Is Samsung About To Nail Apple in Retail?

Apple’s retail strategy has been one of its great successes. In fact Apple has done to retail what it did to mobile – shown other companies the way. In total, they now have around 400 stores, the majority of them in the USA, and they are wildly successful. But is it enough?

Phones, the actual smart devices, are now of less importance as a differentiator than in the recent past. Everyone makes a great phone, and that’s why BlackBerry saw its share price sink, Friday. Nice phone but what else do you excel at?

Apple and Samsung excel at phones, have equally phenomenal supply chains, great marketing and equally good innovation capabilities. What matters also is how you sell. Hence retail could be the next significant battleground between these two.

In 2012 Apple opened 41 new stores. It is using its store openings to help develop new markets and gradually the number of international retail stores has grown – 82% of 2012 openings were international last year. But let’s be clear, that’s only about 32 stores.

A recent study showed that “The percentage of sales from Apple Stores (compared to all sales) has actually dropped from 17 percent in 2007 to 12 percent in 2012.” The conclusion you can draw from that is stores don’t matter because Apple has such a great distribution network, or Apple ‘s retail strategy is lagging its overall development.

Analysts Asymco point out that as sales have increased in the past five years, store openings have slowed proportionally. Yet when Apple doubled its stores in China it also doubled sales.

Still Apple’s own retail presence in China is negligible (3% of stores) and in India non-existent, as yet, though Apple has added two distributors there and offers an iPhone for $98 down payment.

Let’s look at arch competitor, Samsung, and evidence that you cannot afford to slouch for one minute. All this activity comes from a six month period in 2012.

Samsung announced the opening of its first “Samsung Mobile Brand Store” in Delhi, in April 2012, April

They launched their first concept store in Pakistan also in April. The Samsung Concept Shop is a One-Stop venue for all Samsung products – Samsung 3D Smart TV’s, LED and LCD TV’s, Monitors, Plasma Display Panels, IT products, Cameras, Mobile phones, and Home Appliances.

In March 2012 they partnered with mobile operator MTS in Russia to sell handsets and tablet computers on contract in MTS’s 2,000 shops. They also announced they will open 10 of their own stores in Russia’s biggest cities,

In July they opened their first North American retail store, and a very Apple-like experience, in Vancouver, Canada. The store was “flooded with clean, bright lighting, a minimalist layout of products and even blue-clad Samsung “geniuses” on deck to help out customers”.

Also in 2012 they began an own store strategy in China aiming to develop in the second and third tier cities with a strategy of hiring local Chinese managers.

In addition, they opened the first China Samsung Experience “shop-in-shop” with retailer Suning in, Pudong, Shanghai, August 2012.

In regards to the future cooperation of the two parties, Suning plans to set up no less than 100 Samsung Experience Shops in its flagship stores across China. At present, the Chinese retailer is planning Samsung Experience Shops in nearly 30 outlets in Shanghai, Beijing, Nanjing, Guangzhou, Shenzhen, and Chongqing.

They also opened a concept store in Sydney, Australia, in August 2012 just down the road from Apple.

They announced a partnership with Singapore’s Challenger, the leading IT retailer, to open “experience corners” in Challenger outlets. The first one opened in October 2012 and has 1500 square feet dedicated to Samsung phones, computing, and cameras.

They partnered with Tesco[/entity] in Malaysia in March 2012 with a shop-in-shop concept called “Samsung World”. And with Phones4Us in the UK – began a “store-in-store” program in March 2012

Apple is not standing entirely on its laurels.

(Distribution) Outlets in China selling the iPhone rose to 17,000 in the period that ended Dec. 29, from 7,000 a year earlier, Apple Chief Executive Officer Tim Cook said on a conference call yesterday. That helped Apple boost sales in the Greater China region to $6.83 billion, from $4.08 billion a year earlier.

When Samsung opened its first store in North America the tech press accused it of copying the Apple way. And there is some truth in that. But the Korean company has a diversified strategy.

It has an own-store program in key markets like India and China, and of course North America. And it has at least two different store-in-store concepts that it is pushing with major retail outlets in key growth markets.

What it gets up to in North America is not its central retail strategy. Yes, it will do concept stores but its bigger push is into volume – hundreds of in-store corners and concept areas to push the Samsung brand and product quickly
Samsung’s objective is to increase sales competitively, as soon as possible. Will we see Apple,, with its higher concept retail approach, accelerate its store openings in response?


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