“In 2016, not a stellar year, Apple Inc. reported net income equal to 21 percent of sales — a ratio 12 times higher than Amazon’s. A large part of Apple’s profit is generated at its retail stores. Apple doesn’t disclose such information, but its Apple Stores are believed to have annual sales above $5,500 per square foot. No other retailer comes close. The corresponding figure for Macy’s, to take one example, is around $200.
Apple doesn’t need flashy stores in expensive locations to distribute phones and computers; those can be ordered on the internet. The Apple Stores, meticulously planned from their online appointment books to the transaction processing system that emails a receipt before you’ve walked out the door, sell an experience, not electronics. Their purpose is to persuade customers that Apple has extraordinarily exciting products for which premium prices are entirely justified.”