Apple retail revenues per visitor reach new record
Research #Industry · 42 comments
by Horace Dediu
In the US, on a sales per square foot basis, Apple retail continues to perform twice as well as Tiffany & Co., the second best retailer, and three times as well as lululemon athletica, the third best retailer.
The latest quarter showed a 7% growth in visitors and a new record revenue of $57.6 per visitor.
As a result, the average revenue per Apple store per quarter reached $13 million, the highest level for a non-holiday quarter.
Here are some additional metrics:
Average visitors per store has steadied to 250,000 per store per quarter (average for trailing 12 months). This is a quantum increase from about 170,000 per store per quarter in the twelve months ending Q1 2010. The reason for this might be the increase in floor space of newer stores and the renovation of older stores. The new store throughput rate might be an upper bound due to fire regulations.
Employment has steadied at about 110 per store. This is a remarkable increase from less than half this level in 2007.
Hiring remains closely correlated with visits with visitors per employee per quarter holding to slightly more than 2000.
Profit per visitor also holding steady at about $12/quarter.
Retail performance remains constrained by store size (hence maximum number of visitors) and the number of stores. The strategy seems to be expanding US stores while opening new stores outside the US.
That would allow growth in visitors and hence in achieving the primary purpose of the stores: maintaining the brand's relationship with customers.
42 comments
Nigel Hietala ·
Fascinating to see it all displayed like this. I had no idea that the number of new stores per year has hardly grown. Is there any hint of a correlation between countries with Apple stores and countries with above average iPhone market share?
Mike ·
Great Apple blind forecasting if this was RIM (BLACKBERRY ) they would have only seen the downturn and only have focused on that. Trust Applelights to blindly egnor and glias over.
obarthelemy ·
Google stores (or even Samsung stores for that matter) have much more impressive numbers on a sales per square foot basis.
randomness9090 ·
Okay, so I know that you're the resident troll in these parts, but I'll bite anyway. Do you have any data to support this claim, or are you foolish as you seem?
Horace Dediu ·
What forecast are you referring to?
John S. Wilson ·
Really? Do you have facts to back that up? Because independent retail industry numbers back up Horace's premise.
cogito007 ·
You have to post this to destroy the last trace of rational discourses.
Chaka10 ·
Curious why Apple is not opening more stores in Japan (none since '07), given how well iOS does in that market. Hmmm.
Horace Dediu ·
There are no Google retail stores.
obarthelemy ·
that's a fake it wasn't me
davebarnes ·
I would like to see "sales per square foot basis" fall by 20%. My local Apple stores are too small.
pablo bañados ·
"breakfast at apple's"? and samsung's would be: in cold blood.
oases ·
I wonder if the number of financial shenanigans and product mishandlings by employees have been reduced.
Walt French ·
No, zero divided by zero cannot be compared to Apple's actual sales and actual square feet data. Your trolling notwithstanding (and fer chrissakes, why are you so interested in turning “obarthelemy” into a synonym for “irrelevance to the topic of somebody else's choosing”?), Google has neither more nor less sales per square foot.
Perhaps someday we'll be interested in Best Buy's store-within-a-store concepts for Apple and Samsung, but that's not on the table here, either.
Walt French ·
That's the problem with trolling… pretty soon any bullshit will be associated with your name.
Not you? Go ahead and disavow the claim, say “actually, Apple's store sales are pretty awesome.”
Pretty easy, if that wasn't actually you.
Walt French ·
I've patronized 7 Apple stores (4 Bay Area; 2 NYC; Minneapolis Mall of America) and sometimes they've indeed been awfully crowded. But I've ALSO gotten exactly the service I needed in each.
As an urban dweller, I am used to being close to lots of bodies. As an Apple customer, I'm always appreciative of finding a sales/service person who understands what I want and makes the transaction right.
qka ·
The new store throughput rate might be an upper bound due to fire regulations.
Or it might be an upper bound on how crowded the customers are willing to tolerate, or how many products are on display and can be examined by how many people without fighting over them.
Rudolf Charel ·
Most people don't live near an Apple store or ever visit one. They still buy Apple products though. Either by visiting an authorised dealer or by ordering on line. I for one have the option of travelling 150 miles to either Amsterdam or Paris for the nearest `Apple store.
iObserver ·
Chaka10
I lived in Japan several years ago. Japan is a different country with a very complex economy and culture. I've spent a lot of time in the districts of the store locations Apple already has:
Sapporo in Hokkaido Shinsaibashi in Osaka Ginza in Tokyo (they call it Japanese 5th avenue) Shibuya in Tokyo-nightlife area and hosts the busiest intersection on Earth Sakae in Nagoya (2 other cities I haven't been to)
These are ideal locations. In Japanese cities transit is extraordinarily convenient and each major subway station branches out into essentially little sub-cities. You can get anywhere very quickly in their cities, so a store doesn't need to be everywhere. By limiting the Apple locations to these there is generally never an Apple store more than 45 minutes away anywhere in a city. So adding extra stores wouldn't really make them much more accessible, just in more locations. By limiting them to the absolute coolest, most popular, awesome shopping areas they get to have 100% of their stores in just those locations.
pablo bañados ·
It's all very nice. Still one wonders: - historically, revenues of Apple come from G7 countries, with marketshare approaching 40-50% there; with some "small" pearls of high income places (switzerland, sweden, holland); then the big market BRIC countries would come as a planned second step (that's why China is here). Almost perfect correlation with stores openings (anomalies of spain and its 3% ios marketshare aside). - But, if Apple's income are obtained 2/3 from abroad, as Cook is declaring these days regarding the cash/tax issues (an objective fact, btw), why they waited until having over 200 stores in USA to be serious about Applestores in the rest of the world? - Apple pundits cite the lower marketshare, Android having so much larger one worldwide. But, given this Applestore pattern: would you say Apple is interested at all in global marketshare? If not, why doesn't the management make some convincing argument about this and give some breath to their investors? (don't mind, I know the answer, and it is not pretty).
darthno ·
Horace, you should do a comparison for federal taxes between the oil companies! According the this article, Exxon paid Zero to the US treasury last year vs $6 from AAPL. http://thinkprogress.org/climate/2013/02/01/1525441/exxon-chevron-2012-profit/
Not sure on the accuracy here, but you maybe able to have the final word.
Walt French ·
These claimed shenanigans/etc that you've seen alleged: by definition, they reflect the alleging parties' interpretation of individuals—and almost exactly the opposite of what Apple is said to be striving for.
They may be true, but “the exception that proves the rule” because Corporate cannot control every instant of every customer interaction. Or, they could be allegations to try to justify an individual's efforts to get his abused product fixed under warranty. Perhaps, they reflect Apple's policy to try to get away with a different policy than they proclaim officially, but that should result in widespread reports of unfair treatment.
What they cannot be, however, is Apple's policy to violate their own policies. Asserting that is logically inconsistent.
I've made heavy use of Apple's warranties as well as general “fitness for use” standards that every business is implicitly held to. (For example, when my iPhone5 dropped its LTE connection when I asked Siri for maps, I complained that something was “not right” and got a replacement phone on the spot.) I have occasionally seen Apple employees not understand whether a problem was just a freak or whether it was intrinsic, but I have never seen them suggest that an actual service issue was somehow my problem. So these “shenanigans and mishandlings” that you cite: let me suggest that 10% of them are flaws in Apple's system, and 90% of them are attempts to get something from Apple that they didn't pay for.
Gaurang Donovan ·
Are these points worth considering?
a.) With the 20th store in Australia opening this Saturday in Adelaide, the 407th Apple Store will have opened.
82.3% are in US, UK, Canada & Australia
17.7% are in countries where English in not an official language
Should we tally stores inside vs outside the US but also stores outside the English language speaking sphere given this data set?
b.) The stated management policy of opening 30 to 50 stores per year has not increased since 2007 despite dramatic increases in users and revenues. Why has it not been increased to 55 or 60? Or dare I say 80?
c.) No new Japan stores after 2007 with plenty of cities and customers yet to be covered. Was the early initiative there a combination of Tim Kobe of Eight Inc consulting white paper for then Japan travelling Steve Jobs with the whole notion of having their own retail stores developed as well as a store within a store concepts?
d.) Is 82.3% vs 17.7% seen as unbalanced and acceptable? Or normal? By whom?
e.) The One Stockton Street store in San Francisco will be closed as it faces 4 more years of transit construction on its doorstep and the New Union Square San Francisco Apple Store will open in its place. First failure of Apple Retail store location not due to lacklustre performance but developments outside its 2003 selection process? Will there be corporate repercussions? Failure can be acceptable given the success of the One Stockton Street store to date.
Mark Jones ·
In 2006 and even early 2007, Apple received 65-66% of its revenue from North American and Retail operations. (Most of Retail was US back then. And iTunes was far from global.) The iPhone 3G is the product that Apple used to push further internationally in 2008.
Mark Jones ·
“Why has it not been increased to 55 or 60? Or dare I say 80?”
Apple’s retail store expansion has been like their R&D growth --- slow and steady, possibly not to outstrip its ability to deliver quality stores. The rate has increased from about 25 to 40 per year (excepting 2008) over the last 11 years.
And even faster, if you recognize that international stores demand more resources (new teams) given the cultural adjustments, and different legal and administrative processes to understand and follow. For the most part, Apple has settled into entering one new country a year. 2003-Japan; 2004-UK; 2005-Canada; 2007-Italy; 2008-Australia, China, Switzerland & Germany; 2009-France; 2010 Spain; 2011-Hong Kong; 2012-Netherlands & Sweden. Note that many of the first stores in a country trailed the first rumors by a significant amount.
2012 may signal a new rate of entering 2 countries per year. In any case, there have been rumors of Apple scouting or even signing leases in Brazil, Ireland, Portugal, Russia, Turkey, New Zealand, and Belgium.
Mark Jones ·
It sure looks like Apple has significantly slowed retail employee growth, despite growing numbers of visitors. Maybe the ability to check-out with any employee or with just the app has had the expected impact, and now the primary limitation to visitor growth is the physical capacity of the stores.
obarthelemy ·
That's the problem with cluelessness: people don't even spot the difference between an authenticated user and one who isn't.
Jake_in_Seoul ·
And no official Apple stores at all in South Korea or Taiwan. These are substantial markets left fallow. Maybe there is some sort of agreement with the licensed retailers?
Walt French ·
Apple famously lost its head of retail during this period and in any case, seems ALWAYS to have been very leery of over-allocating — to stores, to number of SKUs, to headcount in its development teams.
I believe that MOST companies are mostly limited by the bandwidth of their most senior, most savvy execs, so if you combine Apple's long-standing standard of excellence in all that they do, this conservatism is far from surprising. I'm OK with the insistence of not diluting quality in pursuit of volume. Just like the org structure that Horace recently called out, this appears to be an enduring Apple value that has survived the CEO transition utterly intact.
Horace Dediu ·
Apple is defined by its priorities which are to make "the best products." It's up to everyone to interpret what that means in terms of market share and the number of stores internationally. Management has made this point many times over so I don't know what more they can do to satisfy curiosity.
Horace Dediu ·
I don't think there are any mysteries related to the tax code. As far as I know all the information is public. Not sure what I could add that's of value. Perhaps a tax accounting blogger could help?
Horace Dediu ·
"Productivity" defined as the number of employee minutes per visitor has actually decreased, but not much. The average has been 13 minutes since 2011, including last quarter. It was 10 minutes from 2007 until 2010.
claimchowder ·
Well, if it walks like a duck and talks like a duck... Those posts sure sound like you, and they come from an account that appears to bear the same name byte-for-byte as yours.
Kizedek ·
He means that some usernames are in bold type and you can click on them to open a pop-up, and some are grey and unclickable.
iObserver ·
It must take you forever to read these posts, what with you clicking every name of every poster to verify their credentials.
obarthelemy ·
Actually, since *I* have a clue (a rare luxury it seems) I just look at the color of the name.... You guys should try and stop reinforcing strereotypes...
shivakumar ·
it would be interesting to see the Gross Margin return on investment as the tech business is a working capital intensive gig. I suspect it could be in the region of 1.4 or 1.5
jeff g ·
Clearly, with those kinds of stats, Apple is doomed;)
jeff g ·
The 'egnored' and 'gliased' over ones!?
Jacob Willliams ·
Is there any other retail store that sells 95% of it's own products? I'd like to know what "brand" has the highest revenue per square footage. On another note, can we claim that redbox has a comparatively high rate of return per square footage?
joe ·
Horace, Where is this data coming from?
Horace Dediu ·
Apple. Statements by management in earnings conference calls.