Steve Jobs Leaves Behind Retail Legacy

(Story updated with additional commentary from analysts.)

NEW YORK ( TheStreet) -- Steve Jobs did what many retail CEOs only dream of accomplishing -- he turned discretionary items into necessities.

In a challenging economy, when retailers were simply trying to figure out how to unload T-shirts, shoes and food without resorting to drastic discounts, Jobs sold iPhones, iPads and iPods as if they were water in a barren dessert.
Steve Jobs

"There is no question that Steve Jobs made a permanent imprint on the retail industry," said Matthew Shay, president and CEO of the National Retail Federation. "A true pioneer, Jobs made consumers think differently about technology -- with iTunes, he changed the way we listen to music; with the iPhone, he gave us new ways to communicate and find information; and with the iPad, he created a new way to shop. Even in the midst of a recession, Steve Jobs was a master at creating discretionary items that many people considered 'must-have' products. Retailers will benefit from his genius for a very long time."

Apple ( AAPL) is the retailer others can only aspire to, boasting the highest sales per square foot of any other brick-and-mortar company. The technology giant pulls in $5,626 in annual sales per square foot, significantly more than the No. 2 retailer, Tiffany ( TIF), which earns $2,974 per square foot a year.

The company also has operating margins in the high teens, giving it elite status with names like Coach ( COH), Tiffany and Lululemon Athletica ( LULU).

With more customers and retailers turning to the Internet to shop, Apple has proven that traditional stores still have a place.

"He Steve Jobs has brought back the notion that retail stores are an excellent way to sell product," says Telsey Advisory Group analyst Tom Forte.

Forte said more retailers should adopt Apple's payment model, which has ostensibly done away with checkout lines, allowing shoppers to go directly to sales representatives who e-mail receipts directly to the customer.

"Apple has democratized retail. You don't go into the stores and thumb through racks to find what you want. The store associates believe in the product and understand the product. If you go into Gap, the sales person has no emotional attachment," said Wall Street Strategies analyst Brian Sozzi. "Apple has changed the retail landscape. It is time to take out some of the racks and take out some of the unproductive merchandise, and clean things up for the customer."

Apple has not only been credited with transforming how retailers do business, but it has also altered the definition of fashion, becoming the ultimate accessory.

"By creating products that people did not know they needed, including the iPhone and the iPad, he inadvertently changed the way companies sell products and the way that people purchase them," said IBISWorld analyst Kevin Culbert. "Growth in the e-commerce segment has increased as a result of the mobile applications that the iPhone an iPad have helped popularize."

"The iPhone was by no means the first smartphone and the iPad was not the first tablet," Culbert continued. "However, both products were the first in the United States that were successfully marketed for the consumer rather than the business user."

The retail sector is now in mourning, with many companies expressing deep gratitude for Jobs' ingenuity and innovation.

Amazon ( AMZN), which launched a tablet device of its own earlier in the month, has a link on its home page commemorating Jobs that links directly back to Apple's Web site.

The e-commerce giant introduced Kindle Fire last week, significantly undercutting Apple's price for the iPad and is credited with introducing a new demographic to the device. Amazon has insisted that the market is big enough for both of the tablets.

"I am deeply saddened to learn of the passing of Steve Jobs. He has had an indelible influence on the way we use technology in our lives," said Best Buy ( BBY) CEO Brian Dunn. "Steve was a visionary leader who was able to see the world in ways that others were unable to see. Under Steve's leadership, Apple has been a great partner to Best Buy and we will miss him. Beyond that, Steve's mark on the connected world as we know it today -- making technology smart, simple and empowering -- will leave a lasting legacy that will continue to influence technology well into the future. For that, all of us, whether Apple users or not, should be forever grateful."

eBay's ( EBAY) Chief Executive John Donahoe: "Steve understood the power of technology to enrich our lives in simple, elegant ways. His impact on consumers all over the world is apparent wherever one goes. Without a doubt we have lost the greatest innovator of our time. "

"The world is a better place because of Steve Jobs," said Sears ( SHLD) CEO Lou D'Ambrosio. "His vision, guts, and commitment transformed the technology, retail, and media industries. In 1999, I had a discussion with Steve during which he described the way music and the world would be brought to people's fingertips. Back then, it sounded like a dream; now I realize how prophetic he was."

J.C. Penney's ( JCP) hiring of Ron Johnson, the former head of Apple's retail stores, as CEO is the greatest testament to Apple's impact on the sector. Johnson, who reported directly to Jobs, will assume the role on Nov. 1.

But Jobs' demise doesn't mean the end of Apple's retail empire.

Forte of Telsey Advisory Group predicts that Apple, which currently has a little more than 350 stores, can grow to 1,800 locations around the world.

"Jobs understood that people are inherently consumers. He also understood what people wanted, which can be seen in Apple's rapid growth over the past ten years," said Culbert of IBISWorld. "Retailers and product designers alike have followed his vision ever since. Consequently, everything from the stores that a consumer visits to the products that they buy are in some way influenced by Jobs."

-- Reported by Jeanine Poggi in New York.

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