In 2001, Apple did something crazy: They started opening retail stores. At the time, the critics called them out of touch and gave them a tongue-lashing for entering a dying sector. Everyone knew that the world was going digital, and pretty soon, the retail store was going to be a dinosaur that our kids would only experience via virtual reality.
Thinking Inside the Box
Once again, the media was wrong. Apple has created one of the most profitable retail spaces ever. They currently operate 501 stores around the world and are seen as one of the most valuable anchors a retail space can have. On average, all Apple stores combined get over 1 million visitors per day and average $5,546 in sales per square foot. To put that into perspective, Tiffany’s and Co. has only $2,951 in sales per square foot, and Lululemon has $1,560 in sales per square foot.
Entrench Customers, Bar Competition
While Samsung — Apple’s main competitor — has 23.3 percent of the overall smartphone market share compared to Apple’s 14.7 percent share of the market, Apple remains the world’s most profitable company. This is largely due to their retail presence. You see, what everyone missed (including Samsung) is that brick and mortar isn’t dying. It’s the middle class that is dying. Brick and mortar is thriving in the low-income and affluent markets.
These brand-building, profit-generating Apple stores create a massive barrier to entry — a moat and tall walls, in a sense — that allows Apple to thrive and build brand loyalty as well as have a relationship with customers like no other. Opening 500-plus stores isn’t easy; if Samsung wanted to compete, it would take a decade or more to gain traction.
What Does Apple Have to Do With You?
You want to create your own barriers to entry, dig your own moats, and build tall walls. You want to find opportunities to build loyalty and repeat business. One way for a small business to do this is with media. When you own media — not rented or borrowed, but owned — you can use it to begin digging a moat and building tall walls. You can create loyalty and make sure customers come back again and again without ever giving the competition another glance. Like Apple, it takes time to build this, but you need to start soon. Like the old saying goes, “When is the best time to plant a tree? 10 years ago. When is the second-best time to plant a tree? Today.”
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