The Real Genius of Apple Retail

By shareen pathak

Walk into any Apple store and they're everywhere: blue-shirted staffers followed by a flock of avid shoppers.

They are the 30,200 employees of Apple's 324 retail stores. More than salespeople, they're brand ambassadors for Apple's myriad products and the exclusive lifestyle they represent. Without this army, the shopping experience at Apple would resemble that at any other electronics purveyor, like, for instance, Best Buy.

"What's different and unique about Apple is it has a very high level of service and lots of employees who know the products," said Stephen Baker, vice president at consumer and retail market research firm NPD Group. "They're empowered to give you lots of assistance."

The service component of Apple's retail business helps make it one of the most successful in the industry. Sales per square foot at Apple stores averaged about $4,000 in 2010 -- close to five times that of Best Buy, according to retail analysts. The iconic Apple store on Fifth Avenue in New York generated $35,000 per square foot in 2009, almost twice as much as jeweler Tiffany's three blocks away, according to real estate broker Newmark Knight Frank Retail.

"The stores are the unsung heroes of Apple Inc.," said Charlie Wolf, an Apple analyst at Needham & Co. Apple's retail business accounted for almost $10 billion of the company's $65 billion in revenue in the year ended Sept. 25, 2010.

No wonder then, that Apple invests heavily in its retail employees and routinely overstaffs its stores. According to people familiar with the operation, the Fifth Avenue store employs one staff member for every 20 square feet of retail space. That's one staffer every few feet. All a shopper has to do to get help in an Apple store is reach out and touch someone.



Open Positions

While Apple wouldn't talk about its retail operations, data from job aggregator Indeed, which includes listed positions on the company's site as well as external sites, shows almost 2,500 open positions in Apple retail. Over 600 positions are open for managers and store leaders.

There are more than 800 open positions for "Geniuses," who provide tech support for Apple products at the stores, and "Creatives," who demo products and help customers with their purchases. The rest are for inventory managers, solution engineers (who work with small business clients in the store) and market leaders who drive the retail strategy for a given geography.

In an earnings call at the end of October, Apple chief financial officer Peter Oppenheimer said the company will open between 40 and 50 stores in the 2011 fiscal year, both in the U.S. and abroad.

Getting into Apple retail doesn't mean you have to be an Apple fanboy or girl. Potential employees are tested on product knowledge, need to have a solid technical background and are put through background checks.

"They have a very tight selection process," said Needham analyst Wolf.



Employee Discounts

Apple gives retail employees sizeable discounts on products -- and since most are hardcore i-fans, the prospect of a cheap iPad is one enticement to work at the store.

Another is that the pay is higher than that of the average retail employee. The average hourly wage for a Mac Genius is around $18, according to Glassdoor. A Creative gets about $17 an hour, while a specialist -- the majority of the blue shirts walking around and selling -- will get closer to $16.50 per hour. A Best Buy Geek Squad Agent, the big-box store's counterpart to a Genius, earns about $12 an hour, according to Glassdoor.

Apple retail doesn't pay commissions. Instead, when a store hits its targets, all employees get bonuses or perks. Part-time as well as fulltime employees get benefits like health insurance and 401k contributions.

Apple also works hard to make its retail employees feel they are part of a special club. "When you're working on the floor it seems like you stepped out on a stage," said one former Apple retail employee who would only to be identified by his Twitter handle, @dpdesilva.

Managers told Robert Berry he was a "rare find" when he joined Apple Retail in October 2009 as a specialist in the St. Louis Galleria Mall. "There's this sense of 'we're special and trailblazing' and when you're in the middle of that, it's exciting," said Berry, who has since left the company for personal reasons.



Employee Loyalty

All Apple retail employees are required to sign a non-disclosure agreement when joining the company. The agreement is refreshed periodically during product launches when employees are required to sign additional documents.

All NDAs are valid in perpetuity, former Apple employees said. That makes it difficult for even ex-employees to speak about their experiences, said Allan Rooney, an employment lawyer in New York, who has not reviewed the document. A covenant of this type with a "shop clerk" is not all that common, said Rooney. "But then, again, Apple's not very common," he said.

Unique or not, the NDA is vast and covers a wide range of topics, according to former employees. It prohibits disclosing the repair process that Geniuses use to fix gadgets, how internal components work, when new products may come out as well as disclosing employment training and upcoming events.

Such a controlling culture has had its downsides. Apple retail employees recently sent messages to the press saying they are planning to create their own union. The company has a "demanding retail environment" and "unfair treatment and compensation," they complained.

Nonetheless, working at Apple retail gives even ex-employees a special aura. When @dpdesilva interviewed for his current job at a marketing company, his boss saw the Apple name on his resume, looked at him and asked "Hey, can you help me with this problem I'm having with my iPhone?"

Write to Shareen Pathak



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