Print 37 comment(s) - last by TakinYourPoint.. on Aug 29 at 3:17 PM

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 responded 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.

Sources: IFO Apple Store, Apple Insider

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The goal of a business is to make money
By tayb on 8/28/2012 3:06:51 PM , Rating: 2
The goal of a business is to make money. Apple wants to make more money.

RE: The goal of a business is to make money
By TakinYourPoints on 8/28/2012 3:58:01 PM , Rating: 2
Except that putting customer service at a higher priority than making money is what made Apple so much money in the first place. Put making money at a higher priority and strangely enough, you make less money in the long run.

Remember the Dell of the mid/late-90s? Amazing customer service. Then the race to the bottom in PC prices began and customer service was thrown in a ditch, now Dell's name in the consumer space is trash.

Quote from an article that is pretty damning.

At the most basic level, Jobs served as the champion for former retail chief Ron Johnson's vision of Apple stores focused on consumer satisfaction, and without Jobs to protect that vision Apple has slipped into a numbers-focused perspective for its retail operations.

"Johnson was champion of customer satisfaction, designing and staffing the stores to provide a superior experience for visitors and buyers alike. He was able to win over Steve Jobs with the concept that revenue and profit should be a secondary goal of Apple’s retail stores.

But in 2009, Jobs took six months of medical leave and put Tim Cook in charge of the company, including the retail stores. Cook is primarily an “operations guy,” sources explain, and his natural focus is revenues and profits, not customers. While Jobs was away, Cook and chief financial officer Peter Oppenheimer began to confront Johnson on his customer-centric retail philosophy—both felt the stores didn’t generate enough revenues to justify operating expenses."

Given that customer experience is Apple's business (even their products are a direct extension of that), they are screwing the pooch by messing with a retail formula that has worked so well for so long. It is the most successful retail chain in history, what more do they want?

RE: The goal of a business is to make money
By ritualm on 8/28/2012 5:54:01 PM , Rating: 2
Make more money so Apple can afford to increase Tim Cook's pay raises. And several other top-level execs.

If it's the beginning of the end for Apple, then this "focus shift" is a step in the right direction. Time for some popcorn.

By TakinYourPoints on 8/28/2012 7:25:27 PM , Rating: 2
It is mind-boggling that they're messing with a method that has been so overwhelmingly successful: Put user-experience before profit and profits will follow.

If this also trickles down to compromising their user-focused product and technology design, then they really will be done for.

By tayb on 8/29/2012 10:07:24 AM , Rating: 2
I've read reports of rampant waste, theft, forgery, and bribery at Apple stores. Hundreds of thousands of dollars of equipment given away to friends of employees, as perks to nearby businesses for free drinks, as payment to businesses for services rendered (personal or otherwise), as devices to shatter for fun at "Apple Parties", etc. Quote from a Gizmodo article.

But the Genius crew wasn't just yanking all these phones so they could make calls with both ears. They took them just so they could break them. Ronald used this inventory loophole—which he and Jake both say is harder to exploit these days—to go through countless iPhones for the sheer absurdity of it. At parties with other Apple employees, they'd all get tanked, pull out their phones, and spike them to the ground, laughing as the Gorilla Glass and circuits sprayed. Sounds more entertaining than flip cup, at least—and to Jake and the rest, it was a sort of game. How many phones could they squeeze out of oblivious, infinitely-stocked Apple? In the early days of the phone, the only limit seemed to be the audacity of the Geniuses. They even traded gear for free drinks.

It sounds to me that Jobs had a very laissez faire attitude about the Apple stores which led to an "anything goes" mentality among the employees with stores wasting/squandering/stealing hundreds of thousands of dollars worth of equipment. Tim Cook seems to be trying to cut down on that sort of thing and make the stores more profitable. That doesn't mean he is going to make the stores less consumer friendly.

"What would I do? I'd shut it down and give the money back to the shareholders." -- Michael Dell, after being asked what to do with Apple Computer in 1997

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