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Will Apple stores kill off local Mac retailers?

Submitted by Alex Friday, 13 August 2010 14:58

Reposted from BlogTO.com

Apple Store

Myles Kesten has been in the computer business for over 15 years. Originally running a small software boutique - the CD ROM Store - on the Danforth, but six years ago when the retail market for software began to fizzle, he posed a question to his customers: "What should I be selling instead?" The response from them, he says, was overwhelmingly weighted towards the Macintosh. Apple had pulled their flagship product from near doom some years before with the release of the iMac and the company had been on the upswing ever since.

Today of course, Apple has moved well beyond the desktop to near ubiquity in the handheld market. New products command an unheard of amount of press coverage and demand, and Steve Jobs has the kind of name recognition normally reserved for rock stars or heads of state. Which is good for a man like Kesten; his store, Riverdale Mac, was successful enough that he was able to open a second in the Beach, aptly named Beach Mac.

It was only natural then, that when Apple announced they were entering the retail market a few years ago with their Apple Stores, he got a little nervous.

"I knew it would have two impacts. One is that anybody close to those stores would be annihilated by the competition," he said. "But the other part was that it would increase the profile of Apple in the city."

And it has.

These days it's tough to go out in public and NOT see someone reading the paper on an iPad, scanning twitter on their iPhone or just rocking out to their iPod. There is no doubt the company's reach is expanding, but is it enough to sustain both the corporate stores and the independent retail market?

James Christopher, COO of Computer Systems Centre (CSC) at College and Spadina thinks so. He claims that the corporate stores attract the newbies, people just joining the Apple family, while stores like CSC are able to maintain a level of service and selection Apple is unable, or unwilling, to provide.

"It's been a great market building initiative," he says. "We've always focused our product line so that they find their way to us after they've switched to Apple."

Ultimately, the independents are able to succeed for that reason, by offering their customers what apple can't - trade ins, service and variety.

RiverdaleMac

There is only so much shelf space at the Apple store, so the selection of accessories is limited and according to this reporter - pricey. Both Kesten and Christopher offer a wide selection of accessories unproven from a retail standpoint, which often can also mean they're cheaper.

"Apple products draw people into my store," Kesten says. "But I sell about 2,000 products a month, only 80-100 of them are computers."

CSC also employs a full service department that caters to the long life of older models and provides customers with trade in opportunities.

Another boon to customers in regards to the independents is that the sheer success of the Apple Store means it's always busy. When the iPad was released, Christopher explains he saw people tweeting that the line-up at the Apple Store was 300 deep; CSC had hundreds of units in stock and no line-up, people were able to just walk in and walk out.

Something worth noting this Holiday Season as the frantic search for gifts continues to draw longer and longer line-ups.

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