In Steve Jobs, Walter Isaacson talks about the seven industries that Steve Jobs revolutionized: personal computers, animated movies, music, phones, tablet computing, digital publishing, and retailing.
As we approach Thanksgiving and "Black Friday," the most important day in retail, let's consider how the Apple Stores changed business retail, which is the topic of Chapter 29 in the Jobs biography. It's easy to forget how dismissive experts were when Apple decided to enter the retail business in 2001. "Maybe it's time for Steve Jobs to stop thinking quite so differently," wrote Business Week. Of course, the Apple Stores went on to achieve record breaking success, despite such doubts, because they had a mission that was about more than providing a place for transactions with customers. Jobs envisioned the stores as a center of consumer conversation--word of mouth--for the entire Apple enterprise.
As Isaacson explains, Jobs realized in 2000 that for Apple to be successful, it needed to have a way to communicate directly with customers, and the best way to do that was with retail stores. But it's not just a conversation between Apple's employees and its customers that matters, but also customer-to-customer communications. "In July 2011, a decade after the first ones opened, there were 326 Apple stores," recounts Isaacson. While the stores proved to be very successful from a sales perspective, "the stores did even more. They directly accounted for only 15% of Apple's revenues, but by creating buzz and brand awareness they indirectly helped boost everything the company did."
In other words, retail for Apple was not only a sales channel but also a word of mouth channel. The Apple stores became a center of consumer conversation—those that happened on premise, as well as the stories of a great shopping experience shared later, at the water cooler or over the kitchen table.
There is a valuable lesson for all brands here. According to research by my firm, the Keller Fay Group, 5% of all brand conversation actually occurs inside stores. While not a very large percentage, it is a very large volume, as consumers are exposed to in-store brand conversations some 750 million times per week. One of the real benefits of a strategy which focuses on retail environments is that word of mouth conversations that take place in a store are by far the most likely to have active recommendations to buy or try the brand being discussed, and they have the highest levels of purchase intent.
What sparks in-store conversations? Some are driven by the product package itself, and some as a result of in-store displays or videos. Some are just a matter of people shopping together and talking about the relative merits of one brand versus another, or about which brands are offering deals that day and are therefore worth buying. But retail is also a place where people can see and sometimes sample products that excite them, and share the excitement with friends or family in the store.
This is the key to Apple's highly successful retail stores – they are a place to shop and buy, but they are also a place to experience Apple products and get caught up in the emotional energy that seems to just compel visitors to talk to one another.
With the holiday shopping season upon us, it's a strategy that all brands should be thinking about. Is your brand doing all it can to maximize its word of mouth at retail?
Ed Keller, CEO of the Keller Fay Group, has been called "one of the most recognized names in word of mouth." The publication of Keller's book, The Influentials, has been called the "seminal moment in the development of word of mouth." Ed can be contacted at firstname.lastname@example.org. You can follow Ed Keller on Twitter: @kellerfay
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