Positive Signs for Apple Retail
Apple's self checkout revolution may have seemed a bit crazy, but it's apparently working out.
That's what I hear from a source familiar with Apple's retail operation.
To catch you up: You might recall that last month Apple launched a few new retail store initiatives. Among them: a feature in the Apple Store iOS appthat allows anyone with an iPhone or other camera-equipped iOS device to scan a bar code on any item on the shelf in an Apple store and pay for it using an iTunes account.
My first thought when I heard about this plan? It's going to make it a lot tougher for Apple to tell shoplifters from legitimate shoppers. In the past, someone walking out of the door with an iPhone case, no bag and no visible receipt was likely up to no good. Now Apple's actually encouraging that behavior.
But when I saw the system in action at the Palo Alto store last month, I saw more potential upside. Apple had reconfigured a couple of things in the store to put more eyes on the door. Plus, the system potentially accomplishes two important things. One, it lets experienced Apple shoppers go through the buying process seamlessly, without the final annoying step of having to flag down an employee to make a purchase. Two, it frees store employees to focus on coaching Apple newbies through the shopping process -- a much more profitable use of their time.
The intelligence I'm getting is that the benefits of the new system are outweighing any negatives.
This new setup could be particularly useful in a store like the one Apple's opening in Grand Central station on Friday. (I hear self checkout will be prominently touted there, which is no big surprise.) And the early success of this self checkout initiative bodes well for Apple's holiday sales. How so? Last fiscal year 13% of Apple's sales came through its retail stores -- and it's safe to assume that percentage is highest during the holiday season.
Apple could probably do $5 billion worth of holiday quarter business in its retail stores worldwide. If self checkout is working, that means it's allowing Apple to add sales in those locations without having to increase labor costs. That's got to be good for EPS.