Oct 10, 2021

Apple Distribution Strategy

apple distribution strategy

Walking through the streets of cities worldwide, you’ll often see Apple Stores which are both crowded and in highly selected locations. No matter where the Apple brand is located, whether it is the Piazza Liberty in Milan, Cotai Central in Macau or Grand Central Terminal in New York, it leaves a lasting memory in users’ minds. There might also be a cognitive gulf as a result of these impressions. other words, people might assume that Apple Stores are also a major source of revenue for Apple. While Apple Stores are a significant source of revenue for Apple, they are not a primary generator. Hence, let’s look at Apple distribution strategy and, despite what you may think, why its stores are not always what you think, and what business function they fulfill

In a nutshell

Direct and indirect distribution channels are usually used by companies when it comes to distribution channels. It may also make more sense to use a combination of direct and indirect trade channels. Apple, for example, relies both on direct and indirect marketing channels to achieve success. The Apple Store is Apple’s primary method of selling products directly to consumers. Having this is crucial to Apple’s success as it allows it to provide its customers with a high-quality buying experience, one that emphasizes service and education. Additionally, Apple expands stores internationally for the same reason Amazon does. This is a crucial part of Amazon’s distribution strategy, but it is also quite costly. Nevertheless, Apple has complete control over the customer experience, and managing a distribution strategy requires a lot of By using this approach, Apple is empowered to employ knowledgeable and experienced personnel capable of offering customers a wide array of third-party hardware, software, and accessories that complement the company’s

There is no doubt that Apple makes up a significant portion of its revenue with both services (13%) and Apple stores drive sales, so they are a crucial part of the business. It makes sense, considering the amount of time and money it takes to manage On its financial statements, Apple reported that it will spend more than nine billion dollars in operating leases over the next ten years. It would still be a risky move if Apple relied solely on its retail operations. Apple’s long-term business success would be negatively affected if all sales came from those retail stores, which are subject to financial risks. In addition, if Apple were to rely entirely on those stores, when sales slowed, it would be difficult for the company to thrive. In addition, Apple stores have a high impact on public perception of the company’s brand, aiming to build awareness of both its products and its brand. What’s the deal? Let me ask you a simple question. If I were to ask you, “where do you think Apple sells most of its products?” I believe you would answer, through If I were to ask you, “where did you purchase your iPhone?” (which is the main driver of Apple sales), chances are you would answer “not at the Apple Store!” Thus, to summarize, I define Apple distribution strategy as creating a “positive cognitive gap in perception” A consumer might associate Apple with the stores in which the company conducts most of its business. In Apple’s overall distribution strategy, those stores are just a small part of the It is not a coincidence that most of Apple’s retail stores are located in malls and urban areas with a high level of traffic. Independent of sales, the goal is to increase visibility as much as possible. Despite the fact that sales are significant, I am not saying that they I think the main point is that Apple can use its stores to influence its branding strategy, therefore the way consumers perceive the company as a whole. Even so, that’s not where the majority of the sales take place! A retail store like the Apple Store is simply an outlet for consumers to buy Apple products. Creating an Apple Store is as much of a branding and marketing exercise as it is an effort to create control, experience, and imagination for its customers.

In addition to direct sales, Apple has multiple indirect channels including third-party cellular network carriers, wholesalers, retailers, and resellers. In addition to the Apple Store, you can find an Apple product at Best Buy, Walmart, Target, Radio Shack, and Sam’s Club. If you bought an Apple product there, you probably bought it there as well. What’s the reason? Among Apple’s direct distribution channels, its net sales accounted for 29% of its revenues in 2018 while its indirect distribution channels accounted for 71% of its sales.

Stores as Marketing and cognitive gaps

One of the main takeaways is that businesses often use direct distribution strategies that are quite expensive and do not always directly boost Branding has a tremendous advantage for a store where Apple can sell its products directly to consumers. Although Apple’s indirect distribution channels account for most of its sales, Apple can open up those stores in high-traffic locations in urban areas, and those locations often are architectural masterpieces that appeal to people around the world, regardless of where most of their sales occur.

 

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