Is there a method to the madness that Apple (s aapl) 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.
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.