Ahrendts succeeds Jobs, Johnson, and Browett (Graphic by Michael Steeber)

When Ron Johnson finalized his decision to move from leading Apple’s retail strategy to become the Chief Executive Officer of J.C. Penney, the executive jumped in his car to drive to Steve Jobs’ home and notify the Apple co-founder in his living room of the decision. During his short car ride to Jobs’ Palo Alto home in the summer of 2011, Johnson likely thought about how he would explain his choice. But what Johnson likely did not imagine is that it would take nearly three years for Apple to find a true new leader for the stores the duo created.

In one of current Apple CEO Tim Cook’s first major missteps, the long-time operations maestro hired John Browett, formerly of Dixons, to run retail. Browett’s hire was immediately met with skepticism from Apple customers and retail employees, but Cook defended the hire and called the British executive the “best [choice] by far” to run Apple’s retail division. In the six months that he ran retail, Browett cut back on employee hours, initiated layoffs, and fell out culturally with the rest of the Apple executive team.

John Browett visiting Apple Store

Alongside Scott Forstall, Browett was ejected from the Cupertino-based company, leaving Tim Cook and head-hunting firm Egon Zehnder, again, with the tall task of finding a suitable replacement for Ron Johnson. As the man who ran Dixons, the United Kingdom equivalent to Best Buy, Browett was in many ways built in the image of Johnson. Johnson ran Apple Retail for nearly a decade, and before that he was an executive at both Target and Mervyns. But unlike Browett, Johnson fit into Apple’s culture and was close with both Jobs and Cook throughout his tenure.

Since Jobs and Johnson pioneered the innovative chain of retail outlets, the stores have mostly functioned the same. While both Apple’s revenue and profits grew with assistance from these retail stores, many industry watchers, Apple executives, and rank-and-file Apple retail employees started to believe that the company’s retail stores had begun to stagnate in look, feel, and features. If Apple wanted to continue to lead the way in technology product retailing, the company needed to seek a new direction.

And Cook seems to have agreed.

Last year, finally reaching the end of a Steve Jobs-created roadmap for the future, the ousting of multiple top executives, several new hires, and the re-architecting of marketing strategies, Cook had the unique opportunity to select a new person to run Apple retail in their own image with absolutely no strings attached to retail outlet behemoths. After a several month search, he picked Angela Ahrendts, who was serving as CEO of London-based Burberry at the time.

Ahrendts’ résumé is certainly impressive, and so is the growth of Burberry product sales under her leadership. But does she have the ability to take Apple retail into the future? Her colleagues throughout Apple seem to believe so.

Three weeks into her tenure at Apple, Ahrendts is already reshaping the retail executive team, visiting stores, and holding calls with store managers. Most importantly, she has outlined a three-part vision for the future of Apple retail: an emphasis on China, mobile payments, and completely revamping the end-to-end Apple Store sales experience.

Since arriving at Apple at the start of May 2014, Ahrendts has been learning the ropes of what it means to be an Apple executive. Each new Apple employee in a leadership position becomes a part of a learning experience to mold the person into Apple’s culture. Simultaneously, Ahrendts has been moving to reshape Apple’s retail leadership team to fit how she would like to run the critical online and retail store divisions.

Steve Cano and Bob Bridger at Apple Store

Post-John Browett, Apple’s retail team under Tim Cook was primarily run by a trio of executives: Steve Cano (Vice President of Retail Stores), Bob Bridger (Vice President of Apple Retail Real Estate), and Jim Bean (former Vice President of Finance turned Vice President of Apple Retail Operations). Cano, once discussed as a possible successor to both Johnson and Browett, ran all retail stores worldwide; Bridger sought out and built new stores; and Bean ran retail operations and finances.

But Ahrendts, sources say, is moving to re-architect the top retail brass to better fit with her vision for the future of Apple retail.

While Bridger and Bean will remain in their former leadership positions, Cano has moved away from retail and will fill a new international sales role. Additionally, Ahrendts has given broader responsibilities to the head of Apple’s European Retail division, Wendy Beckman, and the head of China Retail, Denny Tuza. Unlike with previous retail leaders, Ahrendts also oversees online retail. Earlier this year, Apple appointed former Delta executive Bob Kupbens to run online stores, and Ahrendts is said to have aspirations for more closely connecting the online and brick-and-mortar Apple retail experiences. Kupbens is known in the e-commerce industry for dramatically improving Delta’s Web customer service so he is likely a perfect compliment to Ahrendts and her knowledge in the physical retail space.

According to Apple employees with whom Ahrendts has shared her vision for the future of Apple retail, further growth in China is one of three critical pieces on which Ahrendts would like to focus. Having the head of China retail work with Ahrendts directly will assist her with this goal. Ahrendts is said to believe that the tastes of Chinese consumers are critical across the globe, not only in China, and Apple needs to focus on making its stores and retail marketing initiatives friendly to that growing sector of the world. Apple currently has ten stores in China and plans to reach a store count of thirty in the region by 2016.

Stanford Apple Store

Ahrendts has also been touring many of Apple’s stores in the areas surrounding Apple’s Cupertino, California campus. Ahrendts is said to have visited the new Stanford store and multiple stores in San Francisco. Employees who have met with Ahrendts describe the new retail chief as “warm and genuine,” “honest,” and “passionate.” As one senior-ranking Apple retail executive put it, “she is so Apple.”

Employees from an Apple Store in the Los Angeles area recount being so excited about Ahrendts beginning work at Apple this month that their store manager emailed Ahrendts a photo of the store’s employees, and Ahrendts promptly replied with excitement about her new role. Employees at various Apple Stores say that they are looking forward to receiving direct communications from Ahrendts regarding her plans for Apple retail, something that Browett did not exactly do.

Like Cook and other Apple executives, Ahrendts is said to be passionate about her Alma Mater, and employees recount a conversation between Ahrendts and an Apple Retail Store manager, who like Ahrendts, attended Ball State University for undergraduate education.

These interactions come in stark contrast to some of John Browett’s early visits to Apple retail stores. Employees working at stores during his reign recall the former executive walking through stores for just a couple of minutes with a cold tone. One employee reflecting on Browett’s tenure said, “employees were put off by his apparent discomfort with being in such a crowded environment as an Apple Store.”

For Browett, Apple retail was more business than culture, and this was demonstrated through his bold business tactics that contrasted with the former Apple way of running the retail group. Browett even later admitted that while he is a competent businessman, he did not fit in with the Apple culture.

Ahrendts, unlike Browett in his early days at Apple, is said to already be actively holding conference calls with Apple Store managers from across the world. As one retail manager described the meetings, “even over the phone, you feel like you are speaking to her as she is sitting right next to you.”

In addition to friendly interactions with employees and customers, Ahrendts’ recent visits to Apple retail stores gave her the opportunity to learn more about how the company’s retail arm functions. Sources say that veteran Apple retail executives walked Ahrendts through critical aspects of the retail stores such as the main sales floor, accessory walls, and the back of store areas where repairs are conducted. Ahrendts is said to especially be interested in improving Apple Store over-the-phone service, Personal Setup, and the iPhone trade-in program.

Apple Store iBeacon technology hands-on

She is also said to be intrigued by the Apple Store’s iBeacon location-tracking features and interactions with mobile devices.

Indeed, the second critical area that Ahrendts wants to focus on in taking Apple retail into the future is mobile payments. As Senior Vice President Eddy Cue and former online store chief Jennifer Bailey assemble a team to build a mobile payments service for the iPhone, Ahrendts and new online stores VP Kupbens are seeking to improve mobile payments in Apple’s retail stores and mobile apps for both the online and in-person purchases. Ahrendts is said to be eyeing a major focus on blurring the lines between Apple’s online and physical stores in order to improve the overall experience for Apple customers.

Ahrendts’ third critical focus for taking retail into the future is a planned revamp of the end-to-end Apple Store sales experience. From the point in which a customer finds the product he or she wants to purchase, to how they discuss the product with Apple Store employees, to how they pay for the product, Ahrendts would like to redesign the complete experience. Of course, Ahrendts’ job is not to bring Burberry to Apple Retail, but to improve Apple’s stores for the next decade—a period in which Apple will dive into wearable devices, new fashion-oriented products, and mobile services.

As Ahrendts told some Apple retail managers, “I got my MBA at Burberry, but I will get my PhD at Apple.”

In conversations with Apple employees, Ahrendts noted that she has always been inspired by Apple, and particularly by the late Steve Jobs. Ahrendts even credited some of Burberry’s success to the fashion retailer’s interactions with Apple. The two companies partnered last year to film Burberry’s London fashion show with the iPhone 5s, and select Burberry stores have been outfitted with iPads as tools for customers to view more information about products.

Ahrendts consistently noted in all of her interactions thus far with retail employees and executives how excited she is for the future of Apple retail and how much she enjoys and fits in with the Apple culture. As Cook told employees upon announcing Ahrendts’ appointment last fall, “she cares deeply about people and embraces our view that our most important resource and our soul is our people.”

“She believes in enriching the lives of others and she is wicked smart,” Cook added.

Angela

While Browett did not even last long enough at Apple to oversee a single holiday quarter, employees believe that Ahrendts will have success at Apple. Ahrendts’ clear vision for the future of retail, cultural fit, and amicability with employees, and most importantly, her support, trust, and encouragement from employees, lead retail executives and store workers alike to believe that she will be able to successfully move Apple Retail past the legacy experience built by Steve Jobs and Ron Johnson (and the shadow of John Browett) and bring it into the future.

Image credits: Ahrendts graphics by Michael Steeber, iBeacons image, Stanford store, Apple Store interior images

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36 Responses to “Angela Ahrendts’ plan for the future of Apple Retail: China emphasis, mobile payments, revamped experience”

  1. You write some excellent articles Mark.

    Like

  2. b9bot says:

    That sounds great for Apple. And if she does care about the people, hopefully she will see that Apple Retail employees do so much more than ordinary retail and will compensate them for it. Also the fact that we live in one of the most expensive areas in the U.S. If the employees can’t afford to live, how do you expect them to stick around and work there. Everything else is mute otherwise. She sounds amazing and Apple retail has a bright future if she can compensate the employees as much as reshape the stores and processes.

    Liked by 1 person

    • irelandjnr says:

      Great article, Mark. That episode of ‘the talk show’ you were on was certainly the best episode I’ve ever listen to. And I’ve listened to them all.

      Ahrendts is truly inspiring; watch her TED talk to see for yourself.

      P.S. Please, please, please switch to Disqus comments. These WordPress comments are killing me!

      Like

  3. Impeccable taste, Midwestern hospitality, laser focus on the customer……what’s not to like?

    Like

  4. thejuanald says:

    Great article, and it looks like she will be a great addition to Apple. Apple retail stores are probably the best retail stores out there in terms of electronics, and Apple treats their retail employees very well.

    Like

  5. Apple could start with the abysmal phone service- starting with the automated phone tree. The most gawd-awful thing about Apple.

    Like

  6. iFernando says:

    I will say, while I don’t work for Apple, I am excited to see how Apple retail operations will change with Angela running the ship now. If her work as CEO of Burberry is any indication of what she is capable of, imagine what the store will be like with Apple’s resources in her arsenal.

    Like

    • Really? Don’t get your hopes up. The retail experience is already “excellent”, so what can that woman possibly offer? Such a huge salary for doing nothing so far except photo shoots. Seems Apple has too much money when they throw it away on people like this.

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      • What about the experience is excellent? The overwhelming crowds? The understaffing? The often chaotic queues for service (both at the genius bar and for mobile)? The inability to grab a small case off the wall and simply find a place to pay for it?

        There is so much Apple Retail does right, but boy does it have room for improvement. I think because Apple is such an excellent company (from a product standpoint) and because the stores are so beautiful and well-designed, its customers put up with Retail’s shortcomings. I believe this new VP has what it takes to finally fill the gaps.

        Like

      • think when they have to market, display, and sell wearables in store. they need someone like her to continue it with new products. seems you can’t really think you can just coast at that job. last guy did and got canned pretty quickly.

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  7. Wow, big demotion for Cano! Definitely a changing of the guard across the second-to-top tier at Apple. Not making a statement whether it’s better or worse, but definitely different. They have essentially cleaned house from 2011 to 2014. Check out PaperBox, an awesome, free iOS app to get organized. It is one of the hottest apps this spring! http://www.gopaperbox.com

    Like

  8. iPadCary says:

    The MAPS fiasco, Browett, Beats & now this. DUMP. TIM. NOW.
    And I second the motion to switch to a Disqus-based comments section.

    Like

    • And I’m guessing you want those kids off of your lawn as well. :)

      For the record, the person responsible for Maps was actually fired, Browett was fired as fast as possible also, and the Beats thing hasn’t even happened yet, and you know nothing about what it is, so I can’t see how you already see it as a disaster.

      Like

    • irelandjnr says:

      Appreciate you seconding my motion for 9to5 to switch to Disqus, but disagree about Dumping Tim. Innovate stuff takes time and Jobs made big mistakes to. That’s the nature of business when you stop play it safe and try to constantly reinvent yourself as Apple does, taking big risks like the iPod, iPhone, iPad and soon iWatch.

      Like

    • Tallest Skil says:

      Shut up and go away, you useless, pathetic imbecile.

      Like

    • I agree with you. Watching Tim do a presentation, is a real testing of skills of trying to stay awake. At least Phil & co. are more entertaining.

      Like

      • And we all know that a CEO’s ability to entertain you is key to their success. Eye roll.

        Like

      • Of course their job is to entertain when doing presentations, otherwise they shouldn’t be up on stage presenting products.
        If you’re a CEO and you host a presentation, shouldn’t it be enlightening, entertaining, informative, presentative?
        Why is that so difficult to comprehend?
        I think Tim should take some presentation courses, because he’s way too “dry”.

        And to answer your “hidden” question, yes, their ability to entertain me is part of their success, because if I don’t believe the CEO and the products, I ain’t gonna buy them, and if I ain’t gonna buy them, then they make no money and therefore become unsuccessful.
        (I hope you get it now)

        Like

    • Better idea: SAY. NOTHING. Your list of “failures” is idiotic and careless. Tim Cook’s successes as a leader far outweigh the relatively minor missteps you listed.

      Like

  9. Seems great to me. Apple’s retail experience is generally over hyped and not as good in reality as it is in theory. Anything that will cut through the chaos of an Apple retail floor so that customers can actually get help would be welcome.

    Personally, I think their biggest mistakes are in believing that “line ups” are no good, and that the Apple store “doesn’t have lineups.” They most certainly do, and for almost everything, almost all the time.

    You know what would be really revolutionary? A dedicated line for paying for stuff. :-)

    Like

    • You know what would be really revolutionary? A dedicated line for paying for stuff.

      Sounds like you want Apple to be Best buy. Do Apple a favor and buy your apple products there.
      A Cashier and a Line is NOT what the apple experience is about.

      Apple employees try really hard to make your shopping experience so much better than best buy or other retail stores. Give them half a chance and you just might learn something.

      If you don’t want to wait for the experience, order products online, have them shipped to your house and stop going to the store and being “that guy” that thinks he shouldn’t have to wait for service.

      Since you disagree with the Way Apple stores handle service, I am sure the employees would prefer not to deal with people like you.

      Like

    • You would really rather be in a line surrounded by a smattering if meaningless crap than playing with, exploring, creating at one of their excellent products, and have someone coming to you? Hmmm, seems rather odd, I have to say.

      Like

  10. drtyrell969 says:

    It’ll be interesting to see if she can get any work done between photo shoots of herself.

    Like

  11. hannahjs says:

    Already a Master of Business Administration at Burberry, she is now writing her Doctoral Dissertation at Apple. Her words! I expect the world is going to be charmed by her research findings. CEO Tim Cook’s finest achievement has got to be his persuading her to leave London for Cupertino—and she will add verve to Apple’s stagy presentations, pegging the needle. If I’m wrong, I’ll eat a dry biscuit.

    Like

  12. Kuma (@Kuma) says:

    If she is the one that gets NFC added to the iPhone, I will be a very happy iPhone user!

    Like

  13. dafthunk says:

    Nice article. Wow there’s a lot of love for Angela and it will be interesting to see her changes taking place along with reactions from within Apple and out. Agreed with hannahjs about her possibly adding verve to Apple’s stage presentations. Not saying anything about Tim Cook as a ceo but I think he’s a horrible stage speaker. Complete opposite from the natural charm of Steve, he tries so hard to be enthusiastic on stage but comes off as so put on and uncomfortable. It’s really awkward to watch. I’ve never seen Angela speak but she could bring back some natural charm to the presentations.

    Like

  14. Really, I don’t see what this bitch can do for Apple! She comes from the fashion business. Just exactly how much IQ does it take to be CEO of Burberry, really!

    Like

  15. I love Apple and raised my kids on them. But here’s a rant. The Palo Alto store is ugly and I can’t stand to be in it longer than I have to. Looks like an elongated gravestone with Costco overtones. It needs color – a huge red painting, large pieces of deep color on heavy wool, anything…but the battleship gray. I don’t care if it is marble from a quarry of magical quantum powers teleporting information that the store is made of. It’s awful.

    The tech support is fine. I’m in love with the geniuses. 95% of the sales process is high quality. But the store hurts my ears as well as my eyes. And I love Apple products since Lisa days (yes, I actually owned one.)

    I think Apple should have a plaque in there that this was where Mrs Fields sold chips first – this is the site of the original Mrs. Fields chocolate chip cookie. Like Steve, she married a Stanford student…an economist. From chips to chips, but in both cases it was the non Stanford spouse who made the difference.

    oh… and one more thing….the pic of the Stanford store you have here was taken by me. If you find it in images, you can see it links to http://www.TheSiliconValleyStory.com and my post on the Stanford store. Delighted you have it. I’m no different, my images are from everywhere including my iPhone.

    Like

  16. Great article, I hope she dose good things for apple, they need more of something to keep being the richest company on the planet.With so few products but also the most expensive products you have to keep changing to keep it looking new and fresh, your going to have to give the public a reason to wait in line and think they are getting the greatest products. As I see its all about more! More money for shareholders, its definitely not for the retail worker making minimum wage who can beryl afford the product they are selling. Don’t get me wrong I like apple and I use apple products, I just don’t like a monopoly.

    Like