With the launch of their long-awaited Watch, Apple has implemented a game-changing strategy to position themselves as leaders in the wearable tech market, choosing to aggressively target the luxury consumer rather than relying on their core customers. However, luxury consumers, specifically fashion-savvy consumers, can be a hard sell. With obstacles to surmount, Apple’s new retail strategy is only the first step in what has to be a long-term strategy.
Apple’s new retail strategy
Apple has always been an innovator, carving out their own niche by bringing beautifully designed-designed and user-friendly technology to the masses while redefining the customer experience along the way. For the launch of their first new product in 5 years, and a whole new category to boot, Apple has forgone their tried and true approach of tapping tech early adopters and Apple fans. Apple’s new retail strategy has squarely targeted the luxury market. While the new watch line starts at an accessible $449 price point for the Apple Watch Sport, the luxury Apple Watch Edition caps out at a whopping $15,500.
Behind Apple’s new retail strategy, is a dream team of executives brought in from leading luxury brands. Led by Angela Ahrendts, the former CEO of Burberry, who was credited with propelling staid British brand, Burberry, into the fashion limelight, Apple is positioning themselves along side international luxury brands. For the launch, Apple took a 12-page ad in Vogue’s March issue. And for an added profile boost, highly visible style icons, Karl Lagerfeld and Beyonce, received custom versions of the luxury Watch Edition pre-launch.
To bring an even greater air of exclusivity to the launch, Apple has borrowed from coveted luxury brands, by making the Watch available only from select internationally renowned arbiters of taste, such as Colette in Paris and Selfridges in London. And to further fuel the sense of limited availability, the product can be viewed at select Apple stores by appointment as well, but is only available for purchase through Apple on-line.
With the scarcity effect created by limited availability, and putting the product in the pages of Vogue, Apple’s new retail strategy is to both fuel sales at the top end of the luxury market and initiate a trickle-down effect to create desire amongst fashionistas and consumers of affordable luxury.
Challenges of the Luxury Market
While Apple isn’t the first tech company to introduce wearable technology, they are the first to embrace the convergence of technology and fashion, and take aim at the inextricably intertwined worlds of luxury and fashion. Apple’s new retail strategy demonstrates their acceptance that tech wearables are ultimately fashion!
Yet, even with taking strategic measures; a beautiful product line, aggressive marketing, and adjustments to the in-store customer experience; Apple still has hurdles to overcome.
Tech Gadget vs. Luxury Icon
As beautifully designed as the Watch is, it is still a tech gadget; a mere appendage to the IPhone with limited functionality as a stand-alone device yet at a similar price point to an IPhone (in the case of the affordable Watch and Watch Sport versions). And as a tech gadget, there will be the inevitable obsolescence, when the next generation is launched in a mere couple of years.
While planned obsolescence will not faze Apple fanatics and tech early adopters, who rush to purchase the latest Apple product or upgrade; or the ultra-luxury market, the Beyonces and Kanyes of the world, who can flagrantly drop $15,000 for a fleeting status symbol, fashionistas will be a harder sell. Hardly a luxury icon on par with a Cartier watch, Hermes bag or Burberry trench coat, to be coveted for years, if not a lifetime, the watch will have difficulties winning over masses of fashionistas.
The new luxury consumer
While the ultra-rich celebrity culture of professional athletes and entertainers might think nothing of dropping five digits on a tech toy, the accessibly priced Watch and Watch Sport need to appeal to the new aspirational luxury consumer. Already effectively positioned as a Masstige brand, Apple has been adept at providing premium priced technology and an impeccable customer experience to the masses. And the new luxury consumer, of upwardly mobile middle-class, were happy to pay the price for tech tools such as IPhones, IPads & MacBooks to project tech savviness and enhance their images.
However, when it comes to fashion, new luxury consumers want to fully enjoy their hard-earned splurge. That means getting the first class aspirational retail experience. While, as part of Apple’s new retail strategy, new display cases have been integrated into select stores and service has been amped up, with staff trained to assist customers with demonstrations and make styling suggestions, it’s hardly a luxury experience on par with a designer boutique. The customer experience is neither vastly different from their existing service, exceptional as it is, nor lux-worthy. For a savvy luxury consumer or fashionista, trying on watches in the middle of the manic environment of an Apple store, and being advised on styling by a t-shirt wearing techie, while shopping side-by-side with a tech geek, is disconcerting to say the least – never mind, not being able to complete the transaction and proudly carry their purchase home.
Ubiquity – The enemy of fashionistas
In the world of fashion and luxury, ubiquity is the kiss of death. Once the masses have adopted a designer, fashion or product and it becomes ubiquitous, it quickly loses favour with fashionistas and luxury consumers. Designer labels such as Michael Kors and Coach, once the favourites of fashion savvy consumers, have lost favour and sales due to their ubiquity. That kind of consumer aversion to ubiquity has spurred many retailers to offer product customization, allowing customers to personalize their purchase with custom colour combinations or monograms (think Nike id or Roots’s leather monogramming service).
To date, Apple has fared exceptionally well with their ubiquitous IPhone, which has become popular across all consumer segments, including luxury and fashion. It has managed to remain the go-to-phone, due to its cool factor and easy user interface, but more importantly, because of the variety of options, and multitude of designer cases and accessories available, providing endless opportunities for customization and personal expression.
However, tech wearables are fashion and as such, are a consumer’s opportunity for personal expression. While Apple’s watch delivers on design and is available in a select variety of finishes and bracelet options, the opportunity for personalization remains limited.
Wearable technology is the future. Currently in its infancy, it will only continue to evolve and morph as the worlds of technology and fashion converge. And it is those brands that can deliver real innovation, great design, technical functionality and accessible pricing that will win the hearts of fashionistas and luxury consumers.
With Apple’s new retail strategy, they are taking ownership of the category – albeit with hurdles yet to overcome. Regardless of whether they make any substantial inroads with fashionistas and the new luxury consumer with this initial launch, sales are sure to be strong among the Apple fans, early adopters and the ultra-rich. However, this is merely the beginning, the first generation and the first step in what has to be a longer term, ever-morphing strategy to own the category.
