Apple Store in Grand Central Station: A Brilliant Retail Strategy

When the rumor came out that Apple was opening its latest store in Grand Central Station I couldn’t believe they could pull this off. What an incredible opportunity! Although most people think of an Apple Store as being part of an upscale mall or some other a high-end retail location, Grand Central Station really is the perfect location, and it shows that the Apple real estate group really “gets it” about retail. It’s about nurturing the ecology that brings together consumers, location and buying opportunity.

Now how the heck does Grand Central Station create what Fifth Avenue in New York or Union Square in San Francisco has going for it as a shopping mecca? The key is to understand buying behavior and shopping environments and how you define the and attract customers. It’s the goal of any retailer to be in the right place; where customers show up. High-end retail centers work very hard to identify what attracts customers by studying the demographics and travel patterns. They look at other stores already nearby and the real estate moguls try to sign key anchor stores to promote customer traffic and to bring in other major stores. The objective is to create the kind of synergy that will draw in similar types of customers. For example, the shoppers who go to Pottery Barn often will go into The Gap or Banana Republic as well. The idea is to get those same shoppers to behave in ways that will benefit all the similar retailers.

So how does Grand Central Station fit in? You have one of the busiest transportation terminals in the world with people all coming together, arriving or leaving with some time between trains. And we are not talking about just a few people but millions annually. And not just any old folks. You’re seeing professional people who live in the suburbs and who have more disposable income, and who also happen to have a little time to shop and look around before that next train. And when they do catch that train they may get on board with that new iPod or iPhone or Mac computer. Even if they don’t buy an Apple device then and there, they get to experience the products to see how the world of Apple and iTunes works. This begins the conversion of a potetnial customer to an Apple customer. I’m willing to bet that probably half the people who will go through this Grand Central location will end up buying at another Apple store. But what Apple brilliantly did was to provide that browsing experience – that moment to see and interact with the products. This is what buying a car is all about – seeing it, testing it and eventually buying it.

So, as the Apple store becomes part of the Grand Central Station commuter experience, I will be watching to see how other retailers will consider train stations, airports and other terminals as major opportunities to promote their own sales experience.