The "Loyal Retail Army" at Apple Stores

The Apple Stores' Approach: Can It - or Even Should It - Work for You?

The lengthy front-page article in the Sunday, June 24 New York Times about "Apple's Retail Army: Long on Loyalty But Short on Pay" sought to explain why Apple Store employees - who each generate on average $473,000 in sales while earning about $25,000 per year - show such loyalty to the company.  The average tenure at an Apple Store is 2-1/2 years. The annual retention rate for those working the "Genius Bar" is 90% (versus the average turnover rate of 70% for the retail industry as a whole!)  How do they achieve this kind of loyalty?

Our sense is that Apple has a very good understanding of what motivates the people they most wanted to hire: the computer-savvy, college educated Millennial Generation. Here are some things that jumped out at us. 

1. From the start, Apple chose to not pay commissions, believing that "such incentives would work against the company's primary goals – finding customers the right products, rather than the most expensive ones, and establishing a long-term rapport with the brand. Commissions would foster employee competition, which would undermine camaraderie."  
2. Apple's pay scale is still higher than many retailers, plus they offer benefits particularly appealing to those they seek to employ: health care coverage, 401(k) contributions, employee discounts on Apple products, Apple stock purchases, etc.
3. Apple does not use the word "sales" to describe retail jobs; they're called "specialists". 
4. Apple seeks job candidates who are "affable and self-directed rather than tech-savvy. (The latter can be taught, is the theory, while the former is innate.)"  Such confidence about training is especially easy with employees who have been successful in school.
5. Clear expectations and accountability: Job candidates selected from online applications are invited to a hiring seminar. Those 3 minutes late are turned away! 
6. "If there is a secret to Apple's sauce, it is this: the company ennobles employees. It understands that a lot of people will forego money if they have a sense of higher purpose."

What's the downside, according to former Apple employees? As quoted in the New York Times article, "Disillusionment settles in not because of pay, though pay is a part of it. The problem: there is no career path."  Yet, for many of those college-educated Millennials, it turns out they weren't looking for a career in retail Instead, they wanted a "hip job" before their "full-on dive into the white collar world."

Are there lessons here for other retailers? We think so. The most important take-away: know what matters to your employees! And many studies support that wages are not the #1 priority. For more thoughts on this, see "Beyond the Paycheck: Motivate Employees with Creative Compensation"  on The ROI site. 

Think about your very best employees, and then consider what qualitative factors are a priority for them.  And remember, there is no one-size-fits-all solution. Mimicking the specifics of Apple's policies would be a mistake. But, applying their approach  to create a customized solution in your stores could be very useful.