What You Can Learn From Apple To Market Your Store

The Apple store turned 10 this past May celebrating a spectacular and surprising success. Back in 2001 when the first two stores opened in Tysons Corner, Virginia and Glendale, California, it seemed like a crazy and desperate idea, writes Peter Gorenstein, financial blogger.

Critics asked, "why would a technology company like Apple open a brick and mortar store when the future of commerce is moving online?"

"Literally half the store is devoted to solutions because people don't just want to buy personal computers any more. They want to know what they can do with them," was Steve Jobs' answer, in a video presented at MacWorld just days before the first grand opening. Like so many of his decisions over the last decade Jobs was right.



Today, with its 300 stores across the country, and more than $9 billion in retail sales last year, Apple is arguably the most successful retailer on the planet based on sales per square foot, says Peter Gorenstein, finance writer.

According to a recent MacWorld article Jeweler Tiffany & Company's $2,700 per square foot used to be considered the gold standard, but Apple has surpassed Tiffany, generating more than $4,000 in sales per square foot. By comparison, Best Buy's sales per square foot is about $1,000, and Walmart's is about $400.

Apple has been able dominate at a time so many other retailers are struggling or have gone out of business, due in part to Apple's iPod, iPhone, iPad, Mac and iTunes offerings.
Remember Virgin, Tower, and all those independently owned music stores? You might, but your kids may not. They've been buying music on iTunes and using their iPods for as long as they can remember.

Many suspected electronics giant Best Buy would benefit when its top rival Circuit City went under. That hasn't happened. Best Buy has reported three straight quarters of declining same-store sales, including a 5.5% drop in U.S. stores in the last quarter.

Borders filed Chapter 11 bankruptcy protection last winter but Barnes & Noble isn't likely to see an increase in business, what with Amazon and the iPad and all the tablet copycats popping up. Meanwhile, direct competitors like Microsoft and Dell have had little success with their retail stores. It's unlikely fans of either will be lining up outside their doors when the next version of Windows is released.

The lesson Apple offers is to give customers a chance to interact with your product, test it out and ask questions. Going to your store should be an experience for your customers regardless of the product you sell. The more time customers spend in your store, the more comfortable they will be with your product and the more likely they will be to buy.

Green PR

Ever wonder how much energy you use every time you google something? Of course you have, says Greg Menken, VP of Sustainability at Beckerman PR. Google reports that the energy used by the company (not your computer) per average search is about 1kJ (0.0003 kWh). To put this in perspective, Google says the CO2 emissions of a newspaper is the equivalent of 850 searches, that of a glass of orange juice, 1,050 searches, and so on. But multiply that 1kJ by hundreds of billions, and you need a lot of energy.

In response to growing scrutiny of such high energy use by the tech sector, many companies are looking to economize their data center operations, hoping to save cash, ease criticism, and win customers. While it is true that an online search is greener than a trip to the library, it is also true that many technology companies, and their data centers, have developed reputations as energy hogs. Reports indicate that data center electricity use more than doubled between 2000 and 2006, and is expected to double again by 2011, climbing to as much as 10% of all energy use in the U.S. by 2020.

According to Greenpeace, if considered as a country, global telecommunications and data centers would have ranked fifth in the world for energy use in 2007, behind the United States, China, Russia and Japan. Kent Garber of U.S. News and World Report says that with increasing concern about greenhouse gases, server farms are attracting the same kind of "furrowed-eyebrow" examination as other major energy users. Environmental groups are applying pressure on data center-heavy technology companies to make their data centers as green as possible. Even Congress ordered the Environmental Protection Agency to study private and federal data center energy usage.

As reported in Distributed Energy, the industry is trying to improve its energy consumption reputation. Eaton, a power management company to data centers, has recognized that its customers are increasingly demanding that their centers be designed with maximum energy efficiency. Fairly or not, "Data centers have gained such a reputation as energy hogs. That's not a good thing to have, PR-wise," says Ed Spears of Eaton.

Greenpeace v. Facebook is a good example. Whatever your opinion of Greenpeace, this year it launched a "Facebook loves coal" type of campaign to pressure the company to use renewables to power its new data centers. The group claims that 500,000 of its own Facebook friends engaged in the campaign. True, Mark Zuckerberg is no poorer, but the company has been forced to address the issue.

Partly in response to consumer interest in green, many companies are beginning to green-up their data center operations, often as part as an overall sustainability strategy. Yahoo's new data center near Buffalo, N.Y., for example, is designed to maximize air circulation (important for cooling) and will get energy from hydroelectric facilities. Microsoft is using retrofitted shipping containers to house servers at its new Chicago data center. The container architecture requires much less energy to cool the systems. HP, ranked among the most sustainable companies in the U.S., recently built a data center in the U.K. in a cold climate that uses outside air to reduce cooling costs.

More than good PR, these innovations are being driven by economics. According to Eaton, energy costs for cooling and operating a data center have gone from about 10% to as much as 60% of some companies' entire operating budgets. Microsoft saves 30% in operating costs at its Chicago center and HP's U.K. center saves the company $8 million a year -- critical cash flow in a down economy.

Whether it's PR or economics that drive green, both will continue to play an important role in the energy and environmental decisions that technology companies make. Says Bill Kosik of HP, "The business case for green could just as easily include increasing market share by taking an aggressive stance on minimizing the impact on the environment as it could include tactical upgrades to optimize energy use." Sustainability will always be driven first and foremost by economics but, as Kosik says, tech companies would be mistaken not to realize the PR and marketing value of sustainability as well.