iPad Drove 'Quantum Leap' in Apple Retail Store Traffic as Annual Visits Approach 400 Million

Following yesterday's release of Apple's 10-K annual report, which we shared some numbers from, Asymco analyst Horace Dediu has now taken a closer look at some of the other retail store performance numbers. Dediu notes that Apple reported a total of 395 million visits to the company's retail locations in fiscal 2013, an increase of 23 million visitors from 2012. The analyst also shows that, with the exception of some seasonal spikes, visitors per store per quarter has remained fairly steady at 240,000 since mid-2010, compared to just 160,000 visitors per store per quarter from 2007 to 2010.

dediu_store_traffic
In examining potential factors driving this "quantum leap" in visitors to Apple's retail stores occurring in mid-2010, Dediu determined that the launch of the iPad could be the main reason:

That leaves product. Here we have a clear suspect. The iPad launched exactly at the point in time when the visitor count leaped. In my opinion this is the best explanation.

Let’s remember also the comment from Ron Johnson at the time of the iPad launch. He said that it was as if the stores were designed for a product like the iPad. In other words, the iPad is something that needs to be discovered with a retail experience. You can sense this when you visit the stores and the placement of the iPads within.

As Business Insider points out, Dediu also notes that the average spending per visitor in an Apple retail store has remained steady for the past several years at around $50, up from the $40 spent on average before the product launched:

Next, Dediu explains that the traffic to each store depends in part on the size of the store and the "flow" of people through the store. The store renovations that Apple recently announced, Dediu says, will be geared toward improving these. Dediu also pointed out that the average spending per visitor in the stores is very steady — "around $50 since the iPad launched, $40 prior."

Apple reported during its fourth quarter earnings call this week that its retail stores made $4.5 billion in revenue in Q4 2013, with 30 new stores coming in fiscal 2014. Two-thirds of those new stores will be located outside of the United States, and Apple plans to remodel an additional 20 stores over the course of the year.

Top Rated Comments

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91 months ago
Quantum leap? Didn't go very far then eh?
Score: 6 Votes (Like | Disagree)
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91 months ago
An Indianapolis perspective...

There is only one Apple store in town and it's relatively small. Before the iPhone was introduced it was reasonable to actually walk around the store and in my opinion have a pleasurable shopping experience. Fast forward to 2013 and I'll do just about anything to stay away from the store and the wall-to-wall people in it.

Don't get me wrong, I understand that part of retail profitability to sales-to-square-foot, but I wonder how much more a store could sell if people like me didn't dread going in one because of the mob?

I've said for years, my local store should expand, strip off the genius bar, one-to-one appointments and the daily "classes" they have and move them to a place you don't have to raise your voice over the din and a place more conducive to learning. Heck, in that "other" area, add space for business and education customers. My perspective is that even if the people in this new space aren't surround by all the products of the Apple store, the increased attention and "specialness" they feel from the new space will drive increased long term loyalty and sales.
Score: 4 Votes (Like | Disagree)
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91 months ago
Dammit Ziggy! Tell me something I don't know!
Score: 4 Votes (Like | Disagree)
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91 months ago

Interesting that people still visit Apple's Stores, given the recent failures in presenting new and innovative products.

I blame Tim for that!

I hope that Apple steps it up from here.

:apple::apple:


It would indeed seem that Apple still has products that consumers want enough to visit the store & experience. Apple's "failures" as you put it regarding "innovation" are really only unrealistic expectations on fanboy's end. I don't know of any company run by human beings that is able to push out cutting edge products year after year, nor would it be productive or efficient to do so. I don't sense mainline consumers are restless just yet. Cook has made quite a few management errors, but separate issue.

We saw this week that Apple R&D expenses took quite a boost recently at a hit to margins so it would seem Apple is not resting on its laurels & understands it's situation.
Score: 3 Votes (Like | Disagree)
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91 months ago

iPad Drove 'Quantum Leap' in Apple Retail Store Traffic...


But things that happen on a quantum scale are very very tiny!!!
Score: 3 Votes (Like | Disagree)
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91 months ago
Add to that another 400 million that know how crowded Apple stores are and never go in.
Score: 1 Votes (Like | Disagree)

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