November 4, 1997: Apple unveils its plan to open small “store within a store” areas inside CompUSA outlets around the United States. Apple-trained employees will staff these mini-stores and sing the praises of the Mac and other Apple products.
The move gives Cupertino more control over the way its products are displayed and demoed to consumers. While ultimately disappointing, Apple’s CompUSA experiment paves the way for the flagship Apple Stores that will launch four years later and become the world’s most profitable retail outlets.
CompUSA deal comes amid hard times for Apple
Cupertino’s deal with CompUSA, the computer superstore that eventually closed its doors in 2013, came shortly after Steve Jobs‘ return to Apple to act as interim CEO in September 1997. The Apple faithful loved Jobs’ return to the company, but a great amount of skepticism remained.
Apple’s iconic original iMac, the machine that started to turn around the company’s fortunes, wouldn’t be released until the following August. In fact, all Apple 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 continued to sink, with Apple’s market share diminishing in the previous 18 months. Apple had just finished a horrible quarter, with a massive loss of $161 million.
The news about the CompUSA deal therefore shocked some analysts. “I can’t imagine any reason for CompUSA to do this unless they were increasing their square-foot profit,” said Lewis Alton, an analyst with L.H. Alton & Co. in San Francisco.
CompUSA believed in Apple
In reality, CompUSA 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.”
Obviously, Compton’s belief proved correct in the long term. And, in the short term, there was indeed evidence that Apple was starting its turnaround.
Even ignoring secret projects that Compton wouldn’t have known about (the iMac G3’s success was bolstered by the arrival of the similar stled iBook laptop), Apple still commanded user loyalty. In particular, the company had been buoyed by the recent launch of Mac OS 8. The update 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.
Apple’s obsession with retail stores
Although Apple took a hit due to the arrival of clone Macs — a misguided initiative that Jobs quickly killed — the quality of the company’s products was never the problem.
Three distinct things hurt Apple at retail: badly displayed merchandise, a lack of shelf space, and shop assistants who didn’t know what they were talking about.
Apple struck the CompUSA deal to start changing all that. The Apple “stores within stores” popped up at 40 locations in time for Christmas 1997. The rest of CompUSA’s superstores received the same treatment shortly thereafter.
Still, it would be a mistake to think that Jobs loved the CompUSA Apple stores. He preferred high-end retail outlets that focused on big-ticket items rather than bulk selling of products.
It’s also no surprise to hear that Jobs borrowed the store-within-a-store concept from the fashion industry. Clothing designers often occupy space within larger retail outlets, and exert much greater control over their product’s presentation. The approach was relatively new in consumer electronics at the time, though.
Designing CompUSA Apple mini-stores
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 where you bought your Apple products look like an Apple product itself.
Sadly, like much of what Apple did in the 1990s, the CompUSA Apple stores proved disappointing. Taking over 15% of each CompUSA store sounded like the dream solution Apple had been waiting for. In reality, the mini-stores suffered from disappointing foot traffic. The fact that they often languished near the back of the CompUSA outlets did not help. Apple simply needed 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. And by 2012, Apple Stores shot to the top of the list of America’s most profitable retail outlets. The company continues to build its remarkable retail stores around the world.
Do you remember the CompUSA Apple mini-stores? Leave your comments below.
Luke Dormehl is a UK-based journalist and author, with a background working in documentary film for Channel 4 and the BBC. He is the author of The Formula: How Algorithms Solve All Our Problems, And Create More and The Apple Revolution, both published by Penguin/Random House. His tech writing has also appeared in Wired, Fast Company, Techmeme, and other publications. He’d like you a lot if you followed him on Twitter.
