The story
Third-party retail
Steve Jobs, co-founder of Apple, returned to the company as interim CEO in 1997. According to his biographer Walter Isaacson, Jobs began a concerted campaign to help sales by improving the retail presentation of Macintosh computers. Even with new products launched under his watch, like the iMac and the PowerBook G3 and an online store, Apple still relied heavily on big-box computer and electronics stores for most of its sales. There, customers continued to deal with poorly trained and ill-maintained Mac sections that did not foster customer loyalty to Apple and did not help differentiate the Mac user experience from Windows. In fact, the retailer trend was towards selling their own generic in-house brand PCs which used even cheaper components than those by major PC makers, increasing retailer overall margins by keeping the manufacturing profits. This "provided a powerful profit motive to convert customers interested in buying a Mac into the owners of a new, cheaply assembled, house brand PC".
Tim Cook, who joined Apple in 1998 as Senior Vice President for Worldwide Operations, announced the company would "cut some channel partners that may not be providing the buying experience [Apple expects]. We're not happy with everybody." Jobs severed Apple's ties with every big box retailer, including Sears, Montgomery Ward, Best Buy, Circuit City, Computer City, and OfficeMax to focus its retail efforts with CompUSA—which reached an agreement to establish dedicated departments for Apple hardware, staffed by trained employees and representatives. Apple also worked with local user groups to promote launch events for new hardware and Mac OS releases.
Between 1997 and 2000, the number of Mac authorized resellers dropped from 20,000 to just 11,000. The majority of these were cuts made by Apple itself. Jobs proclaimed that Apple would be targeting Dell as a competitor, with Cook's mandate to match or exceed Dell's lean inventories and streamlined supply chain. Jobs made an open statement to Michael Dell, "with our new products and our new store and our new build-to-order, we're coming after you, buddy." While Dell had operated as direct mail order and online order company, having pulled out of retailers to realize greater profit margins and efficiency, Apple had direct orders with sales handled by its channel partners, other mail order resellers, independent dealerships, and the new relationship with CompUSA.
After a retail design concept by Marc Newson was abandoned, a revised concept for an Apple "store-within-a-store" was designed by Eight Inc.., a San Francisco-based firm who had developed Apple's presences at the MacWorld expo; they were designed as a self-contained showroom with more minimalistic design that emphasized the products themselves. After a trial at retail outlets in Japan, CompUSA began to adopt the new concept for its locations beginning in 1999. The "store within a store" approach still had shortcomings; acting as a mystery shopper, Macworld writer David Pogue observed that all but one of the locations he visited had employees who actively steered him towards Windows PCs and attacked Macs (such as claiming they did not have software available); the company's PR director Suzanne Shelton stated that finding "specialized" talent was difficult. Despite this, CompUSA sales of Macs had increased. Apple then added Best Buy as a second authorized reseller. Challenges still remained, as resellers' profit margins on selling Macs was only around 9%, and selling Macs was only worthwhile if ongoing service and support contracts were provided, of which retailer experiences were inconsistent.
Online store
In 1997, the year Steve Jobs returned to Apple, Dell founder and CEO Michael Dell was asked how he would fix Apple. Dell responded: "I'd shut it down and give the money back to the shareholders". This angered Jobs, due to Dell's success with its online store originally built by NeXT, his former business that Apple acquired to bring Jobs back. A team of Apple and NeXT employees spent several months building an online store that would be better than Dell's. On November 10, 1997, Steve Jobs announced the online store at an Apple press event, and during his keynote speech, he said: "I guess what we want to tell you, Michael, is that with our new products and our new store and our new build-to-order manufacturing, we're coming after you, buddy."
In August 2015, Apple revamped the online storefront, removing the dedicated "Store" tab and making the entire website a retail experience. Later, in August 2021, a redesigned store section of the website returned, with products still being able to be purchased directly through their respective pages.
Jobs ended the Macintosh clone licensing program, and in September 1997, acquired the largest clone manufacturer, Power Computing. In November 1997, the online Apple Store launched and adopted a build-to-order manufacturing model similar to that used by Dell. By the end of 1997, Jobs had returned Apple to profitability, reporting a profit of $309 million.
Origins
Jobs believed the Apple retail program needed to fundamentally change the relationship to the customer, and provide more control over the presentation of Apple products and the brand. Jobs recognized the limitations of third-party retailing and began investigating options to change the model.
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In 1999, Jobs personally recruited Millard Drexler, former CEO of Gap Inc., to serve on Apple's board of directors. Apple then hired Allen Moyer, a former Walt Disney Imagineering executive, to lead real estate and construction for the retail program. In 2000, Apple hired Ron Johnson, vice president of merchandising at Target, to serve as Apple's senior vice president of retail operations.
The retail and development teams, headed by Moyer, began constructing a series of mock-up Apple Stores inside a secured warehouse in Cupertino to test different layouts and design concepts. Jobs collaborated with Johnson, architect Art Gensler, and design firm Eight Inc. in developing the final store design. Gensler's firm was retained to design the first 100 Apple Store locations.
On May 15, 2001, Jobs hosted a press event at the Tysons Corner Center store in Tysons, Virginia, near Washington, D.C., one of Apple's first two retail stores. Both the Tysons Corner and Glendale Galleria in Glendale, California stores opened at 10 a.m. local time on May 19, with the Tysons Corner location opening three hours earlier than Glendale because of the time difference between the East and West coasts. More than 7,700 people visited the two stores during their opening weekend, spending a combined US$599,000 (equivalent to $1,089,000 in 2025).
Expansion
Several publications and analysts predicted the failure of Apple Stores. However, the Apple retail program established its merits, bypassing the sales-per-square-foot measurement of competing nearby stores, and in 2004 reached $1 billion in annual sales, the fastest of any retailer in history. Sales continued to grow, reaching $1 billion a quarter by 2006. Then-CEO Steve Jobs said that "People haven't been willing to invest this much time and money or engineering in a store before", adding that "It's not important if the customer knows that. They just feel it. They feel something's a little different." In 2011, Apple Stores in the United States had an average revenue of $473,000 for each employee. According to research firm RetailSails, the Apple Store chain ranked first among US retailers in terms of sales per unit area in 2011, almost doubling Tiffany, the second retailer on the list. On a global level, all Apple Stores had a combined revenue of US$16 billion. Under the leadership of Ron Johnson, the former senior Vice President of Retail Operations, the Apple Stores have, according to an article in The New York Times, been responsible for "[turning] the boring computer sales floor into a sleek playroom filled with gadgets". The Apple Stores have also been credited with raising the company's brand equity, with Scott Galloway, Professor of Marketing at New York University Stern School of Business, stating that the Stores are the "temple to the brand which is this unbelievable experience called an Apple Store, and then you have this very mediocre experience called an AT&T or Verizon connect your phone experience for Samsung and the other Android players".
Apple has since re-established ties with major big box retailers like Best Buy and Staples. Authorized Apple resellers have a dedicated store-within-a-store section, offering a distinctive Apple-style experience to showcase products. The relationship with Best Buy calls for the company to send Apple Solutions Consultants (ASCs) to train Best Buy employees to be familiar with Apple's product lineup.
In an interview with Funke Mediengruppe in May 2021, Deirdre O'Brien commented, "Apple is sticking to its plan to open more stores around the globe in the future."
Influence
Apple Stores have considerably changed the landscape for consumer electronics retailers and influenced other technological companies to follow suit. According to The Globe and Mail, "Apple’s retail stores have taken traffic, control and profits away from Verizon as well as electronics retailers, such as Best Buy, that once looked at wireless phones as a lucrative profit source". CNET has reported that the "Apple retail experience hurts Best Buy" and noted, "Buy a MacBook at the Apple Store and it's hard to go back to the Best Buy Windows laptop buying experience". The publication also wrote that "Apple salespeople are generally more knowledgeable, the products themselves are generally higher quality, and the stores are more appealing, aesthetically and practically."
In October 2009, reports surfaced that Steve Jobs and his retail team would help "drastically overhaul" Disney Stores. His involvement was described by The New York Times as "particularly notable", given his work on the "highly successful" Apple Stores and his election to Disney's board of directors in 2006.
In August 2009, the London Evening Standard reported that Apple's first store in the United Kingdom, at Regent Street, was the most profitable shop of its size in London, with the highest sales per square foot, taking in £60 million a year, or £2,000 per square foot.
Many other electronics retailers from around the world such as Huawei, Samsung, and Xiaomi started to follow the designing trend of Apple Store.
Redesign
In May 2016, Apple significantly redesigned its Union Square Apple Store in downtown San Francisco, adding large glass doors for the entry, open spaces with touch-sensitive tables and shelves for product displays, and rebranded rooms for the store. "The Avenue" is the central location for hardware, as well as for receiving advice from salespersons and "Creative Pros" with specialized knowledge of music, photography, creativity, and apps. The "Genius Bar" becomes the "Genius Grove", a tree-lined area for help and support. "The Forum" features a large video screen and offers game nights, sessions with experts in creative arts, and community events. "The Plaza", while limited to select locations, offers a "park-like" space outside the store featuring free 24/7 Wi-Fi access and will host live concerts on some weekends. Designed by Jony Ive and Angela Ahrendts, the idea was to make Apple Stores into "town squares", in which people come naturally to the store as a gathering place, and to "help foster human experiences that draw people out of their digital bubbles". The new design will be adopted to every store Apple has, and while renovation is undergoing, stores are either relocated or temporarily closed.
In April 2017, Apple announced that its "Today at Apple" educational sessions, which launched with its Union Square redesign in 2016 and offer more than 60 free hands-on sessions for creative skills, will also be expanded to all of its stores.
Starting May 2018, a Video Wall was added to stores around the world, and upgraded in some stores like Apple Palo Alto.
From Wikipedia’s article on Apple Store (online), shared under CC BY-SA 4.0.4