Apple in Osaka: another huge opening

Apple's Ginza store was one of the most successful new retail openings in Japanese retail history. The second store came pretty close to matching it with 5,000 visitors on the first day.

Apple opened its second store in Japan in Shinsaibashi in Osaka on Saturday. The new store is about half the size of the Ginza store, covering only two floors, but Apple is still marking it as the sixth flagship store in its chain which now numbers 82 shops. The two stores in Japan are still the only ones located outside the US, emphasizing the importance of the Japanese market for Apple.

As with the Ginza store, the Shinsaibashi launch was marked by a huge pre-opening queue and a deluge of first day visitors. By the opening there were 2,500 people waiting patiently outside the store, perspiring in the pre-typhoon humidity. 24 hours before the opening, there were already six people queuing outside the store. By 11pm the night before, there were more than 300.

This was less than the Ginza opening but still a staggering number and more than have stood in line for any of the major fashion brand launches in the same city in recent years, a testament to the success of Apple's retail strategy and brand pulling power.

The people at the back of the line were rewarded for their patience too. The Osaka store had the largest stock of iPod minis of any retailer on the planet, well ready to meet the demand for the latest 'must-have' fashion item. In total, 5,000 visitors came to the store in the first day. In addition, 1,500 t-shirts were given away to the earliest customers, and Apple sold 250 'lucky bags' at ¥30,000 each. The bags were said to contain at least ¥90,000 worth of Apple and third-party products including both software and hardware, with one or two including special bonus items of much greater worth.

At least one queue member was taking full advantage of the wireless network at the store. Using this Apple iChat video conferencing software and iSight camera, passers by were impressed to watch him talk to a friend in Pennsylvania. This was also a good example of how Apple Stores naturally act as much as showrooms as they do retail stores. They provide a boost to the brand presence of Apple across the nation, aiding the sales of Apple product at third-party retailers such as Sofmap, as much as Apple's own stores.

Apple vice-president Ron Johnson was on hand to explain the company's retail policy to the press the day before the big opening. Johnson noted that in the US, Apple was opening stores at a rate of one every 13 days and 50% of all Americans live within 30 minutes of an Apple Store. The chain's main flagships include Los Angeles, San Francisco, New York, Chicago, and the two Japan stores to date. The average store attracts 1,000 visitors a day, but Ginza outperforms the rest, averaging an impressive 4,000 visitors a day, buying around ¥100 million (approx. US$ 1 million) of product a week. Overall, Apple Stores have had 42 million unique visitors so far since first opening in 2001. Johnson claimed that 50% of purchasers were buying a Mac for the first time, and 97% of store visitors recommended the stores to their friends.

In most respects the Osaka store continues the themes established in Ginza, right down to the sleek metal frontage, wooden tables, and black t-shirted sales assistants. The new store boasts a first though in the stunning spiral stair case to its second level, all in glass like some other flagships, and a 30 meter Genius Bar. The in-store theater and demonstration area is more compact in Osaka in keeping with the smaller store, but the activities schedule is as busy as ever with more than 310 events in the first month alone. In addition to concert-like performances from DJs and music producers, the store offers a 'ProCare' service for businesses and people who rely on the Mac for work. Wednesdays are 'Pro Days' with more professional orientated seminars and events.

Most of the 55 employees have some experience with Apple already, with a number, including the store manager, moving down from Ginza. Employees are all Mac experts, although Johnson was equally keen to point out that, "They all speak Windows too." As in Ginza, many employees are fluent in English maintaining the international flavor of the store. While the merchandise available in an Apple store is only a little different from the ranges in other computer stores, it is far more complete and sold with far more panache and inside knowledge.

While Sofmap and Yodobashi Camera are no less friendly, compared to these noisy, visually extreme retailers, Apple Store Shinsaibashi is positively relaxing. Computers are sold fully installed and set up, and customers are encouraged to return to get advice and learn more. Some aspects of the online Apple store are still strangely missing, such as the engraving service for new iPods, but the range of software, and some unique items such as Tumi computer bags, make it an attractive place to shop for Mac and iPod enthusiasts from across Kansai.

Apple expects the Osaka store to further emphasize the new high-brand sense that the computer company is building in Japan. The company confirmed at the opening that it will be adding another store in Nagoya in early January, based in the city center on Otsu-dori. While Apple PR reps refused to be drawn on the subject, plans for stores in all of Japan's largest cities are more than likely with the more fashionable areas of Fukuoka, Sapporo, Yokohama and Kobe likely to be high on list of target locations along with a second location in Tokyo.

The mini format store that Apple is said to be opening in the US this Fall would fit very well within the more than 3,000 shopping buildings in Japan too. As the fastest growing retail development format in Japan, locating Apple mini stores within them would help Apple cover the nation much more rapidly and at a lower overall cost. A portfolio of five to six flagships and a string of smaller format stores would result in a very positive impact on both Apple's bottom line and its market share in this crucial market.

For now though, the two flagships have provided an outstanding example of how to do retail in Japan.

 

Tokyo, September 2004

Copyright (c) JapanConsuming 2004.