When Is a Waiting Line Advertising?
News Analysis. That's the question I'm asking about people waiting outside Apple retail stores to get an iPhone 3G. |
[Editor's Note: I will be on vacation this week, so posting will be lighter than usual. But I can still be reached by cell phone or e-mail, as needed.]
Last week, I wrote about my Palm Treo-owning buddy expressing an interest in the iPhone 3G. Yesterday morning, he called from outside the Apple Store UTC, in La Jolla, Calif., where he waited about three-and-a-half hours to get a phone. There were 20 people in front of him.
I was surprised that he waited so long, because I was at the mall a day earlier; the line looked small to me—so appeared the line outside Apple Store Fashion Valley yesterday afternoon. About 20 people stood in line just outside the store doors. The seemingly short line was long on wait time— estimated by store employees to be than two-and-half hours. Two weeks earlier, I waited a little more than two-and-a-half hours in a line that was at least 40 people longer and wrapped down one of the mall's side corridors.
Supply isn't an issue. I called a half-dozen Apple Stores this morning. Every one had iPhone 3Gs in stock, granted, some in limited supply. All the stores had lines, too. Now why is that?
Retailers must make various decisions about the cost of operations, such as store hours versus staff. Apple chose to lengthen store hours, opening at 8 a.m. local time for iPhone 3G sales. Another approach: Put more people to the task of processing iPhone 3G sales and activations.
The way I see it, Apple has chosen not to hugely bulk up staff beyond the early sales push, which means these lines may be longer than need be. People are willing to wait, and Apple is willing to let them do so. Besides, there is some marketing benefit, even if it comes at the expense of customers' time and patience.
One possible decision tree:
- Extra store hours cost less than paying more people.
- Customers are willing to wait, and it's cheaper to let them do so.
- The ebb and flow of people leaving the lines helps control limited iPhone 3G supplies; early day waiters get "golden tickets" so they can come back later on.
- Lines of any size are free marketing—accentuating the perception that the iPhone 3G is a hot and highly desired product.
Another decision tree:
- Increased staffing decreases customer anxiety and frustration from waiting hours in line.
- Customers waiting in line negatively affect foot traffic, and so sales of other Apple Store products.
- Long lines deter many would-be iPhone 3G buyers, leading to lost sales.
- Blog and news media buzz and Apple's print and broadcast advertising are enough marketing; the risks associated with long lines aren't worth the marketing benefits.
I suspect that Apple's decision process more resembles my first scenario, which arguably is simplistic. The decision matrix really would be more complex, as the company evaluated broader costs for running the stores against other factors, such as iPhone 3G supplies and margins against other in-store products.
I won't judge from the bean counter's perspective, because I don't have enough information about Apple's retail operations or supply chain. But I seriously wonder if Apple shows enough corporate will to make these lines shorter. Should people really have to wait so long?
I don't think so, from a purely customer perspective. I sure wouldn't want to wait another 2 to 3 hours to buy an iPhone, particularly when standing near the front of the line, with no indication that it's moving or how many people have golden tickets to cut to the front.
But your pain is Apple's gain. Those lines are great marketing. They broadcast the iPhone 3G's popularity; they're free advertising, which you pay for with your time, sweat and anxiety.
My friend said that at the La Jolla store, three people processed iPhone 3G purchases and activations. If he got the number waiting in front of him right, the store processed about six people an hour.
What do you think? Should Apple work harder to keep the lines shorter or to do away with them? That would mean having enough employees to process customers, say, twice as fast. Or is Apple right to take what arguably is a more fiscally sound approach, while getting a little extra marketing boost from waiting lines? Please answer in comments or by e-mail.
[Please send your tips or rumors to watchtips at live.com.]
Comments (1)
First, simply throwing more people at the problem rarely works. Apple had staffed up for the 3G, and I'm not sure how easy or efficient it would have been to add one or two more bodies. Would there be enough room for them to work comfortably, etc.? And would the extra couple people being served make that big of a difference? Increasing store hours, on the other hand, makes a very predictable difference with little impact to otherwise normal operations.
Second, lines can be good advertising, but only up to a point. Truth is, a frustrated and angry customer in line is NOT a good thing. Not for word of mouth, not for Apple, and certainly not for the poor Apple employee trying to help. It was in Apple's best interest to reduce the lines.
Third, lots of customers do not have to wait in lines. Getting the "golden ticket" was a great move on Apple's part. Get your ticket, come back later. I think some people wait anyway because leaving and coming back can be a hassle. Still, with a ticket in your hand at least you know you're getting a phone that day, so less frustration should result.
Fourth, It isn't simply "perception" that the 3G is a hot and desirable product. It is. Period.
Finally, I think that to believe Apple can end the lines completely at this time is unrealistic, because activation is necessary, and the 3G is such a hot product right now. In the face of all that, I think Apple has done some very nice things -- and implemented them quickly -- to not only reduce the lines, but also ease the mindset of those who wait.
Posted by Tom | August 3, 2008 6:06 PM