When Apple introduced yesterday that Deirdre O’Brien will change into its Senior Vice President of Retail and Individuals, it centered on the constructive aspect of a reasonably stunning revelation — the corporate’s much-admired retail chief Angela Ahrendts is leaving after solely 5 years.
Having coated Apple for a very long time, I discovered the information of Ahrendts’ departure unsettling. Even placing apart her visibility as one of many tech business’s main feminine executives, her long-term strategic methods of retail, and her apparently robust rapport with retail workers throughout the globe, there are three greater causes her departure may harm Apple in the long run.
First, Ahrendts joined Apple from British style home Burberry, which she led out of a gross sales stoop as CEO — a place she may at some point have taken at Apple. Ever since her hiring, and extra in order she gained Apple expertise, she was believed to be considered one of only a few individuals who may at some point run the design- and marketing-focused expertise firm.
On a associated second observe, Ahrendts was an entire distinction together with her predecessor John Browett, an electronics retail CEO whom Apple fired after solely months on the job. In contrast to Browett, who reportedly pushed Apple retail workers to aggressively upsell merchandise like conventional electronics shops, Ahrendts took the alternative method, making the shops really feel much more like upscale, pressure-free boutiques. Apple’s retail places turned measurably nicer underneath her watch.
Third, and maybe most significantly, Ahrendts helped information Apple via its rocky however finally profitable transition into promoting wearables, in addition to the sleek evolution of its bodily and on-line shops throughout a time of historic retail upheaval. As brick and mortar chains collapsed, Apple thrived, and its on-line retail shops have been extra easily built-in into its worldwide web sites.
It’s unfair to both credit score Ahrendts with all of Apple’s retail successes or downplay Deirdre O’Brien’s potential to do even higher in that position. However my intestine feeling is that this growth alerts some main behind-the-scenes change in Apple’s retail route.
Yesterday’s announcement has the texture of a short lived transfer — a option to keep away from what occurred with Browett, whose dismissal was adopted by an prolonged retail management vacuum till Ahrendts was employed. O’Brien already has a big HR-related portfolio at Apple, and there’s no approach the corporate may moderately count on her to supervise “Retail and Individuals” for a number of years.
In that gentle, I’m wondering how Ahrendts’ departure will positively or negatively affect Apple’s retail shops, a query I believe gained’t be answered conclusively for a yr or extra. Listed below are a number of prospects:
Extra aggressive iPhone gross sales. Apple was reportedly involved years in the past that its shops do not make as many iPhone gross sales as they need to be, and up to date proof — together with a Vogue Enterprise interview final week with Ahrendts — suggests the shops nonetheless lag in iPhone gross sales, whereas main the world at promoting Macs. As we’ve just lately seen on its web site, Apple may very well be getting ready to alter ways to make its retail shops the highest vacation spot for buying and selling in and shopping for telephones.
A heavier give attention to tech, together with video and AR. Apple could also be getting ready to maneuver past promoting wearables on style, and into extra experiential promoting experiences, primarily based on its identified work on a streaming video service and augmented actuality hardware. Boutique-style shows centered on watches and bands might give option to higher spotlights on video screens and AR glasses.
Slashing shops and workers. Apple may be planning to extra aggressively minimize both ill-performing shops or extreme retail worker counts. The corporate has already closed a number of older shops, and like its suppliers, may even see much less of a necessity for large head counts as a result of fewer anticipated clients.
On the final level, Ahrendts spoke simply final week concerning the “tragedy in retail … that it has change into about numbers,” the place slicing prices relatively than investing in folks has change into a key to profitability. In gentle of slowing gross sales, Apple CEO Tim Cook dinner may be shifting aggressively to alter up or minimize prices in retail shops, and Ahrendts might have felt that the time was proper to go away on a excessive observe. I believe the choice wasn’t hers alone.
Regardless, the whole lot will work out effective for her — she made roughly $24 million annually she labored at Apple, and that was truly a pay minimize from the reported $27 million she made in a single yr at Burberry. For Apple’s retail initiatives in a post-Ahrendts period, nonetheless, the outlook isn’t fairly as clear, as the corporate’s newest iPhone gross sales promotions have felt clumsy and uninspiring. Right here’s hoping Cook dinner and O’Brien have some sensible plans to maintain shifting each Apple’s shops and gross sales ahead.