Angela Ahrendts (Image credit: Getty Images for Burberry via @daylife)
Today’s appointment of Burberry CEO Angela Ahrendts as Apple's senior vice president of retail and online stores is being met with extremely high expectations, but the reality may be much more limited. Although Ahrendts won’t begin work in Cupertino until next spring, pundits and analysts are already characterizing her as a “fashion play,” someone who will influence the company’s future products, and even as the person who could eventually take Tim Cook’s CEO job. They like her gender, her looks and somehow believe she can design a smart watch.
But Tim Cook explained her hiring very directly in an email to Apple employees. “She places the same strong emphasis as we do on the customer experience,” Cook said of Ahrendts. “She believes in enriching the lives of others and she is wicked smart.” Those remarks emphasize that Ahrendts, like the very successful Ron Johnson before her, will have enough on her plate just managing the retail operations, and will let others handle product development. (Disclosure: I am an Apple stockholder.)
Make no mistake—Ahrendts’ hiring has nothing to do with fashion. There’s nothing fashionable about the technical, financial and interface aspects of operating a Web-based store. There is really nothing fashionable about managing a chain of highly-developed and specifically-designed retail stores across the cultures of 13 countries. Ahrendts’ hiring is purely and simply about smart management of a worldwide operation, all while maintaining a tightly-defined brand. It’s significant that Cook is willing to wait nine months to put Ahrendts behind a desk at Cupertino, because he believes she’s such a perfect match for Apple’s culture. The company’s previous retail chief, John Browett, failed the culture test after just six months because he valued revenues over people. He wanted to push products, not enrich lives.
When she arrives, Ahrendts will be under tremendous pressure, if only to prove Tim Cook’s hiring savvy after the Browett mistake. But ultimately, her arrival after an 18-month retail exec vacancy will have to focus on bringing the retail stores back to their original glory, and then moving both retail operations forward. Almost all of that glory is related to customer satisfaction, and only a very small part to financial success.
Ahrendts’ retail store challenges start with a simmering dissatisfaction among a large segment of the retail store employees over pay and working conditions. Apple’s significant profit margins, revenues and cash reserves loom large over store employees who feel they aren’t sharing in Apple’s success. Groups of vocal employees point to low pay, few hours on part-time shifts, and only partial benefits. And despite that poor compensation and benefits, they must face an increasing number of customers, often juggling several at once at the Genius Bar or Personal Setup tables. Despite being told by management that, “Our soul is our people,” some retail store employees feel they are the “sole” of the company, the shoe sole.
On the other side, customer irritation with Apple’s stores is increasing. Ironically, the success of the stores has generated a key problem—too many visitors at too few stores, especially at the Genius Bars. Despite a recent trend to build bigger new stores and expand older locations, Genius Bar reservations are scarce and walk-in appointments are impossible at many locations. These are the top complaints on Twitter, along with the same complaint made by employees about juggling several customers at once. Overall, the focus on customer experience seems to be slowly wasting away, many visitors complain.
Beyond those critical cultural and employee issues, Ahrendts will have the usual challenges of any retail enterprise focused on global expansion. She must deal with the complexities of finding and maintaining a suitable staff for the stores, including language, recruiting and hiring, pay equity and employee training. For example, there have been reports that the future Rio de Janeiro (Brazil) store has been delayed for several months because of the difficulty in finding enough capable employees. The physical stores themselves also present issues, including finding suitable locations, adhering to local business regulations, understanding import and export restrictions, administering store construction, and managing taxes and financial requirements.
Ahrendts’ online store challenges are less obvious but no less critical. Opening up new territories, even electronically, involves an enormous amount of technical, regulatory and cultural expertise. Web servers have to be configured, Web pages must be translated, prices must be recalculated in new currencies. More importantly, Apple must develop a strategy to integrate the retail and online stores to improve the customer experience at every touch, including via mobile devices.
The biggest challenge for Ahrendts might simply be tactical. Should Apple double its chain to 800 stores, as some have suggested? Should it saturate China and India with stores, as the popular wisdom recommends? What is the actual value of an Apple store around the world—a point of product sale or a brand lighthouse? Looking ahead, will Ahrendts suggest that Apple create service-only stores to tame the crowds of Apple product users, or build new locations the size of Best Buy? What is the perfect balance of on-line and retail stores to provide the best customer experience?
By the time Ahrendts arrives in Cupertino, the retail stores will have been leaderless for 18 months. An excellent management team has been guiding the retail stores since then, but true leadership has been lacking. Ahrendts has the opportunity to solve some immediate problems, establish some long-term goals and define the next 10 years of Apple retail devoted to the perfect customer experience.
via fashion - Google News http://news.google.com/news/url?sa=t&fd=R&usg=AFQjCNEDEfbS00FNFqzCodWhe2s_FrVPOQ&url=http://www.forbes.com/sites/garydallen/2013/10/15/apples-new-retail-chief-is-not-a-fashion-play/
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