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Apple Launches Fifth Avenue Retail Store
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Prior to
that, Apple sold its products mostly through a network of authorized
Apple resellers, retail chains like Sears and Roebuck & Co (Sears), and
a few large electronic resellers like MacMall, MacZone and Best Buy.
However, with the emphasis on its retail initiative, Apple severed its
relationship with large retailers like Sears in 2001 due to poor sales support. On May 19,
2001, Apple opened its first retail store at Tysons Corner Center in
McLean, Virginia, USA.
The store did business of around US$599,000
within the first two days of its launch and Apple planned to open its
second store at the Glendale Galleria in Glendale, California. |
Apple adopted this retail strategy as part of its aggressive
expansion plans and to increase its personal computer market share of 5% in the
US.
Jobs said, “If only 5 of those remaining 95 people switch, we'll double
our market share.”[2]
As of May 2006, Apple owned 147 retail stores around
the world which including the US, Japan, the U.K, and Canada. According to Retail Forward, a consulting and market
research firm based in Ohio, for FY 2005, Apple had recorded revenues of US$
2.35 billion, which was around 17% of Apple’s total sales.
This was a
significant increase from the US$ 621 million in revenues from retail stores in
FY 2003[3].
Apple also had a 44 percent growth rate in revenue per store from 2004 to 2005
in comparison to major retailers like Target Corp, Wal-Mart Stores Inc., and
Best Buy Inc, which had a growth rate of three percent to six percent.
According to Charlie Wolf, an analyst at Needham & Co., an investment banking
and asset management firm, Apple’s retail strategy reinforced in building its
brand. “It’s so consistent with what Apple is that it has really added value to
the entire enterprise.”[4]
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Continued... |
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[2] Joe Wilcox, “25 Apple stores to sprout this
year,” www.news.com, May 15, 2001.
[3] Nick
Wingfield, “How Apple’s Store Strategy Beat the Odds,” http://online.wsj.com,
May 17, 2006.
[4] May
Wong, “Apple's Retail Strategy Reinforces Brand,” www.abcnews.com, May 18,
2006. |
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