according to a Wall Street Journal report. Apple has aggressively opened more stores as competitors have mimicked the format of its brightly lit spaces. Rivals such as Samsung Electronics has successfully knocked-off Apple’s flair with distinctive products and glitzy marketing. Samsung’s Galaxy Note 3, an oversize smartphone announced last month, includes a stitched-leather look on its back.
Clearly, running Apple’s retail operations is one of the most important non-CEO jobs in the world. Ron Johnson’s success as the first chief of Apple’s retail stores was even enough to make JCPenney’s board think he could save their company as its CEO; they were wrong. And when Johnson’s successor at Apple, John Browett, couldn’t hack it and was eased out of the company last year, running retail was so important that Cook himself took over the duties.
So Ahrendts will be counted on to apply her upscale-market savvy to an Apple-retailing operation that must help keep the brand elevated even as Apple’s product-innovation edge wanes.
Certainly something about Apple persuades CEOs to give up their title. As Ahrendts joins the company’s 10-member executive team early next year, one of her colleagues will be another former luxury-house CEO, Paul Deneve of Yves Saint Laurent, who’s working on special projects for Cook. As rumors persist about Ford’s Alan Mulally leaving Ford to take the top job at Microsoft, and (less credibly) IBM’s Virginia Romitti being wooed to run General Motors, Ahrendts decision to join Apple could become the beginning of a trend of industry jumping.