Report: Apple Retail Stores Now Focused on Revenue, Receive Budget Cuts
August 28, 2012 8:57 AM
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Apple's new retail chief looks to trim the fat
Odd things have been happening at Apple retail stores over the last few weeks. Earlier this month, reports started surfacing that a number of retail workers at Apple store locations had been laid off. Apple
to those reports by saying that it had "messed up" in its retail hiring formula but hadn't laid anyone off.
"Making these changes was a mistake and the changes are being reversed," said Kristin Huguet, Apple spokeswoman, at the time. "Our employees are our most important asset and the ones who provide the world-class service our customers deserve."
However, reports are coming in that Apple stores are seeing their budgets cut, and a bigger emphasis is being placed on revenue. With a
market cap of well over $600B
and record profits quarter after quarter, it seems a bit odd to be placing such a heavy focus on revenue and cutting the budget of its retail outlets which have historically been very customer friendly.
reports that employees still haven't received an official explanation of changes made in staffing levels, and that signs continue that Apple is focusing on revenues and profit instead of customer satisfaction.
According to sources cited by
, employee performance standards have been modified to place an emphasis on sales functions. Reports also indicate that more small products will be stocked at Apple retail stores and several budget categories for the retail outlets have been cut, including the budget for store maintenance.
Sources say that workers are allegedly being evaluated based on the number of contracts sales for iPhones they're able to generate and a number of "essentials per hero product" sold with each product such as cases, and accessories. The sources also indicate that the number of training areas in stores is being reduced to accommodate the extra small products and accessories.
IFO Apple Store
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8/28/2012 3:00:53 PM
Cutting back on retail is about the worst mistake Apple can make.
Customer experience and satisfaction
Apple's business, everything they do is the product of that.
Apple stores are probably the most successful retail business in history. Pinching a few pennies to compromise this, thus making for a worse customer experience, is horribly shortsighted. Their retail is insanely successful, customers love it, and you're already making money hand over fist, so why mess with a winning formula?
Cook and Co sounds like they're backpedaling but I'm certain that they'll try to compromise on retail again. Its the first time I've made this complaint, but this would
have happened under Steve Jobs.
RE: Huge mistake
8/29/2012 7:37:22 AM
I'm not surprised this is happening. Consider how their rivals are now catching up (or beating them) in market share now. The only way to make those profits increase is to cut the retail stores back.
Good for them, this is the beginning of the downfall for them. Once customers start getting pissed off that they aren't getting good service on their 'high quality, over priced' goods, they'll realize paying half the price for the same thing is actually a good idea, even if it has Android on it.
RE: Huge mistake
8/29/2012 3:17:46 PM
Your argument is based on the idea that Apple's profits are declining. Their profits and sales figures are rising faster than anywhere else in the industry. The iPhone by itself makes more money than Microsoft Office and Windows combined. The growth of Android phones hasn't been at the expense of the iPhone, both are selling more units as the market continues to expand.
RIM and Windows Phone have been the main casualties so far, and even among Android handsets you're seeing a dominant player emerge, Samsung, while HTC and Motorola see stagnating or declining sales.
"Half the price for the same thing" is also false, given that something like a Galaxy S3 costs the same as something like an iPhone 4S (and soon iPhone 5) with or without a contract.
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