“Sixty stores in 60 days!” Mr. Park, the tall, handsome, Samsung representative in a Saville Row suit at the Las Vegas CEO show told me. “All over Europe. Apple worried. Apple worried, man.”
“So,” I said as I made little notes, “60 stores in Europe by the end of February.”
“No. No. Start March. Finish by the end of April. Apple scared!”
Right now, they’re a tad skittish about datelines, but, in partnership with Carphone Warehouse, 60 stores, which they are thus far referring to as “outlets,” decorated in an extremely minimalist blue-and-white theme, will retail Samsung’s complete range of computers from desktops, laptops, tablets, smartphones to smart watches.
I asked Samsung’s people exactly what the ‘outlet’ assignation meant, because, at least in an American sense, that term refers to specially assigned malls and stores meant to get rid of store models, remakes, redundant models and overstock, not goods meant to be retailed new in their flagship stores. This issue may be no issue at all, just something lost in translation. Otherwise Apple will yawn and carry on business as usual.
At any rate, between 10 and 15 of the shops are expected to open in the UK, with the remainder in Ireland, the Netherlands, Sweden, Germany, Portugal and Spain (where Samsung already have three pilot stores in Barcelona, Madrid and Torremolinos. The Samsung store/outlets, scheduled to open on April 1, 2014, will not even attempt to go nano-á-nano against the sheer bourgeois opulence of Apple’s flagship stores, which made sales of US$19bn (GB£11.5bn) in 2012 and, according to The Independent, generate more cash per square foot than any other retail chain in the world. This innovative American firm owns 98 percent of its very own, wholly chic Apple stores in eight European countries, 37 of which are in the UK.
This bit of business gives the South Korean corporate behemoth an instantaneous foothold in the European market only weeks after they reported an 18% drop in quarterly profits as it has been forced to drop prices to compete in Asia with cheaper Chinese manufacturers. As Carphone Warehouse will take a 60% share of these shops across Europe, there’s no doubt that, for profitability, many more stores will have to be opened for Samsung to retrieve their 40%, according to The Independent. The day after the announcement on Friday, February 25, Carphone Warehouse shares rose 6% on the London Stock Exchange.
With more than 114 million people visiting Apple’s stores over their busiest December quarter, their ability to attract approximately 21,000 visitors per week is mind-boggling. Analysts expect the Samsung stores will also attract a healthy number of customers, and create profits of £10m a year within two years once Carphone Warehouse accounts for the startup cost of the refits are absorbed.
I am very dubious. Service is second to none at Apple stores. They pay their employees well and these knowledgeable young people – each referred to as a Genius in company jargon – are well trained and keen to interact with a public already familiar with the Apple product line. Carphone Warehouse/Samsung employees own no such track record. The far lower trade-in value of used Samsung products versus Apple is always going to be a retail climate-changer, too. ‘New’ stores will be converted from Carphone Warehouse’s existing 2,000-strong estate.
Mr. Park did tell me that Samsung will offer special services ‘similar’ to Apple’s Genius advisers, hiring folks who help customers get new gadgets set and working before leaving the store and provide after sales help. Samsung’s technical helpers will be supplied by Carphone Warehouse, however. They will now rename their current Geek Squad service (as with their ex-partner Best Buy corporation in the US). Anyone familiar with Geek Squad employees, whether in the US or the UK, knows they are nowhere near as quality-obsessive as Apple‘s are. Just how well service actually sells is a curiosity to me.