Apple CEO Tim Cook took the stage March 9 in the company’s live-streamed ‘Spring Forward’ event in San Francisco, to show off new products and unveil updates of existing products.
Cook announced an exclusive partnership between Apple TV and HBO – just in time for the new season of ‘Game of Thrones.’ He also touted a slimmer, meaner Macbook. But it was the eagerly awaited Apple Watch that was the star of the show. In stores in April, the device will show text messages and emails, help users track fitness and health, and allow watch-to-watch communication. The watch goes on sale (preorder, and to try in stores) on April 10. The basic aluminum Apple Watch Sport is priced from $349 (38 mm version) to $399 (42mm). A steel version ranges from $549-$1,099. The gold Apple Watch Edition starts at $10,000.
Apple is widely credited with shaking up traditional brick-and-mortar retail in America with its sleek, cutting-edge stores. Many are in prime downtown locations — sparkling, airy glass cubes with soaring ceilings and a fluid open-plan inside. Salespeople greet customers at the entrance and wander the floor conducting transactions and providing technical assistance. There is no fixed spatial hierarchy for locating cash registers, customer service, and inventory for sale.
But it’s not a retail style or layout that necessarily lends itself to showcasing and selling fashion accessories like watches — even if they sport all the mobile technology Apple has to offer.
“Watch stores are very luxurious places,” says Ian Sherr, executive editor at CNET News. He says Apple faces a challenge: “If you’re going to sell a watch for $10,000, how are you going to attract that kind of customer into your store?”
Typically, Apple stores only carry a few devices and models—with a few size and case-color-variations. Customers spend their time test-driving the technology, trying out apps and features, discussing memory and screen-size and processing speed with salespeople. But for watch sales, says Sherr, “people will want to try different watch bands, different sizes, so that’s going to change how the retail experience works.”
Apple is entering a market that’s struggling. Smart-watches from competitors including Pebble, LG, and Samsung haven’t been huge sellers so far. Analyst James McQuivey at Forrester Research believes Apple will have an edge with consumers, though, and could drive widespread adoption of the small wearable mobile devices. “You really aren’t going to believe a fashion piece for thousands of dollars from some of these other watch makers, the way you will from Apple,” says McQuivey. He believes Apple’s long history of design innovation — in both physical devices, and the user-interface — could encourage consumers to at least try an Apple Watch.
McQuivey doesn’t think Apple will try to compete for traditional luxury consumers and watch connoiseurs, even with its new $10,000-plus gold offering. “That Rolex buyer wants to go into a dealer, they want to have a personal conversation over a cherrywood desk,” says McQuivey. “What Apple is going to do is steal the next Rolex buyer, the one that’s 27 or 33 today.” That’s a consumer who is likely already comfortable with Apple’s retail style and stores.
Sherr and McQuivey agree that Apple-store layouts and displays will likely be revamped to showcase the new smart-watches as fashion accessories. Apple recently hired the former CEO of luxury brand Burberry, Angela Ahrendts, to run its brick-and-mortar and online stores; analysts believe one reason for bringing Ahrendts on was to get ready to promote and sell the Apple Watch. James McQuivey predicts store employees will be encouraged to adopt a new script, and to temper their characteristic low-key straight-talking advice-giving: “They’ll get those Apple in-store salespeople to say ‘Well, while you’re here, just try this on. Oh, it looks great on you.’”
As a nonprofit news organization, our future depends on listeners like you who believe in the power of public service journalism.
Your investment in Marketplace helps us remain paywall-free and ensures everyone has access to trustworthy, unbiased news and information, regardless of their ability to pay.
Donate today — in any amount — to become a Marketplace Investor. Now more than ever, your commitment makes a difference.