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Apple – THE Most Successful Retailer Today

11/30/2012

apple-storeAs we’re in the season – the season of retailing that is, it is fitting to take a quick look at the top performing retail stores in America today. Information for this article came from a piece in USAToday November 18. Today we’ll highlight three retailers of interest to us.

Apple is THE most successful retail store by a long shot.

Apple is relatively new to the retail scene, with its first store opening in 2001. Yet, Apple’s $6,050 per square foot is more than double that of Tiffany’s, the next highest on the list. Apple also has the ninth highest sales per store among companies measured by RetailSails, at more than $51 million, and the 13th highest one-year sales growth, at 28.9%.

Apple benefits from constant new product introductions and upgrades of existing ones, as well the fact that so much of its revenue comes from non-store sales. This business model has made Apple the world’s largest public company, with a market capitalization of more than $510 billion, which is more than Microsoft and Google combined.

In many ways, Apple, the most successful store in terms of profit per square feet, is different from each of the other top retailers. Companies like Tiffany, Coach and Select Comfort rely primarily on their brick-and-mortar stores. Apple makes the vast majority of its sales and profits online, with its physical stores serving as hubs to improve branding and showcase new products.

Select Comfort has 381 company-operated Sleep Number stores across the United States, selling adjustable-firmness beds and other sleep-related accessory products. That is after both opening 22 stores and closing 22 stores in the first half of 2012. But the company said it expects a net increase in store count to between 400 and 410 by the end of the fiscal year. The company’s revenue has jumped 32.6%.

Less than two years ago Select Comfort was nearly dead in the water. The CEO was maligned and the board was restless. Aided by straight-forward marketing, efficient store design and exclusive product Select Comfort’s renaissance is fodder for B-School case studies.

Another new-comer is Lululemon. Founded in 1998, Lululemon is a yoga and sporting apparel company headquartered in Vancouver, British Columbia. Not only are its sales per square foot higher than all other retailers except Apple and Tiffany, but its sales per store are higher than most apparel stores as well, even though it has substantially less store space than other companies. Still, Lululemon’s one-year sales growth was the eighth highest on the RetailSails list, and its share price is up nearly 50% year-to-date. The company said it expects to open 30 stores in the United States by the end of the fiscal year.

Lululemon is a retailer with a clear focus. Sell high quality performance apparel made with superior fabrics and enhance by a great fit. While their target audience is women, the men’s product is noteworthy and is gaining a following among the hip and fit.

Evaluating these three retailers is an exercise every other retailer should be doing right now – in the thick of the holiday season. Each has a focus and a defined target audience. They have exclusive product – not the “me too” mix one sees everywhere else. Their stores are crisp, engaging and to the point. Their branding message is tight, easy to understand and above all – highly consistent.

There’s no magic to the success achieved by Apple, Select Comfort and Lululemon. It does, however, take discipline – a skill sorely absent from most retail executives attributes.

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