Blog Post

Five Apple Retail Flops

Fifth Avenue

As Microsoft (s msft) proudly ventures into the retail world that has already seen quick entrances and exits by other vendors like Gateway and Dell (s dell), many Apple (s aapl) fans are looking towards the new Microsoft stores with mixed feelings.

Some of the more dedicated fanboys are quick to call Microsoft a copycat (and perhaps rightly so), but one thing that is certain is that retail is a tricky environment where you can quickly sink or swim. With Microsoft’s first retail stores right around the corner, I wanted to look at some instances in Apple’s retail history where it, for better or for worse, missed the mark.


EasyPay With the stores seeing more traffic every year, Apple devised an innovative way to maintain more personal experiences with Specialists while also keeping traffic moving as quick as possible. The EasyPay solution, based on Windows CE, is a mobile device that functions as a Point of Sale (POS) for Specialists to use in completing a customer’s transaction.

While more advanced functionality has been added to these devices over time, including support for education discounts, split tender, and the like, the devices are still plagued by their lack of speed and reliability. Turning a negative into a positive, these devices were the first to allow customers to receive their receipts via email, which for those who have tried it, is super convenient. The question remains though, why has Apple not embraced the iPhone or iPod touch as a device to replace the bulky EasyPays?

Colored Shirts

One of the unique things many realize when visiting an Apple Store is how the employees stand out. For the first six years, Apple employees wore similar colored shirts that sometimes were differentiated by phrases or titles pertaining to an employee’s speciality. Though in more recent times, as Apple has shifted towards segmenting their store into different “zones,” Apple has moved towards having employees wear colored shirts that are unique to their position.

Specialists are found in light blue shirts while Creatives and Geniuses are prominently wearing dark blue. The rhyme and reason behind this could be one of two paths, making it easier for managers to quickly see where employees are located and/or to allow customers to easily determine which employee might be best to assist them based on their situation.

The truth of the matter, however, is that the colors are utterly confusing for many visitors. When stores are crowded, customers rarely seek out the “right color” employee, but rather are just happy to find any employee who might be capable of helping them. Teaching customers to recognize the difference between the colors and the corresponding roles in the store does take time and can be very hard to do, especially when many visitors to the store are still first time customers.

The iPod & Studio Bars

A few years ago, the “big picture” of Apple’s retail plans were to envision the store as divided into two areas, the “Red Zone” and the “Family Room.” The Family Room, located at the rear of many of the stores, is an area where returning customers come back for services like the Genius Bar or personal training. Along with the launch of the “Family Room” came the idea of giving stores a dedicated “Studio” bar and a dedicated “iPod” bar.

Similar to the comments expressed above about “training” customers to realize the right type of employee they need to find in the store, it was very difficult to show customers which bar they needed to visit for their needs. On top of this, the stores still face many customers who just “show up” at the bars (the Genius Bar especially) and are still unaware of the need to or process of making an appointment. Personally, I loved the idea of the dedicated bars as they provided a great resource and focus, but as time passed and space constraints became another problem for Apple to deal with, both of these bars got the boot.

The Red Phone

Red Phone When the retail stores first opened, the Genius Bar featured a simple white back counter with one lone red telephone in the middle. This red phone, inspired by the original red phone during the Cold War, was to allow stumped Geniuses a quick connection to the Apple mothership where a definitive answer to any problem could be found. In reality, many stores never used the red phone (after all, the idea was the Geniuses are supposed to be geniuses, right?) and it was simply relegated to a more iconic status as it sat on the counter. Eventually the phones were removed.

The Theater

Another staple item found in the original retail stores was the theater, a large area in the back with a large rear projection screen and bench seating for customers. The theater was used often for product presentations and special events, including live streams of the MacWorld Keynote addresses for several years. Eventually the theater’s usage dropped and the area became a place to sit and wait for a Genius Bar appointment while enjoying looping product demo movies.

During remodels in 2006, many stores removed their theaters (though a few still have theirs, besides the flagship stores). The removal resulted in a dramatic increase in the brightness of the stores and allowed for more Genius Bar expansion. This was probably a good move, as Apple could still offer close interaction with large groups of customers via its Studio Bars, but the removal of those has made large product demonstrations more difficult.

Some may see these examples as instances where Apple has put business interests ahead of the customer experience that it prides itself on. Others may see these examples as instances where Apple has learned from mistakes and came out with a better experience in the end. With Microsoft opening its first stores soon, it will be interesting to see the trials and tribulations it experiences and how its retail strategy, like Apple’s, will evolve to sustain growth and profitability.

Stay tuned to the next part of this list tomorrow.

32 Responses to “Five Apple Retail Flops”

  1. The kind of high-end storefront Apple has been rolling out in New York, Beijing, and the like begs the question how commodity vendors like Dell (and by extension, Microsoft, which requires bargain-basement commodity boxes produced at thin margins by efficient OEMs in order to make Microsoft’s pre-installed products seem inexpensive) hope to make money copying Apple’s retail behavior. High-rent retail locations don’t make sense for commodity products, and taking on support overhead works against MSFT’s historical margins strategy (to push support to OEMs to retain maximum profit). Given that MSFT’s new OS isn’t working against Apple‘s apparent long-term trend toward higher penetration, and Apple’s component purchasing power places it in a position from which competitors have a hard time profitably chasing Apple’s various products, it seems that a “me-too” retail strategy will either be vastly overpriced for its delivered profit or will be a transparent effort to dress up a trailer park like a community of established brownstones.

    I predict both Dell and Microsoft will find retail an inefficient way to reclaim high-margin share from Apple. I suspect Apple will continue to hold and expand high-margin business despite effort to compete on price.

  2. I loathe the EasyPay system, and the cashwrap-free store experience. It is cumbersome and slow for small purchases, and has pretty much discouraged me from casual Apple Store visits. It removes the focus from the store, and makes the entire experience very un-Apple like. Every EasyPay transaction I’ve conducted has been slow, socially awkward, and often fraught with error. (Card reader doesn’t work, machine can’t connect to the printer, etc.)

    In addition, the lack of a “front” to the store makes the entire store feel cluttered. Walking into the Biltmore (Phoenix) store feels like running a gauntlet of multi-colored shirts. (That there are often more Apple employees than customers milling around doesn’t help.)

  3. Tom Ross

    The Gateway Country Stores were not a “quick entry and exit”. Gateway opened their first stores in 1996 and decided to close them 8 years later, in 2004, after they had bought eMachines and started to focus on retail chains like BestBuy. There used to be almost 200 stores around the US, mostly in rural areas.

  4. I don’t see this list as flops by Apple’s retail unit, but as evolutions in that unit. You can take any retail chain and devise some things they no longer do, or that don’t work 100% every time. This doesn’t make them flops. It just means things change, for a number of reasons.

  5. Alltough I love the personal training sessions. They need a more dedicated area set aside for that. At the woodfield and old orchard stores no matter what the accessory I need or want to look at is right behind were they are training a customer. Bad design to use product display tables as classroom desks

  6. It was the one in the Staten Island Mall, and the one in the Palisades Center, both in New York. I didn’t notice what software they were using but neither one swiped my card; they just entered the card number on the app. At the end, like with the Easypay terminals, they just asked if I wanted my receipt e-mailed to me and out I went.

    I haven’t been to either store in about a month to buy anything so I don’t know if the pilot program is still going on, but I do know that one of the tech blogs pointed out that they were working on doing the transition a few months ago. It surprised me to see them as fast as I did.

  7. Seriously Chris? Easy Pay is a flop?

    Wow. Okay. If you say so. I’ve never met anyone that agreed with that line.

    As for replacing the units with iPhones and iPod Touches… When was the last time you were in an Apple Store? About two months ago, I was checked out on an iPod Touch. I returned to another Apple Store in a different location a few days later, and was also checked out on an iPod Touch.

    It’s one thing to do a lazy list post. It’s another to get so much wrong. As Michael correctly noted, the only thing you kinda got right was the theater, but in NYC’s SoHo Apple Store, I’ve been to numerous special events there that were hugely attended, not to mention the classes for their products.

    You really need to get yourself together the next time you wanna lazypost a top 5 or top 10 list. Seriously.

    • Hi Vinny, I am curious about how your checkout on an iPhone/iPod touch worked. Did you notice what app they used? Did they have an attachment to swipe your card? Where were the stores that had this?

      Thanks for your details, I am very interested in this.

  8. Michael

    What a huge waste of an article. The only item remotely feasible to be considered a flop would be The Theatre. No one ever used that. But the others? That was the best you could come up with? Apple must be fantastic in the retail scene then.

  9. digiphile

    Sandeep’s comment wins for most informed on the security issues around taking credit cards on a wireless POS Device.

    And the rest of the comments, I think, reflect a reality: by allowing retail associates to easily swipe cards and process transactions, Apple earns substantial customer good will every time.

    Is it surprising that the device is running Windows CE? Well, sure, at first glance. But the integration with their systems is notable, as is the fact that Apple used the technology available, despite it being a Windows device. That’s about customers, not culture or credo.

    Honestly, I’m not sure I entirely agree on any of your points.

    Whatever your opinion may be, objectively it’s hard to call any of them a true “flop” – like, say, the Cube or the Lisa.

  10. I’ve never understood why anyone thinks that the “Apple Store Experience” is anything but truly awful.

    Take my local store for example (the “mini” store in Santa Rosa California). The only signs in the entire store are the price placards by products. Where’s the cash register? Where do I go for help? What’s the deal with the Genius Bar? I need an appointment? Where and how is it made? Etc. Etc. Etc. Don’t get me started on that stupid carry around credit card widget. My store has exactly one. And only the manager gets to use it. Result: a store with six active employees – four floor helpers that can accomplish exactly nothing for you, a genius with whom you have to make an appointment to even make eye contact with, and a manager who does everything and who always seems to be “on break.”

    The last time I used the store (and believe me, it was the LAST TIME) all I wanted to do was something very simple. I bought a retail copy of Photoshop CS3 upgrade. It seemed simple enough, pick up box off shelf, take to cashier, pay, leave. Oh, wait, there’s no cashier. Well there was a line at the counter at the back. Oh, wait, that just formed naturally. The other 15 “customers” thought that was the check-out counter too. Too bad it was the Genius Bar. No help there. Long story short, after 43 minutes (yes, I timed it), going through every employee in the store until they found the only person who could ring up sales (the manager), I finally (and do mean FINALLY) left the store with my purchase. It would have been longer if 7 of the 15 people in front of me hadn’t given up and walked out in disgust (like I would have done if I wasn’t in desperate need).

    I wish this was some kind of anomaly, but, sadly, it’s like this every time I go in there. And, for the sake of my sanity, will be never again. The Best Buy “experience” may be lacking, but at least there’s no mystery as to how one actually buys something.

  11. Easy Pay a flop? EASY PAY? I Love EasyPay! I never have to wait in line, don’t have to get handed off from one employee to the next, and I get an emailed receipt. It’s freakin brilliant, and everyone I know who shops @ an aple store – geek or not – loves it.

    A morning radio show I listen to spent several minutes one morning talking about how great it was and why doesn’t every store do it etc. It’s far from a flop…

    Frankly this whole aritcle is a little odd – a phone that didn’t get used much is a ‘flop’? And colored shirts? Very very odd article here.

    • I agree. EasyPay is one of my favorite features of the Apple Store, as I’m pretty much in and out every time (minus the time I spend oogling things before I actually make my purchase). I’ve always found the colored shirts easy enough to decipher, and even when I didn’t, I asked the first person I found and they quickly directed me (brought me even) to the correct person.

      I can’t say anything for the Red Phone or the iPod/Studio Bars, as my regular Apple Store never had them in my time going there. My local store also doesn’t have a theater, but I was recently in a store that did, and I sat in on a rather entertaining and informative presentation on using GarageBand, where they were teaching how to edit a podcast.

      If these are Apple’s flops, I’d say it’s just one more reason why they’re retail experience is better than most. Now, if we want to talk about crappy retail experiences, we could always talk about Best Buy…

  12. Coming from someone who worked in an Apple store, I would hardly call the Easy Pay a flop. Out of the hundreds (possibly thousands) of transactions that involved the Easy Pay, maybe two actually had a real problem (a reboot during the credit card processing stage).
    I had many customers who were shocked by the convenience. The funny part is the employees get so accustomed to using it that when people want to use cash or a check we panic. Haha.

  13. Daniel Folsom

    The worst Mac store I’ve ever seen is the one in Clarendon (near DC). It used to be my go-to store, but then they merged the checkout desk and the Genius Bar (are all stores doing this?). Anyways, it took me three trips to figure out – there’s no sign-indication that the Genius Bar is for checkouts, so for a while I thought you had to find an employee in the right colored shirt. I understand the aesthetic choice, because the store is a lot more spacey now, but now long lines are an “always”.

    Now I go to the one in Tysons – which still has the theater (and the checkout desk!). I didn’t know that the theater was an “old” thing – I thought the one in Tysons just had it because it was larger than the Clarendon store. Interesting article.

  14. the idea of bunch of nerds calling themselves “geniuses” boggles my mind. I will never refer to anyone as a genius unless they have at least a doctorate and the degree paper on the wall to prove it. what were you thinking apple? I’m sure it was meant as a tongue-in-cheek thing, but still wrong imo.

    i would accept something like “expert” or “knowitall”, but genius? i don’t think so. a lot of real geniuses don’t refer to themselves as such by virtue of being humble…

    In my opinion this thing should die and should be filed as the 6th apple flop.

    • Don’t know about you, but just because I have extensive training in a task does not make me a genius. It makes me an expert.

      In most people’s everyday usage, the term has special exclusive meaning that is earned (e.g., Mozart, Einstein, Noble-laureates and winners).

      I guess I am forced to retract my previous statement that simply having a piece of paper saying you are a genius does not necessarily makes you one. My point was that the term is being besmirched by apple and it will soon lose it’s true meaning.

      Simple experiment: yell the word genius and see how many people think about the apple store vs a renowned scientist/artist.

  15. With iPhone/iPod touch now working with accessories attached to the dock connector, Apple must be working on a replacement for the EasyPay with a card swipe attached to the device and a custom app to process payments.

    If they do this, they should definitely look to market this to stores big and small.

    • I know they are working on an iPhone/iPod app for it, from discussions I’ve had, I’m not sure if they will add a dock support swipe system or not. But it would be intelligent, right now they key it in and all the other employees find it rather annoying because EasyPays keys are so small.

    • I think the problem will be a few things:

      1. PCI compliance
      From a PCI compliance perspective, the hardware, both the iPhone / iPodTouch and credit card swipe needs certification.

      2. Enterprise Device Management (tried and tested solutions like Afaria, SOTI, WaveLink, etc don’t exist for the iPhone platform).

      I don’t think Apple’s approach to device management is sufficient — although it’s a start. Keep in mind the Motorola PDT 8800 (which is the device Apple uses currently in it’s stores) is a success for Apple because:
      a. It is ruggedized
      b. These devices do not grow legs and find it’s way out of the store
      c. Proper device management to lock down the device and comply with PCI

      Not saying it’s not doable, but they have a long way to go.