How Steve Jobs Reinvented Retailing, Pt. 3
Published in CSP Daily News
Refuse to accept that a task or idea is "impossible"
NEW YORK -- In this final look at Apple CEO Steve Jobs' effect on retailing, we focus on some ot the more intangibles or retailing, or actions based on Jobs' ethos. This area typically is more difficult to define and put into action, but often brings greater rewards.
Keep it simple.
Steve Jobs believed "simplicity is the ultimate sophistication," but he knew that achieving simplicity is complicated. He described innovation as "the thousand 'nos' before you get to 'yes'."
He became deeply involved with the details of retail, as well as the big picture. He decided on big stores in high-density locations and focused on the consumer experience. He built a full-scale model in a warehouse and spent huge amounts of time in it focusing on the customer experience.
He saw the need to simplify the checkout process and pressed Larry Ellison, the CEO of Oracle, to develop a simplified payment system that would eliminate the need for checkout counters. He knew that customers should "intuitively grasp the layout … as soon as they enter" and created a simple but unique store design to "impute the ethos" of the brand and rely on digital images to deliver its messages.
For convenience retailing, some of the suggested opportunities are:
- To explore how available technology could streamline your checkout system.
- To simplify your store design using digital technology to deliver your messages and "impute the ethos" of your brand.
- To make sure your customers can "intuitively grasp the layout" on entering.
- To eliminate clutter.
- To make sure your retail offer is focused, different, appealing, instantly understandable and easy-to-buy.
Have end-to-end control of the product line.
Jobs wanted to control the customer experience from the start of the process--the product--to its end--the way it is used. The "Genius Bar" in Apple Stores keeps customers coming back, and the linkage between the products, as well as the introduction of new products and services, keeps them in the fold.
In convenience and food retailing, two companies come to mind that begin to exemplify such end-to-end control:
Trader Joe's, where 80% of products are unique to its stores.
Wawa, which has developed a strong brand and private-label program, a combination commissary-delivered and in-store-prepared foodservice program, extensive employee training and, of course, an almost cult-like demand for their coffee.
On the other hand, an example of a huge missed opportunity is the exit by the major oil companies from convenience retailing. Contrast the attitude of the typical Big Oil CEO--who was dragged kicking and screaming into c-store retailing, never wanted anything to do with it and got out as soon as possible--with that of Steve Jobs' (at his death the CEO of the most valuable company in the world).
If a Big Oil CEO had embraced convenience retailing and become involved with the details, he would have realized the huge advantages he had over the rest of the field. Not only the real estate, the financial strength and the control of the product that accounts for over 50% of site sales, but the fact that his organization was already delivering product (gasoline) to every site on a high-frequency basis, and thus had the logistical capability to do the same with in-store product. Surely he would then have been able to work out how to exploit these stunning advantages into an unbeatable combination.
Fortunately for many of you, Big Oil missed out, but you don't have to. You have opportunities for end-to-end control in two areas: foodservice and private label. Steve Jobs was notorious for having a "reality distortion field," refusing to accept his team telling him that what he wanted to do was impossible. This frequently resulted in them doing it.
The lesson is to go outside your comfort zone; but pay extraordinary attention to the details. Offer your customers something they didn't know they could get. Deliver it in a better way. Change the way they pay for it. Simplify the way you present it. And make sure you can deliver it seamlessly and consistently across your chain.
So did Steve Jobs reinvent retail? Apple Stores has probably been the most successful launch in retail history, but the degree it changes retailing generally will depend on whether retailers such as you learn from what he did and adapt it to their needs.
Long ago, Apple ran an ad under the headline "Think Different." It ended "people who are crazy enough to think they can change the world are the ones who do." Are you one of those people?
Let me close by saying that the book Steve Jobs by Walter Isaacson, on which much of this column is based, is not only a wonderful read, but is one of the best texts on marketing and retailing I have ever read. I urge you to read it.
Gerald Lewis provides transformational retailing guidance and execution to convenience chain operators. He can be reached at firstname.lastname@example.org or (646) 215-7741.For more information go to www.geraldlewisteam.com.