13 Comments

Summary:

Do Apple Stores generate more product sales or do product sales generate more Apple Stores? The answer is probably both, but an Experian Simmons report out today may indicate that Apple targets retail locations where it already has a captive audience.

Is there a method to the madness that Apple uses when choosing cities for retail locations? After reading an Experian Simmons report that ranks designated market areas by the number of Apple customers in each, I suspect as much.

Using data collected with its Experian’s Micromarketer Generation3 analytics tool, Experian Simmons created an index that calculates a consumer propensity to own or use Apple products. A geographic market with an index score of 100 indicates the middle ground; higher scores reflect an area where consumers are more likely to use Apple wares while those with lower indices are less likely to do so. As the numbers make clear, markets with the highest scores generally have a greater number of Apple retail locations.

Source: Experian Simmons

Some notable markets from the report:

  • San Francisco – Oakland – San Jose, Calif. — With the highest index of 149, consumers in this area are nearly 50 percent more likely to buy and use Apple products than the average U.S. consumer and as such, is home to 12 retail locations. Given that this is where Apple’s headquarters is located, this makes perfect sense.
  • Boston — 31.3 percent of the Boston adult population uses Apple, earning it a spot just behind Apple’s home turf with an index of 145. Number of Apple retail locations: 11
  • New York City — Nearly one in three adults uses an Apple product — nearly 4.9 million people — truly justifying the Big Apple name. An index of 141 might be worth many Apple Stores, but the four in New York are spread out to attract the most traffic in densely populated areas.
  • Bluefield – Beckley – Oak Hill, W. Va. — With the lowest index score of 41, residents here won’t find an Apple Store within the state. Instead, they’d have to travel over 200 miles to either North Carolina, Ohio, Virginia or Pennsylvania for the Apple retail experience.

One could easily take a chicken-and-egg approach to the data and argue that perhaps there are more Apple customers in certain areas because there are more retail locations to begin with. I don’t think that’s the case, though. Customers from any market can simply purchase Apple products online — but folks in West Virginia don’t seem to be doing so.

I have little doubt that adding a retail location helps Apple’s sales, but I’m inclined to believe that the company puts more of its stores in markets where it already has a captive audience. And Apple stores are also service centers for Apple products — adding stores where you don’t have products to service may not be the best strategy for growth. Instead of repeating the mistake made by many retailers by building a store and hoping for audience, Apple builds the audience which helps support the store.

  1. “Instead of repeating the mistake made by many retailers by building a store and hoping for audience, Apple builds the audience which helps support the store.”

    This seems right (in both senses).

    Share
  2. It seems to me that the locations of stores coincide with the locations of major population centers. Doh!

    Share
  3. Looks as though there’s a direct correlation between concentrations of Democratic liberal-leaning voters and Apple stores, too. Conspiracy? Hmm.

    Share
    1. If you’re using “concentrations of Democratic liberal-leaning voters” in the Fox-synonym sense of “concentrations of educated, intelligent people willing to make an informed choice rather than let some TV talking head make it for them,” then you’re almost certainly right.

      Imagine that.

      Share
  4. This article fails to consider the fact that where there is no Apple store you cannot touch or try out any of the Apple products. Part of what drove Apple to create its retail stores was the desire to have an equal footing with the other computer manufacturers, which they could not get from the existing retail chains. This assertion is further supported by Apple’s reports that for the first couple of years, more than half of the retail purchasers at the Apple stores were buying their first Apple product.

    Nonetheless Apple clearly choses its locations to match the demographics of its customer base. It is highly unlikely that you will find an Apple store in a low rent district.

    Share
    1. “This article fails to consider the fact that where there is no Apple store you cannot touch or try out any of the Apple products.”

      Your point is well taken, but Best Buy carries Apple products — including the iPad. I checked in West Virginia since it had the lowest index in the report and there are a few Best Buys with Apple wares in the state.

      Share
  5. Perhaps I have the snobbishness of the Newly Converted, but I don’t really consider people who ONLY own an iPod to be members of the Apple Faithful. I would like to see the map with only the data for Macs, iPhones and iPads. I also find it interesting that smack dab in the middle of Texas is a red blob which could only be Austin (near the home of Dell). As they say, “if you’re too weird for Austin, you’re too weird”.

    Share
  6. We have three AAPL stores in Orlando. When the original opened, it was a wasteland. Now they are each full all day (quite an annoyance).

    Share
  7. I live in one of the dark green areas, with only a single (that I’m aware of) Apple store in the entire state.

    I really like my MacBook and iPod Touch, and I follow some Apple news online, but I’m not as obsessed as some people seem to be.

    Share
  8. Duh!!! This is why you are a blogger and not in a real business. This is the type of demographic analysis that retailers and landlords do all the time. But they also consider a myriad of factors beyond mere concentrations.

    The difference is that Apple does it better than any other retailer. The single most significant factor is $sales/sq foot. The gold standard used to be Tiffany at about $5,000/sq ft. [That is a guess based on data I looked at more than a year ago.] Apple is reported to average $7,000/sq. foot but there are indications that Apple exceeds $7,500/sq ft AVERAGE.

    Share
  9. “This article fails to consider the fact that where there is no Apple store you cannot touch or try out any of the Apple products.”
    I think we should also take into account those places outside USA, where theres no App Stores.

    Share
  10. Looking at this map, one would think there are lots of Apple stores in Colorado, Nebraska, Wyoming, Montana, and Kansas, when in fact in Colorado there are only Apple stores in Denver, there are none in Wyoming, and only one each in Kansas and Nebraska, and those are both within 1/2 mile of the eastern border of those states. Yet despite this lack of availability and retail impressions, people in these areas use Macs to a much higher degree. Interesting.

    Share

Comments have been disabled for this post