It's 11:30 p.m. on a Thursday, and Silicon Valley has gone quiet for the night. The streets are largely empty, the corporate campuses dark. But in a sea of vacant office parks, the lights are on in a squat and entirely unnoteworthy building in Sunnyvale, California — and the parking lot is packed full.
Inside, scores of Apple engineers are huddled around, chattering about server loads. A collection of monitors is mounted on the wall, flashing charts, numbers, and graphs. Preorders for Apple's newly announced iPhone 8 are about to begin, and this is the company's "war room" — mission control for a massive one-night retail operation that sees a deluge of sales. Everyone is dressed comfortably for an all-nighter, yellow security bands on their wrists — everyone, that is, except Angela Ahrendts, Apple’s senior vice president of retail. She’s running the show.
At midnight, the war room's server activity chart ticks abruptly from green to red under a flood of incoming iPhone orders. On the wall, blinking red lights begin flashing across a digital world map with a concentrated flurry of activity in China and South Asia. Then a cheer erupts. Someone from the merchandising team made the winning bet on transactions per second. Apple won’t disclose how many orders came through that night (the company hasn’t published actual preorder numbers for the past two years). But it’s a lot.
Ahrendts remains in the trenches until 3 a.m., floating between the groups, making sure everyone is fired up, like a politician on election night. She smiles and shakes hands the whole time.
Three years ago, Apple spent more than $73 million, mostly in stock, to convince Ahrendts to leave London, where she was CEO of the luxury fashion company Burberry, and move to Silicon Valley to head Apple’s online and physical retail presence.
Retail is central to Apple’s strategy: Apple Stores have greater sales per square foot than any other retailer in the world, including jewelry stores and car dealerships. In 2017, each square foot of Apple Store real estate translated to $5,546 in annual sales. At the store, Apple products don’t have to share shelf space with competitors; the company can fully control the customer experience; and patrons can be enticed beyond the iPhone into buying iPads, laptops, and other, more expensive items gleaming on the store floor.
But retail is in trouble. Chains are cutting jobs and closing stores en masse as more and more shoppers turn to online outlets like Amazon. In 2015, only 11% of US customers bought an iPhone — the company’s best-selling product and the source of over half of its revenue — from Apple. Rather, most buy them from their telecom carriers, many of which offer low-cost leasing deals bundled with cellular plans. And the majority of people who do buy directly from Apple do it online. In fact, the only other e-commerce website that generates more in sales revenue than Apple.com is Amazon. CEO Tim Cook has long wanted Apple Stores to be a place for more than browsing new Apple gadgets and fixing broken ones. Ahrendts is charged with fulfilling that vision.
One of her first projects was increasing the web store’s synergy with its physical counterpart by introducing measures like being able to order a product online and pick it up in-store the same day, and, if a product isn’t available in-store, being able to order it online.
And now, after streamlining and simplifying the company’s e-store, Ahrendts is turning to its brick-and-mortar storefronts, overseeing an ambitious redesign, and taking the reins of an organization that went through a tumultuous 10 months under former executive John Browett, who was eventually fired, leaving Apple retail without a leader for 18 months.
Following her first keynote appearance, all eyes are on Ahrendts, Apple’s big investment, as she reimagines the most public-facing part of Apple: its stores. It won’t necessarily be simple.