Skip to content

OM in the News: The Capacity Dilemma at Apple Stores

October 29, 2013
Apple's store on London's Regent Street

Apple’s store on London’s Regent Street

“It’s only a 2-hour wait,” writes The Guardian (Oct.18, 2013).  “An ordinary Thursday afternoon at Apple’s flagship London store and a long line of customers snakes across the first floor.” The technology brand is used to queues for the launch of its latest must-have product, but these people have come carrying faulty iPhones and malfunctioning laptops, desperate for help from one of Apple’s increasingly hard to reach “Genius” experts.

When it opened in Virginia in 2001, the first Apple store was hailed as a retail revolution, allowing shoppers to play with expensive technology without any sales pressure. The emphasis on service, with blue shirted Geniuses on hand to answer queries and fix broken products, has become almost as important to the Apple brand as the aesthetic appeal of its products. But the whole experience is under pressure as a relatively small number of shops struggle to cope with rapidly growing customer numbers. Apple stores–there are only 415 worldwide–have a turnover of $19 billion and the highest sales per square foot of any retail chain.

The Regent Street outlet, for example, employs 120 Geniuses. Each sees up to 30 customers a day but it is impossible to book an appointment less than a week in advance. If the problem is urgent you can turn up and queue, but it could be a very long wait. The problem is not limited to London. In Apple’s Paris flagship store, there were no appointments available for 10 days. There are even reports of scalpers selling Genius Bar reservations in China. Some argue that Apple needs to take itself further upmarket, so it can serve fewer customers more effectively. Or, to cope with growing demand, should Apple open more shops and come up with clever ways of tackling overcrowding?

Classroom discussion questions:

1. What OM options does Apple have to deal with the capacity constraints?

2. To what extent should Apple handle walk-ins?

Advertisements
One Comment leave one →
  1. Phillip Flamm permalink
    October 29, 2013 5:30 pm

    It seems as if it would be possible to catagorize some of the issues customers are having in order to head them off at the pass. In other words “If you have these symptoms, then do this…..” A little self help tutorial to be exact.
    Not sure that would work but it might.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Supply Chain Management Research

Andreas Wieland’s supply chain management blog for academics and managers

better operations

Thoughts on continuous improvement: from TPS to XPS

%d bloggers like this: