DMSD Insider: Former Apple Retail head Ron Johnson talks remaking JC Penney using Apple experience

Friday, January 27, 2012

Former Apple Retail head Ron Johnson talks remaking JC Penney using Apple experience

Former Apple Retail head Ron Johnson talks remaking JC Penney using Apple experience:

Ron Johnson, Apple’s former head of retail, pioneered the concept of the Apple Retail Stores and the Genius Bar a decade ago. As you know, he is also yet another established Cupertino executive to use experience at Apple and tap his peers in an effort to transform an industry and rethink a company. Another one: The iPod Godfather Tony Fadell whose intelligent thermostat made quite a stir among the technophiles. Not everyone succeeds, as evident in the case of former Apple hardware chief Jon Rubinstein, who just left Hewlett-Packard following a series of missteps with webOS and Palm.

Due to take over CEO post at the American mid-range department store chain on Feb. 1, Johnson on Wednesday shed more light on a new strategy for an ailing JC Penney, and boy, does it draw from everything he learned during the Apple gig. He conveniently kicked off his presentation with a slide adorned by an Apple logo, which was immediately followed by another “What Were You Thinking?” slide.

Johnson then launched into an appraisal of Apple, likening the iPhone maker to a prime model of lasting brand experiences. Johnson, who left Target for Apple in 2000, recalled that at the time: “There wasn’t one positive believer who thought an Apple retail store could work.” He then put up a slide depicting the Grand Central outlet, a massive new Apple store built inside New York City’s landmark Grand Central Terminal.

Reiterating how he built Apple Stores on experiences, not commissions, the executive noted:

It’s not about buying. It’s about enriching someone’s life. [...] The magic of the store that makes everyone want to come is all the stuff you get beyond the transaction, ’cause at Apple, the relationship doesn’t end when you buy. That’s where it begins. And we’re going to do that at JC Penney.

A few other interesting highlights are below:

The decision to leave Apple for JC Penney was “the best decision I’ve made yet,” and the toughest part was breaking it to Steve Jobs. Johnson recalled Apple’s then CEO simply looked up at him and asked, “Are you serious?” According to a summary of his talk provided by ifoApplestore, which specializes in Apple retail, and this QuickTime webcast provided by JC Penney, the incoming CEO said that despite the wide availability of Apple’s products these days, “People like to come to the Apple stores.”

The Texas-headquartered retailer wants to remake its outdated retail strategy, so they hired Ron Johnson to take the reigns. He’s facing an uphill struggle, though, as JC Penney’s share is down to 5 percent, matching Apple’s retail share a decade ago. The Apple Retail store as we know it has become a retailing phenomenon, with many calling Apple America’s greatest retailer.

Department stores nowadays are not that crowded, because the sales concept is broken and the experience plagued with countless, often meaningless promotions. “Steve would have called this insanity,” Johnson said concerning the 590 mail promotions JC Penney amassed last year. Contrast this to Apple’s carefully chosen promotions, ran sparingly. “At some point, you as a brand look desperate,” he warned.

Founded in Wyoming in 1902 by James Cash Penney and William Henry McManus, JC Penney today runs 1,107 department stores in all U.S. states and Puerto Rico and operates catalog sales merchant offices nationwide in many small markets.