Apple on the Champs-Elysées

Apple’s new European flagship store on 114 Champs-Elysées in Paris respects and advances the brand’s signature style and reinforces its role as a provider of status symbols. The interaction between style and status is a key dynamic to manage in order to stay relevant in the market for luxury personal goods.

The afternoon of October 19th 1901, an experimental airship lifted off from Parc Saint-Cloud at 14:42 and charged at the Eiffel Tower in nine minutes flat. On the way back, with tailwinds propelling the balloon forward, the engine failed and the pilot dramatically scaled the gondola railing without a safety harness to restart it. The airship landed safely in the park 29 minutes and 30 seconds after taking off, satisfying Henry Deustch de la Meurthe, an oil baron who adjudicated a 125,000 franc prize to the dashing airman, Alberto Santos-Dumont.

Santos-Dumont was one of aviation history’s earliest pioneers, who spent considerable time and resources developing modern aircraft capable of long-distance travel and planting the seed for the French aerospace industry.

During his time in Paris, he lived in an apartment on 114 Champs-Elysées, a Beaux-Arts style building on the corner with Rue Washington. The building would house, in 1932, the flagship storefront for J.M. Weston shoes, the quintessential men’s dress shoes from Limoges.

The same space opened on November 18th 2018 for Apple’s flagship store in Europe. Occupying some 5,000 m² of retail space across two floors, the building houses Apple’s offices in France, an Apple Store, a public forum space for events and workshops and two showcase rooms. One simulates an apartment to test the features of Apple’s smart speaker, the Homepod. The other is a collaboration space with Hermès to display custom editions of the Apple Watch Hermès along with the full lineup of the handcrafted leather straps exclusive to the model.

Professors David Dubois and Clément Bellet teach the Value Creation in Luxury course for MBA participants at INSEAD and assert that “luxury refers to an idea, an industry and a strategy.” In order to create and manage value for customers and for shareholders, luxury brands must find ways to develop a unique style that can assert a positioning in status terms. Managing the interaction between style and status is key to keeping the core roots and traditions of a style intact, while finding ways to iterate creatively and keep status signifiers across changing trends and preferences. This is all the more relevant in a moment in history when the consumers and even producers of luxury products are no longer confined to Western Europe, but expanding across North America and Asia, bringing in ever increasing rates of change into the $240b market for luxury personal goods³.

The central framework for managing value in luxury that Profs. Dubois and Bellet propose during the class is (what else) a 2×2 matrix. The contrast is between different strategic objectives for a brand depending on whether it is focused on developing style or status in the context of new creations or managing evolving markets.

In the context of this framework, Steve Jobs, Tim Cook and Jony Ive have been largely responsible for leading the creation of a unique style set that defines Apple products and the Apple brand. Key aesthetic elements like minimalistic design or the use of lengths of unadulterated brushed aluminium and glass in products such as the iPhone or MacBooks enrich the user experience. The interplay of color signatures further define the brand to users and onlookers, both glossy like the iconic iPod headphones and matte like the dark metal of an iPhone 5. White plastic and space grey metal brought Apple from the era of the colorful and iconic berry CRT iMacs to the monolithic and imposing space age OLED and stainless steel Apple Watch.

Apple’s lineup has developed elements of its style signature into status signals⁴. Its products are relatively costly in the universe of consumer technology. Judicious use of advertising and iconography has turned elements such as white headphones into visible marks of status around the world. Apple’s unique elements of style often have limited practical use — the use of aluminium in phone casings is not transformational compared to other materials and some antenna designs used in past models may in fact have impeded rather than improved signal transmission⁵.

Having 100% control of distribution is key to this experience. Angela Ahrendts has played an important role in driving forward the development of Apple’s style attributes into even stronger signifiers of status. Even if iPhones and MacBooks can be purchased at Vodafone and Fnac, the signature retail experience for Apple products will always be under Ahrendts’ control. A visit to an Apple store confirms the role of Apple products in projecting status, both to consumers who walk in and to outsiders who read about new openings captured in rapturous tones in the press, or walk past them in central locations in major cities worldwide.

Under Dubois and Bellet’s framework, over the course of the past 20 years, Apple has expertly tracked the identification of key trends in the market, created products with unique style attributes to cater to them and fortified its role as a curator and producer of status marks. The new store on 114 Champs-Elysées respects and advances Apple’s signature style in meaningful ways, as well as reinforcing its role as a provider of status symbols.

When you walk through the vast front door, it’s immediately obvious that you’re walking into an Apple store — the whole space is covered in light pinewood and there are vast tables with products displayed without a single till in sight. Huge storefront windows let passersby see what is going on inside the space and bring in a warm and natural exterior light.

Wooden tables are decorated with glass displays and signature products like MacBooks, iPhones and Watches. There’s space to move around the different tables and helpful retail employees are eager to jump in to provide guidance and answer questions without being incentivized to make a hard sell.

This is Apple’s signature style writ large — natural materials, carefully crafted designs with few breaks for functional insertions like screws or hinges and copious amounts of inviting light. The human touch is nearby but never overbearing — people are welcome to sit and take their time with the products, to begin imagining themselves with it in a space that doesn’t immediately look like a store or remind potential customers they’ll have to pay at some point.

The Genius Bar is on the first floor of the building and almost feels like going into someone’s apartment. After registering for a space in the line and wandering around the store a bit more, customers with queries are invited to wait for a second by a large stained glass window. Then, they’re invited to approach a customer service table that may as well have been a minimalist architect’s studio. Customer service requests are made personal and quiet as well as kept a little out of view from shoppers looking to browse.

The store advances Apple’s style in two meaningful and distinct ways.

The first is the forum for events and workshops, overseen by a vast kaleidoscopic arrangement in a large closed courtyard. In 2016, Angela Ahrendts announced⁶ that “we want to be more like a town square”. This vision is all the more clear in a forum-like environment lined with trees, facing a gigantic screen to support workshops, concerts and events.

The second is the boldest experiment with Apple’s style in the building, the Hermès Apple Watch room. Reportedly, this is the only retail location where the full Hermès collection is available for customers to browse and test for themselves. It’s a space that takes relative liberties with both Hermès and Apple, two brands that are notoriously protective of their image and style sets.

The room is a quiet outcrop from the ‘apartment’ layout on the first-floor, separate from the bustle of commercial activity downstairs and sheltered from customers queuing to get their batteries fixed. A hushed and respectful silence descends on the room as you enter. The tables and the activity are oriented towards a grand balcony overlooking the Champs-Elysées.

The tables are padded with careful leather mats and attendants walk around with felt cloths, carefully managing the straps and steel watches on display. The distinctive Hermès orange straps and declinations of other typical brand colors are a world apart from the industrial rubber and metal in the rest of the store.

This showroom is one of the defining features to the retail experience in the building. A bold merging of two very different styles, the Hermès room is the clearest example of Apple (and Hermès for that matter) taking calculated risks with iconic stylistic elements, finding ways to innovate on tradition to produce something new.

The new retail store establishes credibility as a place you can acquire objects to gain status in a few critical ways. It offers the opportunity for every consumer to feel exclusive by entering. It gains global credibility on a world-famous avenue frequented largely by tourists, while respecting local authenticity and the building’s heritage. With its showrooms it allows consumers to project their ideal lifestyles through the use of Apple gadgets while all the same offering a leafy democratic forum for people to learn how to use their new Apple Watches.

The 19th century corridor leading into the store feels large and prestigious and yet is open to everyone, unlike exclusive townhouses nearby that are gated away from the public.

The building itself is respectfully conserved and adorned with rich detail, some of it carefully restored like a wood and marble escalier d’honneur that leads to the first-floor showrooms.

Showrooms like the Homepod space offer an opportunity to demonstrate technical features. More importantly, they allow visitors to project their own lives into the use of the product and to take ownership over the sliver of the ideal life Apple sells as a lifestyle in the living room.

As Apple moves from taking the establishment of its status for granted, it’ll have to move to protect its position in a broader market that has spent the better part of the last decade accepting smartphones as a given.

The risk for Apple’s place as a luxury brand is that an outlet like 114 Champs-Elysées Apple’s democratizes the space too much. Is the space too accessible? Are the apartment showcase rooms too crowded? This is a delicate balance to play for a company that needs vast numbers of people to keep upgrading their phones while at the same time still allow individual buyers to feel like they’re joining a club.

Clearly, Apple is unafraid to make changes to its style sets to move upmarket — the iPhone X family is the clearest example of Apple’s design team providing new icons (the notch, the vertical cameras, the stainless steel frame) with a new level of brand and status significance. These devices are within reach of the price range for mid-range luxury Swiss watches and plainly out of reach for many prospective smartphone customers.

For all the effort this product strategy makes in maintaining elements of style and status, the onus is on the retail experience to drive home the sell that Apple is a luxury product. Yet, the store offers handsets for half the price and mixes its high-end XS and XS Max devices with the 8s and 7s. The living room showcase is a luxurious and an unreachable vision but in moments of maximum occupancy also feels a bit like an IKEA. Homepod, €349. VITTSJÖ living room TV stand, €29,99. The prophet Yogi Berra warns us, “nobody goes there anymore, it’s too crowded.”

Apple is unequivocally a luxury brand in a personal good segment resistant to differentiation on style and status marks. Its retail strategy, the brainchild of the brilliant Angela Ahrendts, has played a huge role in realizing Tim Cook’s vision and bringing Apple’s distinctive style elements into the realm of pure status icons while drifting higher on price. However, in contrast to a brand like Hermes, Apple needs to play a delicate balance of accessibility and exclusivity to keep consumer’s imaginations alive.

As the market turns a corner, space opens for Apple to preempt emerging trends in the market. Retail experiences are crucial to cementing the brand’s status and allow new creations to iterate on Apple’s style and stay in the realm of luxury. The bull case for Apple is that 114 Champs-Elysées demonstrates awareness of the role it needs to play in developing style and maintaining status and tackles the challenge head-on with verve on the plus belle avenue du monde.

¹ Image credit: “Annual Report”, Smithsonian Institution (1901)

² The photo is dated to 1928 on Parisrues.com but J.M. Weston dates the opening of 114 Champs-Elysées to 1932 and is on the right-hand sidewalk facing the Arc de Triomphe. The only other Weston store on the Champs is on 55 Champs-Elysées, which would be on the left-hand sidewalk facing the Arc de Triomphe

³ “Luxury Goods Worldwide Market Study, Fall-Winter 2017” Bain & Company (December 2017)

⁴ “Social Hierarchy, Social Status and Status Consumption”, Dubois & Ordabayeva, Cambridge Handbook of Consumer Psychology (2015)

⁵ “Steve Jobs Responds To The Antenna Issue: Hold It Different Or Use A Case”, Techcrunch (June 2010)

⁶ “Apple’s Retail Stores are Undergoing a Radical Makeover”, Fortune (August 2016)

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Apple on the Champs-Elysées

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