Design

AT&T's Retail Revamp Goes for a Genius Bar Look


An AT&T store in Chicago

Photograph by Tim Boyle/Bloomberg

An AT&T store in Chicago

An AT&T store occupying an old Borders bookstore location in suburban Chicago introduced sleek aesthetic upgrades last week, including tasteful wood paneling, café-style sitting areas, and edgier lighting fixtures. But for all the new additions, the makeover to the telecom giant’s La Grange (Ill.) outlet was more conspicuous—and more than a little familiar—for the retail-world staples that disappeared. Gone are cash registers, posters flashing save-money deals, and anything resembling a sales counter. Employees are free roam the floor with tablets to freely check out paying customers.

The new look appears to be a blatant knock-off of the successful “retailtainment” calculus popularized by Apple Stores, with modern design, hip and mobile staff, and sales transactions sans cash-register. AT&T’s (T) overhaul, which the company intends to expand to more of its 2,300 stores by 2014, is being described as an effort to emphasize the customer experience over sales. “Transactions belong on the Web, and interactions belong in the store,” AT&T retail head Paul Roth explained to AllThingsD. And if it happens also to be an homage to Apple’s (AAPL) retail strategy, who can blame AT&T? The carrier relies heavily on Apple products—and no one is better at selling those than Apple. In the final quarter of last year, for example, AT&T reported that the 8.6 million iPhones it sold along with service contracts accounted for 84 percent of all smartphone sales.

Before Apple’s former retail chief, Ron Johnson, took over J.C. Penney (JCP) in late 2011—with disastrous consequences—the Apple Store was his great triumph. There was something about the futuristic, clutter-free atmosphere that seemed to lend itself perfectly to selling customers on brand new technologies such as smartphones and tablets. “These Apple stores are like magnets for people,” Johnson said at a tech conference for Fortune in 2012. “If you really look at what happens at an Apple store, it’s connections happening. It’s a genius with a person trying to solve a problem. It’s someone getting personal training.”

The Apple Store, which made its debut at Tyson’s Corner outside Washington, D.C., in 2001, has since spread to more than 400 locations worldwide, generating billions of dollars in sales. But there’s increasing evidence that Apple’s successful approach is growing a bit stale. Its retail sales have started to slide—the company reported third-quarter sales of $4 billion, its lowest number since 2011—which some attribute to the lack of any significant changes in the wake of Johnson’s absence. “You had different products and services emerging almost every quarter under Ron,” said Dane Taylor, a former Apple store employee, to the Wall Street Journal. “Since he left, the stores have been basically the same from a customer-service point of view.” Apple is still on the hunt for a replacement for John Browett, who briefly oversaw its retail operation for six months last year.

Still, what’s grown stale for Apple could bring a boost to AT&T. The carrier is poised to benefit because its retail experience in recent years could really go in only one direction: up. The company has been the titleholder of Consumer Reports’ worst cell phone carrier for three years running. But in a recent J.D. Power survey, AT&T received a rare high score for customer service, which the company attributed to faster checkouts, thanks to tablets and its new design.

Nontech retailers, however, should pause and rethink if they’re considering following the Apple formula. As Johnson learned the hard way, imposing an Apple-style shopping scheme on customers in a department store environment might not pan out. Much of his redesign for JC Penney was based on “mini-shops,” little boutique stores within the store intended to be places to pass the time as well as shop. His new-loop J.C. Penney stores also sought to replace cash registers with salespeople toting iPads. Many of JC Penney’s older, faithful shoppers bristled at the new setup, and we all know what happened next. As Bloomberg Businessweek noted after his ouster in April: “Building an experience around a high-margin tech brand with a cult following isn’t the same as selling mom jeans.”

Mayo is an associate editor for Bloomberg Businessweek.

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  • T
    (AT&T Inc)
    • $36.04 USD
    • -0.06
    • -0.17%
  • AAPL
    (Apple Inc)
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