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Apple’s retail problem in India

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Apple’s retail strategy has been hailed as one of the hallmarks of the brand’s success. It’s ‘self-owned and operated’ stores in the US and few other countries have played a crucial role in building the magic around the Apple brand. They are built to a certain specific layout & design and are staffed by knowledgeable, helpful staff. The folks at Genius Bar have come to be known as Mac experts who can solve any technical issues. Even the other staff are knowledgeable about Apple products and can guide, advice a potential buyer. To me (at least from the brief interactions I have had in such stores) the staff come across as fans of Apple products too…they seem to believe in the brand. They come across as evangelists themselves.

Contrast this with the franchisee-owned Apple stores in India. Aside from the difference in size (and therefore visual impact) there is a crucial difference: the staff. I understand that the size of the store is something beyond the control of the franchisees – they simply cannot afford to have stores as big as the Apple Stores abroad. The business for Apple retail may not warranty such a huge size. In fact, many of Reliance’s franchisee iStores had to be shut down and converted to multi-brand Digital Xpress outlets, as Apple-only format was unviable. But the biggest challenge Apple is likely to face in India is: knowledgeable, trained and more importantly ‘motivated’ staff, who can be evangelists for the brand.

specialist

In PC’s, India has been a Windows country. So when a Mac had to be bought, one used to place the order to a specialist distributor who got the machine for you. And those guys were knowledgeable about the brand as it was their business to be so. And they catered to a small niche audience – designers, musicians and such like. Then came the iPod, iPhone and MacBook which found favour among a wider audience including students. The franchisee operated, specialist, Apple-only store was born. My experience with such stores has largely been positive, especially when it comes to the staff. They seemed to love Apple products too and we’re knowledgeable, helpful. But of late, I have seen staff who seemed disinterested, clueless and like any other store sales staff. Their personal phones (obviously) is likely to be an Android phone and I have seen them use it inside a store. Deep down it is just a job for them. Moving forward, with Apple planning to expand its retail footprint in India, this aspect – finding trained, motivated, knowledgeable evangelists – is going to be an issue for Apple.

But why is brand love important, you ask? The difference between being sales staff at any other generalist retail store and a specialist store like Apple is that in the latter, being part of a community is a critical aspect of the brand. The sales staff at a specialist premium audio brand (say Bose), IKEA or Harley Davidson store are knowledgeable and more often, believers. It is like meeting with kindred souls when you meet fellow Apple fans and users. It goes a long way in fostering a feeling of being special. Apple Stores (the original stores abroad and some franchisee stores here in India) did that. With Apple ‘corners’ in large format electronic stores and now with small neighbourhood stores in Tier II markets the challenge is to find staff who can be evangelists for the Apple brand. Chances are the staff will genuinely believe that the products they are meant to sell (in fact, convince) are of poor value and cheaper alternatives exist. India, like any other country (except US perhaps) is Android country when it comes to phones and tablets. The staff in the upcoming Apple franchisee stores come from a strata of society who perhaps cannot afford an Apple product and have probably grown up hating the Apple brand or worse still, being indifferent to it. They can be trained in the technical aspects & features of an iPhone or MacBook. But will they find the brand love within themselves? I doubt it. And that can show.

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34 Comments

    • bhatnaturally Post Author Reply

      True. It is like going to a speciality cuisine restaurant (say, Andhra food) – a knowledgeable staff enhances the experience as opposed to a clueless or staff with blasé attitude.

  11. Syed Reply

    I guess the best way to deal is to offer the staff an iPhone with some conditions and they should play along well.

  13. Sumant Srivathsan Reply

    My take on this is slightly different, and goes beyond the retail staff’s passion for the brand. Other brands, such as Samsung and Nokia, have single-brand stores (franchisee driven, not owned-and-operated), and the service quality there is not very poor at all. The staff’s ability to recommend devices (from a much larger portfolio) based on user requirements and budget is quite good. They don’t always get it 100% right, of course, but, by and large, they’re on the money with their advice.

    The trouble with Apple’s model is, to a large extent, what you mention at the end of your post: the staff doesn’t have the ability to recommend products or help troubleshoot them because they are not users themselves. AFAIK (outdated info, admittedly), Apple store employees in the US are given iPhones for their use to facilitate that ability to help. And in many cases, pre-existing iPhone users are preferred as Apple Store staff, which highlights the point about socioeconomic strata issues in India versus the US, which is a far more homogeneous market for Apple and its competitors. These are conditions no Indian franchisee or distributor can hope to fulfill, without Apple subsiding these efforts, and which is something Apple doesn’t care to do. I lay the blame squarely on Apple’s doorstep for not cultivating its in-house evangelists in this market, and is indicative of their perception of it from a worldwide strategy perspective.

    Apple isn’t making as much money in India as the size of the market should indicate, and that is informing a lot of their investment in it. I don’t fault them for it, but I do wonder why they thought they could simply come in and clean up without doing the legwork, or considering that price-sensitivity is still a huge factor.

    • bhatnaturally Post Author Reply

      Thanks for the comment, Sumanth. I agree – it is more than just passion. It is about product familiarity arising from ownership + usage – which may eventually lead to passion for the brand. And yes, Apple needs to subsidise this in India.

  15. Chaitanya Chunduri Reply

    Thought provoking post LB,
    I see your contention – of the staff being knowledgeable, passionate and believe in the ‘brand story’ themselves. But when it comes to expecting that they should also be the users of the brand, I guess a more scalable strategy could be to follow what luxury brands so.

    For eg in premium watch and (branded) jewellery stores, it is obvious to the shopper that the guy behind the counter doesn’t (and can’t afford to) wear this brand, but they come across as someone who know the brand, products, formats and features very well. In fact in some stores these people even come across as someone who appreciate such tastes and can even guide the shoppers to make an informed choice.

    I think that aspect is very important and would possibly come by investing in robust ongoing training of the retail executives.

  20. choudhary Harish Reply

    Very informative and seriously even i read the news about this topic on internet but none of these thought came in my mind hats-off to you sir 🙂 for such an informative and thoughtful analysis 🙂

  23. shivraj Reply

    Great article.
    This should be an important lesson for Apple as how other companies cannot replicate Apple experience. India was and is still largely ignored by Apple and this should be on top of Apple priorities if it seriously wants to make big inroads into India.

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