Genius Bars and Siena Sandstone
New York’s Fifth Avenue store
The Customer Experience
Jobs hated to cede control of anything, especially when it might affect the customer experience. But he faced a problem. There was one part of the process he didn’t control: the experience of buying an Apple product in a store.
The days of the Byte Shop were over. Industry sales were shifting from local computer specialty shops to megachains and big box stores, where most clerks had neither the knowledge nor the incentive to explain the distinctive nature of Apple products. “All that the salesman cared about was a $50 spiff,” Jobs said. Other computers were pretty generic, but Apple’s had innovative features and a higher price tag. He didn’t want an iMac to sit on a shelf between a Dell and a Compaq while an uninformed clerk recited the specs of each. “Unless we could find ways to get our message to customers at the store, we were screwed.”
In great secrecy, Jobs began in late 1999 to interview executives who might be able to develop a string of Apple retail stores. One of the candidates had a passion for design and the boyish enthusiasm of a natural-born retailer: Ron Johnson, the vice president for merchandising at Target, who was responsible for launching distinctive-looking products, such as a teakettle designed by Michael Graves. “Steve is very easy to talk to,” said Johnson in recalling their first meeting. “All of a sudden there’s a torn pair of jeans and turtleneck, and he’s off and running about why he needed great stores. If Apple is going to succeed, he told me, we’re going to win on innovation. And you can’t win on innovation unless you have a way to communicate to customers.”
When Johnson came back in January 2000 to be interviewed again, Jobs suggested that they take a walk. They went to the sprawling 140-store Stanford Shopping Mall at 8:30 a.m. The stores weren’t open yet, so they walked up and down the entire mall repeatedly and discussed how it was organized, what role the big department stores played relative to the other stores, and why certain specialty shops were successful.
They were still walking and talking when the stores opened at 10, and they went into Eddie Bauer. It had an entrance off the mall and another off the parking lot. Jobs decided that Apple stores should have only one entrance, which would make it easier to control the experience. And the Eddie Bauer store, they agreed, was too long and narrow. It was important that customers intuitively grasp the layout of a store as soon as they entered.
There were no tech stores in the mall, and Johnson explained why: The conventional wisdom was that a consumer, when making a major and infrequent purchase such as a computer, would be willing to drive to a less convenient location, where the rent would be cheaper. Jobs disagreed. Apple stores should be in malls and on Main Streets—in areas with a lot of foot traffic, no matter how expensive. “We may not be able to get them to drive ten miles to check out our products, but we can get them to walk ten feet,” he said. The Windows users, in particular, had to be ambushed: “If they’re passing by, they will drop in out of curiosity, if we make it inviting enough, and once we get a chance to show them what we have, we will win.”
Johnson said that the size of a store signaled the importance of the brand. “Is Apple as big of a brand as the Gap?” he asked. Jobs said it was much bigger. Johnson replied that its stores should therefore be bigger. “Otherwise you won’t be relevant.” Jobs described Mike Markkula’s maxim that a good company must “impute”—it must convey its values and importance in everything it does, from packaging to marketing. Johnson loved it. It definitely applied to a company’s stores. “The store will become the most powerful physical expression of the brand,” he predicted. He said that when he was young he had gone to the wood-paneled, art-filled mansion-like store that Ralph Lauren had created at Seventy-second and Madison in Manhattan. “Whenever I buy a polo shirt, I think of that mansion, which was a physical expression of Ralph’s ideals,” Johnson said. “Mickey Drexler did that with the Gap. You couldn’t think of a Gap product without thinking of the great Gap store with the clean space and wood floors and white walls and folded merchandise.”
When they finished, they drove to Apple and sat in a conference room playing with the company’s products. There weren’t many, not enough to fill the shelves of a conventional store, but that was an advantage. The type of store they would build, they decided, would benefit from having few products. It would be minimalist and airy and offer a lot of places for people to try out things. “Most people don’t know Apple products,” Johnson said. “They think of Apple as a cult. You want to move from a cult to something cool, and having an awesome store where people can try things will help that.” The stores would impute the ethos of Apple products: playful, easy, creative, and on the bright side of the line between hip and intimidating.
The Prototype
When Jobs finally presented the idea, the board was not thrilled. Gateway Computers was going down in flames after opening suburban stores, and Jobs’s argument that his would do better because they would be in more expensive locations was not, on its face, reassuring. “Think different” and “Here’s to the crazy ones” made for good advertising slogans, but the board was hesitant to make them guidelines for corporate strategy. “I’m scratching my head and thinking this is crazy,” recalled Art Levinson, the CEO of Genentech who joined the Apple board in 2000. “We are a small company, a marginal player. I said that I’m not sure I can support something like this.” Ed Woolard was also dubious. “Gateway has tried this and failed, while Dell is selling direct to consumers without stores and succeeding,” he argued. Jobs was not appreciative of too much pushback from the board. The last time that happened, he had replaced most of the members. This time, for personal reasons as well as being tired of playing tug-of-war with Jobs, Woolard decided to step down. But before he did, the board approved a trial run of four Apple stores.
Jobs did have one supporter on the board. In 1999 he had recruited the Bronx-born retailing prince Millard “Mickey” Drexler, who as CEO of Gap had transformed a sleepy chain into an icon of American casual culture. He was one of the few people in the world who were as successful and savvy as Jobs on matters of design, image, and consumer yearnings. In addition, he had insisted on end-to-end control: Gap stores sold only Gap products, and Gap products were sold almost exclusively in Gap stores. “I left the department store business because I couldn’t stand not controlling my own product, from how it’s manufactured to how it’s sold,” Drexler said. “Steve is just that way, which is why I think he recruited me.”
Drexler gave Jobs a piece of advice: Secretly build a prototype of the store near the Apple campus, furnish it completely, and then hang out there until you feel comfortable with it. So Johnson and Jobs rented a vacant warehouse in Cupertino. Every Tuesday for six months, they convened an all-morning brainstorming session there, refining their retailing philosophy as they walked the space. It was the store equivalent of Ive’s design studio, a haven where Jobs, with his visual approach, could come up with innovations by touching and seeing the options as they evolved. “I loved to wander over there on my own, just checking it out,” Jobs recalled.
Sometimes he made Drexler, Larry Ellison, and other trusted friends come look. “On too many weekends, when he wasn’t making me watch new scenes from Toy Story, he made me go to the warehouse and look at the mockups for the store,” Ellison said. “He was obsessed by every detail of the aesthetic and the service experience. It got to the point where I said, ‘Steve I’m not coming to see you if you’re going to make me go to the store again.’”
Ellison’s company, Oracle, was developing software for the handheld checkout system, which avoided having a cash register counter. On each visit Jobs prodded Ellison to figure out ways to streamline the process by eliminating some unnecessary step, such as handing over the credit card or printing a receipt. “If you look at the stores and the products, you will see Steve’s obsession with beauty as simplicity—this Bauhaus aesthetic and wonderful minimalism, which goes all the way to the checkout process in the stores,” said Ellison. “It means the absolute minimum number of steps. Steve gave us the exact, explicit recipe for how he wanted the checkout to work.”
When Drexler came to see the prototype, he had some criticisms: “I thought the space was too chopped up and not clean enough. There were too many distracting architectural features and colors.” He emphasized that a customer should be able to walk into a retail space and, with one sweep of the eye, understand the flow. Jobs agreed that simplicity and lack of distractions were keys to a great store, as they were to a product. “After that, he nailed it,” said Drexler. “The vision he had was complete control of the entire experience of his product, from how it was designed and made to how it was sold.”
In October 2000, near what he thought was the end of the process, Johnson woke up in the middle of a night before one of the Tuesday meetings with a painful thought: They had gotten something fundamentally wrong. They were organizing the store around each of Apple’s main product lines, with areas for the PowerMac, iMac, iBook, and PowerBook. But Jobs had begun developing a new concept: the computer as a hub for all your digital activity. In other words, your computer might handle video and pictures from your cameras, and perhaps someday your music player and songs, or your books and magazines. Johnson’s predawn brainstorm was that the stores should organize displays not just around the company’s four lines of computers, but also around things people might want to do. “For example, I thought there should be a movie bay wher............