Apple products are everywhere. There are Apple users in parts of the world that have access to digital communication infrastructures. Some of its products such as the iPhone and iPad remain among the most popular in their respective product categories. Nevertheless, in considering its global reach and worldwide popularity, it is also important to understand its distribution strategy as an integral part of its business strategy.
Examining the Distribution Strategy of Apple: Channels of Distribution and Specific Components of its Distribution Strategy
The company uses a multi-channel distribution strategy as part of its marketing mix and in consideration of its supply chain strategy. This means that it sells products through different channels to maximize its reach and increase its product availability. Below are the specific distribution channels of Apple:
• Direct Retail: The company operates its own Apple Stores. These are physical stores located in key geographic markets. They serve as a one-stop place for purchasing products and even availing value-added and after-sales services such as warranties and repairs. These stores are focused on providing an elevated customer experience and act as showrooms rather than simple and bare points of sales.
• Online Stores: Apple also maintains an official website which also serves as its online distribution channel. It has a built-in electronic commerce functionality that allows individuals to purchase their desired products with options for product customizations. Products bought from its website are usually directly shipped from a regional warehouse or the production factory itself.
• Authorized Retailer: There are also third-party retailers called authorized retailers that sell Apple products and adhere to the showroom concept of Apple Stores. These retail stores also function as a one-stop place for purchasing products and availing value-added and after-sales services. Sales attendants undergo training to provide product knowledge or technical capabilities for basic troubleshooting.
• Network Carriers: Apple also partners with providers of network services or network carriers to sell some of its consumer electronic devices such as iPhones, iPads, and Apple Watch. Some carriers also sell Mac devices. These network carriers offer flexible payment terms bundled with their network service plans. Some even subsidize Apple products as part of their sales promotion tactics.
• Other Third-Parties: The company also distributes its products through wholesalers which resell these to other smaller retailers. It also distributes through other third-party retailers such as big box stores or branded retailers and electronic stores. Newer released products are immediately available to these retailers most of the time because of their access to the wholesale market.
2. Strategic Components
It is also important to note that Apple uses both direct distribution and indirect distribution, online and offline distribution, and push and pull marketing as important considerations in its distribution strategy. These strategic components supplement its competitive advantage. Take note of the following details:
• Direct and Indirect Distribution: Using both direct and indirect channels of distribution ensures that its products are accessible and available to as many people as possible. Its direct channels include its own Apple Stores and official website while its indirect channels include all third-party retailers. Note that indirect distribution accounts for most of the sales of the company.
• Online and Offline Distribution: Remember that the company also sells its products through its website. Some of its third-party retailers such as authorized retailers, network carriers, and other e-commerce platforms provide online distribution channels. The bulk of its sales still come from physical stores. Some people prefer purchasing items online while most consumers still prefer visiting particular stores.
• Push and Pull Marketing: Part of the distribution strategy of Apple is a push and pull marketing strategy. A push strategy involves building and maintaining relationships with third-party distributors such as authorized retailers and network carriers. A pull strategy involves aggressive promotional strategy and tactics targeted toward consumers to pressure distributors to stock and distribute or sell its products.