Forget iPhone X—Apple’s best new innovation may be its neighborhood

11/21/2017
With the holiday’s fast approaching, the Internet is running rampant with news of the iPhone X stealing the holiday shopping limelight and Amazon’s Black Friday deals. However, there is an increasing shift in focus in the retail industry away from the gadget and towards the overall customer experience. This shift is apparent in Apples new retail initiative, dubbed the “Town Square”.

Apple is reinventing the brick-and-mortar model at an epic scale. The company announced, during their keynote event in September, the coming of a new retail shopping experience called “Town Squares”, to be introduced at new Apple stores around major cities in the U.S. and the world. We all know town squares as open public spaces commonly found in the heart of traditional towns and cities used for community gatherings. Apples’ take on this familiar concept aims to enhance the way consumers view and participate in the retail experience by making tangible what the tech industry is now coming to terms with: Millennials, the majority of the workforce, prefer to live and work in dense, walkable areas. This change has resulted in the steady decline of the suburban mall and the rise of outdoor “lifestyle centers” that aim to blend city streets with retail stores, restaurants and bars.

Apple envisions their town squares (or stores in this new model) will act as a gathering center for people to come together, relax, and enjoy musical performances from local artists. Equipped with technology to foster forums where people can create and collaborate, the spaces will feature boardrooms for meetings and learning sessions using Apple’s genius bars.

Emphasis on Experience
Apple’s successful strategy of focusing on the end user experience is applied consistently across all facets of Apples business including hardware, software and the retail store. It is embodied in the iPhone, where tight integration of the software and hardware creates a cohesive device that results in an experience that delights customers.

Apples is betting the same strategy will pay dividends with its new retail design, where a concerted effort has been made to eschew traditional techniques used by brick and mortar retail stores to maximize revenue and instead create the right experience for their customers, increasingly the millennial population. Millennials place a high emphasis on the experience factor, wanting the best integration of design and technology within their reach. Customer expectations are high, and brands that understand this fundamental shift taking place in the industry have an opportunity to exceed customer expectations.

Communal Spaces
Apple, in many aspects, is capitalizing on and refining the model pioneered by Starbucks: providing a communal space and culture of congregation in a retail box that melds the idea of work and chill in one location, with comfortable ambience and amenities that foster work and play. After all, when people gather together, they become more willing to spend money and share their experiences.

Apple is treating its stores much like it treats its products, according to Angela Ahrendts, senior VP of stores. The focus on managing a physical space like a product is a calculated move. Apple is flipping the model by harnessing community energy that already exists, to then shape it in a more indirect and sophisticated way. The success of Apple’s “Town Square” approach remains to be seen, but the principles behind the strategy will reveal potential possibilities to reverse the decline of brick-and-mortar stores and provide a glimmer of hope for other retailers looking to revive physical locations.

David Hewitt is group VP at SapientRazorfish.

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