APPLE: FOCUS MARKETING ON POST-RETAIL EXPERIENCE TO RETAIN BRAND RELEVANCE by Graham Brown, MVentur Apple needs to go beyond its traditional comfort zone within the retail space and explore how youth are using technology on a daily basis if it wants to remain relevant. Where Apple’s Frontline was traditionally defined as the retail space, it now needs to move one step further into the 3H of the next generation (the homes, hangouts and hideouts) and develop clearer insights into the nature of the post-retail experience.

1. MVENTUR MEMO Q1 2013: APPLE
APPLE: FOCUS MARKETING ON POST-RETAIL EXPERIENCE TO
RETAIN BRAND RELEVANCE
by Graham Brown, MVentur
Apple needs to go beyond its traditional comfort zone within the retail
space and explore how youth are using technology on a daily basis if it
wants to remain relevant.
Where Apple’s Frontline was traditionally defined as the retail space, it
now needs to move one step further into the 3H of the next generation
(the homes, hangouts and hideouts) and develop clearer insights into
the nature of the post-retail experience.
Frontline is the space for discovery, customer interaction and education,
and these functions are important in brand success and are increasingly
fulfilled outside of the store.
Product discovery is already happening at home with 68% of people
using tablets and 50% using smartphones at home to browse new
products for future purchase (source Adobe). As tablets and

2. smartphones grow in capacity, out-of-store education and discovery is
key to maintaining a positive brand experience.
In a recent media interview, Apple CEO Tim Cook said of competitor
products, “...and then they get it home and use it, and the joy is gone.
The joy is gone every day they use it--until they're not using it anymore!
You don't keep remembering, 'Oh, I got a deal.' Because you hate it!"
Apple’s retail presence has provided a competitive edge both in terms of
marketing and innovation but as it continues to strengthen its retail
offering, competitors seek alternative ways into the youth market where
Apple is weak. Facebook, Amazon and Google all have avoided big
retail plays and invested heavily in on-campus Frontlines.
Just as the old business maxim “nothing fails like success” applied to
Nokia’s reliance on a strategy that proved successful at the turn of the
millennium, Apple’s investment in retail has left it exposed to the
encroachment of competition in these new post-retail Frontlines.
WHY YOUTH?
The strength of Apple’s brand today is based on the seeds it sowed in
the student market yesterday.
Before Apple had a retail frontline, the company had many touch points
with college students. Students made the iPod a success, laying the
ground for Apple’s later play in the mobile market.
Youth have also been key in defining the experience of new products
like the iPad. Though industry analysts predicted users would favor
functionality and business utility, research shows the most popular apps
among table users are actually entertainment and social tools (<1% of
app use is “productivity apps” - source Flurry).
As new competitors start expanding their Frontline presences, Apple will
face an assault on its youth market position. The assault from the
volume players has already begun: in terms of smartphone ownership,
Samsung now rivals Apple with a 24% share of the student market
(source Forrester). This means Samsung and others are in a strong
position to challenge Apple’s traditional dominance of the youth
segment.

3. The next wave of competition will come from the software and services
players who have a stronger presence in the youth market and more
touchpoints to leverage.
RESEARCH
Apple needs to develop better insights into youth behavior to understand
how the customers of tomorrow will interact with the brand experience.
Youth are more likely to use retail as a space for discovery and
education. Where adults tend to shop on a transactional basis, youth are
more social, including friends in the shopping process both offline and
online.
Youth trends identified in our research, e.g. “showrooming” and
“hauling”, are key to influencing peers and the wider market. Youth
extend the product discovery process beyond the storefront: they are
the most active creators (92%) and curators (77%) of online content
(source MobileYouth Report 2013). That means youth retail experience
spills into the 3H (homes, hideouts and hangouts) and Apple needs to
research how and why this process takes place.
MARKETING
Apple needs to go beyond its traditional Frontline if it wants to remain
relevant.
Facebook, Amazon and Google are actively engaged with students on
campus (e.g. Hackathons), developing insights into how youth live their
daily lives beyond the purchase. These Frontlines are not only cheaper
and quicker to implement than traditional retail but appeal to the next
generation of customers who see their involvement in the process as
key to relevance.
If Apple continues to rely solely on retail it will slowly lose relevance with
the youth market, the impact of which will feed-through to the adult and
business market within 5 years. The danger for Apple is in
overextending its retail presence. Rather than continue to ramp up retail,
Apple needs to be investing in secondary Frontlines (e.g. the homes,
hangouts and hideouts) where it faces the greatest threat from
Facebook, Amazon and Google.

4. About MVentur
MVentur is the world’s first youth mobile consultancy.
We have 2 roles:
1) Advisor to our clients
We oversee marketing plans, act on advisory panels and consult our
clients. Find out more about our consultancy work.
2) Commercial think tank for the mobile industry
We promote progressive marketing ideas that help mobile companies go
beyond advertising. Read more about our youth mobile opinion pieces.
www.MVentur.com