the Insiders


March 16, 2012 12:23 PM

Is Apple a Luxury Retailer?

Lofty price points? Check....

Lofty price points? Check.

Maniacal focus on design? Check. 

Prominent logo, Fifth Avenue flagship, super service, legions of brand-ambassador fans? Check.

Exclusivity? Well... Apple embodies almost all of the telltale markings of a luxury retailer. The brand misses on exclusivity, though. The much-anticipated new iPad was launched today and diehards wanting to snatch one up at 12:01 a.m. could. At Wal-Mart. 

Sexy, eh? 

The established core of luxury has long used scarcity to its advantage, pushing the notion that they sell something that is individually special. Hermÿs bags are not just statements of fashion and wealth, but works of art made by craftsmen with years of training. They represent and signal a refined elegance that cannot be bottled any other way. Or that's the pitch. 

Apple products, on the other hand, are designed in California, but mass-produced in a considerably less-than-luxe environment in China. Many Apple products are sold at retailers that don't share the company's attitude toward service. Everything's available online from anywhere. 

Still, the firm successfully sells its products as something special. That's because people can customize and pour so much of their lives into them. 

The company is a luxury retailer that's transcended scarcity and its approach has been too successful to argue against. 

The company's retail sales shot up 44 percent last year to $14.1 billion. Average revenues per store increased 27 percent to $43.3 million from 2010. With its Fifth Avenue store and outposts on the Upper West Side and in SoHo, Apple is believed to be the single largest retail concept by revenues in Manhattan. This in a town with a monster Saks and Macy's as well as two Bloomingdale's. 

Apple has not done all of this on its own. It has not invented a new societal trend -- the company's late co-founder and engine, Steve Jobs, after all, is renowned most of all for pulling existing things together in more appealing ways and then selling them with a great flair. 

Here the brand is tapping into a new notion of luxury, a much broader take on the good life that is available to many more people. It's a notion that started perhaps with Starbucks and $4 cups of coffee and prewashed lettuce in the supermarket and it's led us here, to gadgets that can now talk back to you. 

Apple is successful as a retailer, in part, because has all the elements of luxury but the exclusivity. It's a club that lots more people can join. The service is good, but the sales staff is wearing T shirts. 

Nudging the luxe door open is a very good and lucrative idea. It means giving more people the opportunity to buy something that's special.
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