Apple stores redefining mall economics

031115blog apple store

If you’ve visited an Apple store at your local mall the chances are good that you’ve visited a crowded Apple store at your local mall.

And, not surprisingly, those crowds don’t necessarily get right back into their cars after buying their iWhatevers. They do more shopping. In fact, an Apple store alone can boost overall mall sales by 10%, says one research firm, and Apple is using that clout to its advantage.

From a Wall Street Journal report:

In the past, malls typically operated according to a straightforward bargain. Department stores that anchored the ends of the malls either owned their own stores or paid almost nothing aside from fees to maintain common spaces in exchange for drawing much of the traffic, while specialty retailers in the smaller spaces between the anchors typically paid the bulk of a mall’s rent.

Apple has upended that model by using its bargaining power to pay no more than 2% of its sales a square foot in rent. That compares with a typical in-line tenant, which pays as much as 15%, according to industry executives.

My local mall has an Apple store and a Microsoft store. One day I walked past both and one was crowded and the other virtually empty. No need to tell you which was which.

(Update: Google wants a piece of this action, too. It's first store opened today in London.)

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010815blog internet pipes Erik Solheim


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