Why Target Was Down 20% in Apple Sales Share
I love when my Target experience comes into play. Here's a short piece I saw linked to today over on 17orbits.
They have a picture of an iPad case that is totally empty, save for a couple Apple Watch straps. It's a dire situation to be sure, and the ex-Target manager in me is recoiling from seeing such empty shelves. This is a quintessential example of using a sample size of 1 to legitimize the narrative you wish to be true. Apple sales are down overall, and iPad sales were actually down just over 21% for Apple earlier in the year, which just so happens to line up with what Target is reporting their Apple products are down compared to last year.
But don't worry about that, pay attention to this one store with an empty shelf.
I left Target last June for greener pastures, but even before I left the writing was on the wall; Apple hardware sales were dropping hard, and they were dragging the entire electronics department's sales down with them. Part of my responsibilities was managing the electronics area, and as an Apple fan, I never had the Apple displays in anything but tip-top form. Cases were full, brand1 was great, and my team knew what they were talking about. Despite this, our sales were dropping hard.
iPads went from something we would sell multiples of per day to something that we didn't sell a single one of sometimes. They were the must-have item for Black Friday in 2013, but our 2014 Black Friday suffered quite a bit due to the reduced demand (despite the same deep discounts as the previous year).
Our stores competed against each other, so we knew how all the other stores in our district and group (~60 stores) were doing, and I was not the only one. No, my store was one of the leaders in electronics sales, and our Apple products were selling in line or slightly better than average, but we were all down.
But again, don't pay attention to this, think about that empty shelf.
We had independent resellers come into the store and want to buy every iPad we had in the building. They had credit cards with what seemed to be no limits, and would have bought out the store if we let them (we had limits in place to prevent them from doing this though). They stopped coming around as often, and by the time I left, they were a really rare sight. Demand on eBay, or wherever they were selling these, was drying up.
That empty shelf, though.
People shop at Target for housewares and clothing but not high-end electronics. Never have – never will. It’s time for Target to pull the plug. Or at least consider stocking the shelves.
That quote is really what got me. What if I told you that housewares and clothing are not the biggest revenue drivers at Target? Groceries make more money than either of those categories. The writer is correct that clothing is a big revenue generator (as well as profit maker), but housewares dream of being as big a draw as electronics. Electronics ranged from one of the biggest revenue departments (usually only behind food and clothing), to the largest by a wide margin around the holidays.
Apple and Target have had a long-standing strong relationship too. Target was the 2nd non-Apple store to sell the iPad in 2010 (beat only by Best Buy), and Target was also the second big-box retailer who sold the Apple Watch (again trailing Best Buy). I wrote this back in October when Target announced they would be stocking the Apple Watch:
In my time at Target (5 years) it was very clear that they and Apple had a pretty good relationship. Apple products and accessories got more square footage in the store as well as more marketing and promotions than any other tech brand they sold. Doing some quick mental math, Apple products in my latest store got 76 feet for shelf space (or 19 four-foot sections, for my Target friends) while all other tablets, cell phones, and other phone accessories got 48 feet to share.
Apple fans love to blame anyone else for bad Apple news, but your bias shines through when you latch onto stuff like this. Apple sales are down and it's impacting other retailers who sell their stuff. Propping up stories of single empty shelves at a Target store and placing the blame for those sales on Target's 1,700+ stores is more than a little silly.
- Or zoning, for my Target friends. ↩