Apple Retail’s Emphasis on Profits Continues

Earlier this month, MacRumors pointed out that several changes at Apple retail stores were occurring. Among those changes it was reported that employees were being laid off or seeing recent promotions being revoked. Some part time employees were also seeing their hours reduced significantly, in some cases to report. The report was then followed by an acknowledgement from Apple that the company had “messed up” in adjusting its staffing formulas for its retail stores.

Now, ifoAppleStore takes a more in depth look at the situation. The report ties in changes in the philosophy of Apple’s retail experience since the passing of Steve Jobs and the new operational focus of Apple CEO Tim Cook and new retail chief John Browett. Under the operational focus of Jobs and Johnson, the vision of Apple Stores were focused on consumer satisfaction. Now, it seems that Apple has turned into a more numbers-focused perspective for its retail operations.

The report also claims that Cook hired Browett because of his focus on “traditional concepts of retailing” that prioritize revenues and profits as the key performance metrics. It seems that Browett is screwing up the retail experience and unfortunately, it seems Cook maybe behind it too. Apple Retail has been known to prioritize customer experience over profits so all of this is very surprising to me. You would think a company that has $100B+ wouldn’t need resort to such measures. I would understand this decision if Apple was in need of money.

But in 2009, Jobs took six months of medical leave and put Tim Cook in charge of the company, including the retail stores. Cook is primarily an “operations guy,” sources explain, and his natural focus is revenues and profits, not customers. While Jobs was away, Cook and chief financial officer Peter Oppenheimer began to confront Johnson on his customer-centric retail philosophy—both felt the stores didn’t generate enough revenues to justify operating expenses.

In addition, it seems that an Apple Retail employee’s performance is also being based on new metrics too. I hope they don’t take the path many retailers take for measuring their employees.  In fact, I have also heard from sources that these changes are indeed happening.

“Contract sales of iPhones are now used to measure individual performance, and also now appear on store performance charts.”

It still surprises me that the company that has the world’s best retail experience chose the guy from one of the worst in Europe! You won’t see the effect of these changes in Apple Retail in the short term. However, in the long term, it will. By then, it will be too late.


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Parth Dhebar

Parth Dhebar is a 18 year-old entrepreneur. He is the founder of Simple Reviews, a blog focused on reviewing iPhone and iPad applications. Parth is a recognized name in the industry, known for covering Apple news. He is an editor at Techie-Buzz covering news on Apple. You can follow him on Twitter @pdparticle.

  • I like how this post is a summation of all your tweets ;)