The Role of Design in an Economic Downturn | The Customer Experience Labs

There's a very good piece at the Customer Experience Lab about the role of experience in a down economy. Here's an excerpt that talks about the Apple stores:

There are some and my personal favorite is an analysis in BusinessWeek from May 2001 (Sorry Steve, Here’s Why Apple Stores Won’t Work) where the author outlines why Apple’s new retail outlets are not going to be successful.

[The] Problem is, the numbers don’t add up. Given the decision to set up shop in high-rent districts in Manhattan, Boston, Chicago, and Jobs’s hometown of Palo Alto, Calif., the leases for Apple’s stores could cost $1.2 million a year each, says David A. Goldstein, president of researcher Channel Marketing Corp. Since PC retailing gross margins are normally 10% or less, Apple would have to sell $12 million a year per store to pay for the space. Gateway does about $8 million annually at each of its Country Stores. Then there’s the cost of construction, hiring experienced staff. “I give them two years before they’re turning out the lights on a very painful and expensive mistake,” says Goldstein.

     

The pundits have been wrong, here are some of current numbers that show the success of the Apple retail stores (found here and here):

Twenty percent of Apple’s revenue comes from the Apple Store

Apple made $1.25B at the Apple Store in the fourth quarter of this year, which is 42 percent more than last year

Apple makes $4,000 per square foot of Apple Store surface area every year

Reflecting on this example we can see that even though analysts and journalists believed that this is not the right way to go, it was obviously (or maybe luckily) a successful move. In a recession it is easy for everyone to predict the failure of new products, services or distribution channels. The article additionally shows how much you should rely on others to estimate the success of new products or services.

I love this quote from their post:

The world doesn’t need another social network which is merely a clone of Facebook, LinkedIn or Xing. What is needed in challenging economic times are transformational products and services that provide value to customers.

I've added this blog to our blog roll, so take a little time and see their other articles. It'll be worth your time!

The Role of Design in an Economic Downturn | The Customer Experience Labs.

Comments

[Payday Loan]

It is frustrating to have a very weak economy. The effect gives so many problems for everybody. There’s a lot of layoff and so many companies are bothered that this will take for so long. Well, even the big companies like Microsoft has layoffs and this unemployed workers will surely have their payday loan to survive in this critical times. I wasn't quite sure what that meant, so I checked out this article at my payday loan source that explains it. It measures consumer confidence in their finances and the economy. I am surprised that it's going up even though the economy is getting worse. Maybe it has something to do with the new president being inaugurated this week. There has also been a lot of talk about his economic stimulus plan. Maybe that is encouraging for people.