However, Apple is an anomaly. Most US retailers are just staying afloat while foreign retailers are benefiting from the weak dollar and low rents in key American tourist districts. Brooks Brothers, a staple in American fashion retail, recently vacated a 30,000 square-foot shop on Fifth Avenue. The prime location is being eyed by Japan’s Uniqlo, Britain’s Topshop and Spain’s Zara. Topshop and Uniqlo have already found New York homes in SoHo and Lower Broadway, respectively.  Is it time for American retailers to consider setting up shop in emerging markets, consolidating operations or joining forces with stronger global retailers?

Walmart recently entered the Indian market by partnering with Bharti Group, owner of India’s largest telecom company run by businessman Sunil Mittal.  Bharti Walmart, called Best Price, opened its first store in Amritsar with plans to open 15 additional locations over three years. So far it’s a totally new concept to Indians who are used to buying from small, independent merchants. This venture and others like it could provide the balance necessary to wait out the effects of the recession.

This recession has proven that the economy is truly global. Businesses cannot merely consider what’s happening in their home states but must stay aware of international opportunities. That said, should other US retailers follow the trend of crossing seas?

While Microsoft definitely has the money to drive a successful retail strategy, analysts question whether they have the products to sustain it.  Allan B. Krans with Technology Business Research was quoted in the LA Times saying, “Microsoft is putting the cart before the horse. Stores do not draw customers to products; innovative products bring customers to stores.” 

Krans makes a valid point but there is something to be said for the store experience.  The Apple store experience has been described as “magical” and while the products are the draw, the store brings the personality of the product to life. Apple products have become representative of a lifestyle that is encapsulated in the store experience. The store has become such an experience that many people who are not Mac fanatics, have visited the store just to see what all the talk is about. And chances are, once they got inside the store, they got it.  Properly executed, the store is the connector between the product and the consumer.  Apple is a perfect example.  The biggest challenge for Microsoft may not be retailing in this economy, it may be defining a personality intriguing enough to capture in a store environment.

Although old-fashioned, Georgetown has a hip inventory of retailers — Ralph Lauren, Bebe and Urban Outfitters to name a few. It’s a direct hit on Apple’s demographic. The problem is that Apple’s signature retail style does not fit in the Georgetown scene.  According to the Bloomberg article, this isn’t the first time Apple has encountered that sort of backlash. A store proposed for a Boston neighborhood was rejected on the basis that the design “didn’t have a sense of place.” Apple redesigned the store and it opened last year.

This begs the question, what is the relationship between retail design and the community ?  How much should you customize a store design to match a location? How do you preserve the brand in the process?

In October we wrote about a unique Target store that was designed to coordinate with it’s Bloomfield, Michigan neighborhood. Target even has a “unique stores” team that designs stores with the community in mind.  Right now retailers are looking for ways to build deeper relationships with the consumer –beyond price.  Integrating the spirit of the community surrounding a retail location into the design could be an avenue.

Martin Lindstrom puts forth the “smash your brand” theory which postulates that some brand elements are so strongly identified with a product that, presented on their own, the customer can still make a connection with the product. For instance, the Coca-Cola contour bottle, Tide orange or Carolina blue are unmistakeably linked to their brands. Consider this idea at retail.  Smashing your brand at retail could create the freedom to build unique spaces that connect with whole communities on an emotional level while maintaining brand elements that are undeniably yours.

While the Internet is abuzz with conspiracy theorists who think the move is indicative of something much more disastrous, people like Tim Bajarin, an industry analyst, told USA Today, “I’ve got to take it somewhat at face value.” And it makes sense. The economy is making everyone rethink everything and Apple is surely feeling the pinch. Companies have to be much more conservative with their marketing dollars and optimization is the name of the game. It only makes sense for Apple, and all retailers for that matter, to focus marketing efforts on the most direct contact they have with their customers — in the store.

What do you think? Should companies direct more of their attention on interactions with customers at retail? How should they go about it?