After It Murders Best Buy, Here's How Apple Should Spend Its Cash
02/19/13 - 08:02 AM EST
NEW YORK (TheStreet
) -- This past Saturday, I decided to hit one of the New York City Apple (AAPL)
Stores I had never been in. SoHo. Prince and Greene. One of the best neighborhoods in urban America.
I needed something anyway. An external microphone to use for TheBeach Meets TheStreet
The way things went down disturbed me. I can't simply cast this off as the status quo . . . as something that existed under Steve Jobs, therefore we shouldn't squawk as it continues on Tim Cook's watch.
I asked an Apple Store employee for help. Pickings were slim in the external mic department. Or, as an employee said to me, "We don't have shit here" (pardon the French, but those were his exact words . . . verbatim). After showing me the lone option, he suggested I just take the five-minute walk to Best Buy (BBY)
where he figured I would find better selection.
Frankly, I don't want to relive that soul-sucking experience so I will just let my Tweets from Saturday tell the story:
That about sums it up. Best Buy had nothing. And, even if it did, good luck finding it with the unmotivated, uninspired retail staffers at what should be one of Best Buy's most important stores in the world.
So, I leave Best Buy empty-handed (though I think if I had robbed the place, they would have just let me walk out the door and head down Broadway unabated). And I make my way back
to the Apple Store.
Here's where things get even more disturbing.
I take the one external mic in stock to an employee, asking if I can see it out of its box. He shows me the item on display. I confirm it requires a Lightning
adaptor. Then, I ask if people like the product. He says reviews are positive. Instead of closing me, the Apple Store staffer responds to my indecisive mumbling about what other options might exist by telling me to search for "external mic for iPhone 5" on Amazon.com (AMZN)
I go back to my hotel, fire up Amazon and buy that very same mic (!) and the adaptor from Amazon
. Granted, I used my iPad to make the purchase. But Apple gets nothing out of that, other than whatever profit it makes on its accessory (It does not make the mic).
Two primary issues come up. And they're both more important than all of the mindless garbage
the media decides to focus on vis-a-vis Apple.
To nutshell it, Apple leaves money on the table and its reputation/experience in the hands of others. It's all quite simple and straightforward.
No. 1: Take accessories in-house. You have billions in cash. Don't give in to the pressure to return more capital to shareholders or do something un-Apple-like such as buy Twitter
. Use the war chest to take greater control of the Apple experience.
For a company that's apparently all about control, it sure cedes quite a bit in some aspects of retail, particularly with relation to accessories.
The Apple employee who helped, and led me elsewhere, was right, they "don't have s**t" there. And that's not OK.
Nurture smart, existing relationships with startups like Nest
and high-end companies such as Michael Kors (KORS)
. These partnerships enhance Apple's brand image. And start making your own stuff to accessorize your products.
It baffles me that Apple obsesses over packaging, yet leaves accessories up to just about anybody.
Do No. 1 fast
so you can do No. 2: Stop sending customers to inferior, soul-sucking environments such as Best Buy or the apparently fierce competition
. That's unacceptable.
Check out the surroundings in SoHo. On either side of the Apple Store, there's a Michael Kors and Ralph Lauren (RL)
, yet Apple's people seemingly have no choice but to send fanboys with money smoking from their pockets slumming to Best Buy?
Only part of this is about image. There's little doubt Tim Cook needs to fire a more aggressive salvo -- talking tough on earnings calls and at a conference obviously doesn't cut it -- to make the point that Apple remains, by and large, a high-end, aspirational brand.
As I suggested earlier this year, Cook should yank Apple products from Best Buy as well as most other third-party retailers
. It makes more sense to sell the 128 GB iPad or something similar at a Kors or Ralph Lauren than it does anything at all at Best Buy or Wal-Mart (WMT)
Couple that move with an initiative to sell only Apple-designed, created and branded accessories alongside product from a handful of cutting edge and/or luxury collaborators.
Pour your cash into building out what is the disgustingly high-margin iAccessory business. We have seen what Apple can do in this area with products such as the fantastic iPad Smart Cover
It's time for Tim Cook to step up Apple's game here. In a big way.
--Written by Rocco Pendola in Santa Monica, Calif.