Will Apple's Shift in Retail Strategy From Store Lines to Online Be Good or Bad?

04/15/2015 05:26 pm ET | Updated Jun 15, 2015

When he was running Apple, Steve Jobs liked to see long lines of people waiting in front of Apple stores to buy the latest Apple products. Why? The three top reasons are lines...

  1. Visually indicate the product is in high demand,
  2. Promote the product at a significantly lower cost,
  3. Generate publicity that attracts the news media, more customers, and social media.

The synergistic affect of all this attention creates a viral "word-of-mouth" pyramid that is invaluable to Apple -- all for an investment that is small compared to the cost of advertising in paid media.

For the introduction of the Apple Watch and the new MacBook (and perhaps for future releases), Angela Ahrendts, former CEO of Burberry and current Apple Stores chief, is changing the "lines strategy" and encouraging buyers to order online.

What are the benefits of this new approach?

According to Ms. Ahrendts, she does not want customers to have to wait in long lines, become frustrated, and possibly end-up empty-handed if the product sells out at their local store. The other benefit, of course, is if the Apple Watch is not the big winner many are expecting, the absence of lines lowers the risk associated with the negative fallout from the media and potential buyers.

What is lost from abandoning the lines strategy?

This change in strategy, however, is not all positive. The loss of lines has some potentially negative side effects. Some of the more important ones are summarized below.

  1. Publicity. The public attention and excitement generated by the lines will be lost.
  2. Fun event. Many Apple fans like standing in lines to socialize and share stories. Even Apple co-founder, Steve Wozniak, is often at or near the front of the line at his local Apple Store.
  3. Bragging rights. Some fans like to brag that they were amongst the first in line to buy the new product being introduced.
  4. Business opportunities. Some are paid by others to stand in line to hold their place and attract media attention to promote their products.
  5. Promotional value. Without the compelling visuals provided by the lines at Apple stores, Apple is likely to lose the media coverage and social media leverage provided by the lines.

Disappoint Apple haters and competitors

Perhaps the ones that will be most frustrated by Apple abandoning its lines strategy are the Apple haters and competitors. For several years, they have used the willingness of Apple fans to wait in long lines as a reason to disparage them. The disparagement has not bothered Apple. Its sales, market share, and profits have continued to climb.

Is the new strategy likely to work?

Apple has shown that lines are a great way to do marketing. When combined with the brand advantage of uniqueness built into Apple products, these lines have kept the Apple profit machine going for quite some time. Some believe the abandoning of lines is a gutsy move that exudes confidence in the Apple Watch. Others believe it shows insecurity for fear that long lines may not form. Time will tell if the Apple Watch is a big hit or falls below expectations. Stay tuned. No matter what happens, it should be very interesting. One thing is for sure. Lots of people will be watching.