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Apple Retail Deconstructed: Reports & Figures

Apple FinancialsIt seems like Apple’s (s aapl) retail initiatives are always shrouded in a dark veil of secrecy. Though we often hear how well they’re doing financially, what do those numbers look like on the inside? What figures does a typical Apple store track? Straight from the horse’s mouth, here’s a breakdown of a typical financial report that shows what metrics are important in Cupertino.

Stores are given a basic set of goals, including a forecasted number of Macs to sell over the quarter, as well as a number for iPods and iPhones. Attach rate numbers also exist for One to One, ProCare and MobileMe.

In the stores, managers have access to real-time reports that show revenue and attach rates for their stores as well as the rest in the company, allowing for a quick comparative snapshot of how sales are doing.

Important Metrics

Beyond just sales of Macs, iPods and iPhones, managers are also focused on several other important sales indicators. Units Per Transaction (commonly referred to as UPT) is just what it sounds like, an average number of the units sold during each transaction. Typically this number is between one and two, as many customers will just buy one item, like an iPod or USB cable. When you experience a Specialist trying to sell you everything under the sun to go with your new iPhone or Mac, it’s really an effort to increase the store’s UPT.

The other metric that’s closely connected to UPT is the ADS, or Average Dollar Sale. This number represents the average transaction value for the day. Between selling a reasonable number of Macs (high dollar transactions) and a ton of accessories (low dollar transactions), this number typically ranges from $200-$500.

Another figure important to Apple is the conversion rate, or the rate at which people entering the store actually become paying customers. This number is often low, something that’s typically not given much thought. Some retail stores ask their employees to “slither” past sensors that count store traffic, but Apple has no official policy in place, so the volume of employees in and out can often affect this number. The system Apple uses to track visitors, however, called ShopperTrack, is extremely sophisticated, and can distinguish between something like a mom and the stroller she brings in with her, counting both as one person and not two.

Stores are also focused on EasyPay metrics as well as Personal Shopping metrics. As stores transition to less usage of cashwraps, some strive for as high as 60-70 percent of all transactions being completed via EasyPay.

All of these numbers are reviewed on a daily basis by store management in order to determine the proper direction and focus going forward. Many figures are compared to WTD (Week-to-Date) and QTD (Quarter-to-Date) numbers, as well as how the store fared in these areas on the same day in the previous year. Stores can also see how every other store in the company is doing.

Drilling Down Further, Individual Metrics

Individual numbers for Mac, iPod, iPhone and attach rate sales exist for employees as well, allowing them to see how they rank comparatively. Though the Apple Stores do not function on a commission basis, employees are given individual goals towards making the larger store goals for the quarter. These individual reports help provide feedback and focus as the quarter progresses.

Few stores put much emphasis on the accuracy of these numbers, as full-time employees work more towards helping up-and-coming part-time Specialists meet their sales goals. Regardless, it’s the responsibility of the cashier to assign “credit” for a sale to a particular employee. This can obviously become problematic when the stores are insanely busy, and Apple prefers cashiers not ask customers who helped them, as it implies they work on commission. With Apple’s emphasis on EasyPay, whoever is logged into an EasyPay will automatically get “credit” for the sale.

All of these numbers are factored into an employee’s performance reviews, held every quarter, with a more focused annual review at which employees are rated based on individual performance as well as the store’s forecasts and goals.

This should give you a better idea of how store management uses financial figures to gauge success and set targets. As you can see, there’s a lot more to it than just selling a certain number of computers. The result is that, for some, it can become frustrating to focus on sales while managers also push the importance of these other numbers. Apple’s multifaceted approach must be getting something right, as their stores continue to be wildly successful from a financial standpoint.

6 Responses to “Apple Retail Deconstructed: Reports & Figures”

  1. Very interesting article. How could a developer get access to a copy of a current matrix to verify forecasts? Any help you can provide in verifying Apple – MobileMe SaaS would be greatly appreciated.

  2. Chris, you speak about these different terms as though they are unique to Apple retail. The truth is that every retail establishment strives to up their UPT, Conversion Rates and ADS. Why are you acting like Apple invented the idea of brick and mortar stores?

  3. Howie Isaacks

    Interesting info… I wonder how you got it :)

    I enjoyed being a Mac Specialist back before I was promoted to Mac Genius. The only thing that I disliked was the attention paid to metrics. Sometimes, it seemed that attach rates for Apple Care, Mobile Me, ProCare, etc. were more important to management than the actual dollar value of the sales, and the amount of computers and iPods/iPhones sold. That’s unfortunate. Sometimes, the extra items are not appropriate for the customer’s needs. That’s why I always had a hard time meeting those attach rates goals. Oddly enough, I became much better at selling the extras after I was no longer a Mac Specialist and didn’t have to worry about my metrics anymore.

    • Joe Anonymous

      Sorry, but metrics are the way of the world. Read up on Lean Manufacturing (which should technically be referred to as Lean Enterprise because it doesn’t apply solely to manufacturing).

      One of the tenets of the Toyota Production system (which is the basis for Lean) is that you can’t improve what you don’t measure. Continuous improvement requires metrics and dedication to accurate measurement.

      You might argue that they’ve chosen the wrong metrics, but I’d bet anything that the metrics were chosen after a great deal of study and research rather than relying on a Mac Specialist to tell them what is important.