The difference between recession and recovery: Customers

Today, I walked through a mall in Sacramento with Todd Storch, a colleague of mine at CSS. We were in search of something entirely different, but happened across a couple of stark observations of what a recession is or isn’t.

First, we noticed a dearth of shoppers. Fifty-foot-wide corridors, vacant but for a few isolated browsers… their solitude made more conspicuous by the sound of their shoe soles, echoing as they clicked on the hard tile floors. (I recalled how, in the 80’s and 90’s, the mall was “the place to be.” It’s where people went to shop, socialize, and spend a good share of their leisure time. Now, Facebook satisfies the social appetite, and window shopping is often done from that “window” on your desk. The mall will probably need to reinvent its’ offerings and provide a service that is less easily replicated in the virtual world.)

We walked by a very hip looking Verizon store (labeled a “premium outlet”), which was utterly empty, except for the two employees who were having a chat. I mean, empty… as in, entirely void of shoppers.

Then, we walked into the Apple Store, which had the atmosphere of being part nightclub, part arcade, part serious computer store, part attachment and gadget outlet, and part cell phone store. There were dozens of items on display—and powered-up—within easy reach of customers who couldn’t wait to get their hands on them. The place was packed. It was buzzing… with passionate fans who were selling themselves. (Authors note: It seems to me that the Apple organization must teach employees to never interrupt when peers are pitching each other Apple products. They’re very good at getting out of the way until it’s time for a transaction or for actual product knowledge that the layperson might not have.)

Implications: From my view, The Apple Store did not benefit from today’s mall traffic. On the contrary, the mall may have benefited from all of the traffic that Apple had driven to their store. Apple did not benefit from people who just happened to be walking by… the store was a destination. (Granted, I make that observation based on data that is less than scientific.)

Do you have “destination value?” Is yours the product, service or store that happens to snag a few people as they walk by? Or is yours the option that consumers seek out… even though it might not be the cheapest or most convenient?

It would seem that the recovery, for Apple, has started earlier than most (see their most recent earnings press release here). Whether for a laptop that boots-up quickly and holds the promise of a virus-free future, or for the iPhone and “apps” that add value to portable communication… Apple has offered a proposition (or many) which consumers find excitement and value in. And in so doing, they have proven that recessions and recoveries are hardly equal-opportunity events.

Mike Anderson