The Floor Plan With a Plan Retail design guru Paco Underhill explains the little things that make such a big difference in Apple's newest and best-performing boutique.
By Bob Parks

(Business 2.0) – At 10 A.M. on A Friday in Manhattan's SoHo, even Apple Computer's newest, toniest retail outlet ought to be a dead zone. Yet there's a stream of customers at the service counter checking on repairs. And there's a 20-something urbanite jumping into her boyfriend's arms, having just finished a class in Macintosh operating systems. Even the demo tables are humming with iPod looky-loos. ¶ All of this presents an odd challenge for Paco Underhill, the retail design guru who spends much of his time troubleshooting stores with obvious problems. For the last two decades, the CEO of the retail consultancy Envirosell has applied the principles of academic anthropology to retail environments. From that effort, he has deduced a set of basic rules, like these: People drift to the right when they enter a store, then circulate counterclockwise. The longer they spend in a store, the more they buy. The more open space you provide, the longer they linger.

If success lurks in details like those, it explains why Apple CEO Steve Jobs spends half a day each week with a 20-member design team, hashing out tweak after tweak in each of his 53 retail stores. In one session, the group agonized over three types of lighting to get Jobs's iMacs to shine just as they do in glossy ads.

More to the point, Jobs knows he has to make these new boutiques work. Since May 2001, the company has plowed more than $200 million into the stores--a bold gambit, considering that the Mac user base hasn't grown in 10 years and that for the last five, Apple's market share has flatlined at about 3 percent.

Yet the stores show impressive signs of life. During Apple's most recent quarter, they generated 10 percent of the company's $1.5 billion in revenue. Even with high rents in shopping districts in Boston, Las Vegas, and Los Angeles, the outlets lost just $22 million in 2002 and are on a break-even pace for 2003.

When you walk into the SoHo store's 15,000 square feet of white walls, glass, and blond wood, the place looks more like a design museum than a computer retailer. But as Paco knows, it isn't just for show. --BOB PARKS