Today in Apple history: Apple begins retail venture inside CompUSA

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CompUSA_Santa_Clara_2
Apple wanted more control over how it sold its computers.
Photo: Coolcaesar/Wikipedia CC

Nov4November 4, 1997: Apple announces a new deal to give it a mini “store within a store” in CompUSA outlets around the United States.

In a step toward the official Apple stores that would launch four years later, Cupertino staffs these mini-stores with Apple-trained employees. The move gives Apple a bit more control over the way its products get displayed and demoed to consumers.

Hard times for Apple

The deal with CompUSA, which would closed its doors in 2013, came shortly after Steve Jobs’ return to Apple to act as interim CEO, a position he wound up remaining in until summer 2011. Jobs’ return to Apple was well-received by the Apple faithful, but a great amount of skepticism remained in the marketplace.

Apple’s iconic iMac G3, the machine that started to turn around the company’s fortunes, wouldn’t be released until the following August. All the company really had to show for itself at this point was its new “Think Different” advertising campaign (which was conspicuously short on actual products).

Mac sales were sinking, with Apple’s market share diminishing in the past 18 months. Apple had just finished a horrible quarter, with a massive loss of $161 million.

The news about the CompUSA deal therefore shocked a number of analysts. “I can’t imagine any reason for CompUSA to do this unless they were increasing their square-foot profit,” Lewis Alton, an analyst with L.H. Alton & Co. in San Francisco, was quoted as saying.

CompUSA said it saw some evidence that business was about to turn around for Apple. “We want to be an active Apple advocate,” said Hal Compton, CompUSA’s president. “We think that because of their loyal customer following, where Apple business has been soft and declining, we are starting to see that turn around and pick up. They have great products and we can help Apple gain market share.”

He wasn’t wrong in the long term and, in the short-term, there was indeed evidence that Apple was starting its turnaround.

Even ignoring secret projects Compton wouldn’t have known about (the iMac G3’s success was also bolstered by the arrival of the not-dissimilar iBook laptop), Apple still had good user loyalty. In particular, it had been buoyed by the recent launch of Mac OS 8, which sold an enormous 1.2 million copies in its first two weeks — making it the most successful sales performance for an Apple software product at the time.

Although Apple had been diminished by the arrival of clone Macs — an initiative Jobs quickly killed — quality was never the problem. What was the problem was a lack of shelf space, badly displayed merchandise, and shop assistants who didn’t know what they were talking about.

The CompUSA deal was designed to start changing that. The Apple “stores within stores” popped up at 40 locations in time for Christmas 1997, with the rest of CompUSA’s superstores receiving the same treatment shortly thereafter.

Apple’s obsession with stores

It would be a mistake to think that Jobs loved the CompUSA Apple stores. His retail preferences were for high-end retail outlets that focused on “big ticket” items rather than bulk selling of products.

It’s not a surprise, then, to hear that Jobs had borrowed the “store within a store” concept from the fashion industry, where designers would take space within a larger retail outlet and have a much greater degree of control over how their stock got presented. The approach was relatively new in consumer electronics at the time.

To create a visual distinction from the rest of the CompUSA store, Jobs hired the same architectural firm that he employed to design his Stevenote town hall events. This provided an architectural unity that made the place you bought your Apple products look like an Apple product itself.

Sadly, like a lot of what Apple did in the 1990s, the CompUSA Apple stores turned out to be a disappointment. The idea of giving 15 percent of each CompUSA store over to Apple sounded like the dream solution Apple had been waiting for. In reality, there was disappointing foot traffic — partially due to the fact that the mini-stores were often positioned near to the back of the CompUSA outlets. What Apple needed was more control.

What’s clear, however, is that — looking back at it today — the CompUSA mini-stores were, essentially, early prototypes of what would later morph into Apple stores.

Even today, Apple occasionally uses the “stores within a store” concept to promote items like the Apple Watch, which don’t easily fit into an existing category.

Do you remember the CompUSA Apple mini-stores? Leave your comments below.

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  • Love reading stories about Apple. They are most inspiring. If only all those disbelievers and doubters had known what Apple would’ve become. I have enormous respect for Jobs and always will. He truly is a legend and should never be forgotten. Such people are born only once in a millennium.

    • OS2toMAC

      What do you mean? Microsoft had Steve Balmer! Isn’t that 2 in the same millenium??? :)

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