There is a terrific piece in the new Fortune about Ron Johnson, who has gone from engineering Target’s cheap chic approach to housewares through the designs of Michael Graves to running the Apple Stores (described as “the most profitable retail stores in the world) to being the CEO of JC Penney, which he wants to turn into "America's favorite store" by the end of 2015.
It is worth reading in its entirety , but here are some relevant excerpts:
• “To attract customers, Johnson unveiled a radically simplified pricing strategy, a slimmed-down but improved selection of brands, and a change in the store's layout, which will consist exclusively of mini-boutiques arrayed around a ‘town square.’ His goal is to reclaim the department store's long-lost identity as a place shoppers visit not only for the goods but also for the enchantment of discovering something new.
“The new pricing strategy is ambitious -- and risky. Customers have been trained by Penney's and others to hold out for massive discounts. In the era of online shopping, few have the inclination to visit a store with a faded brand like J.C. Penney's. Johnson knows all of that and seems to relish the challenge. Behind his preppy, earnest exterior beats the heart of someone who is out to change the experience of today's shopper -- one $4 towel at a time.”
• “Johnson promises a more appealing experience. He plans to improve the mix of Penney's offerings, partly by reducing the number of items and also by partnering with brands (including some that are new to Penney's) to create a sort of mall within a store. By the end of 2015, every store will host 100 or so discrete shops, including Martha Stewart, Izod, Arizona, and Sephora. The concept isn't original. Many department stores already have branded mini-boutiques; the difference is that all Penney's will consist solely of such mini-stores.
“The shops will be laid out along pathways, with a square in the center. The square might offer, say, free ice cream in the summer or balloons for kids. The idea is to lure visitors, who will then shop.
“Johnson's new pricing strategy offers only three categories: ‘everyday’ (about 40% off the old retail price); a monthly sale on certain items; and a final, ‘best’ price. Forget serial discounts; Johnson insists people will come because the prices are ‘fair and square.’ He's pitching it as a return to the company's original values.
• “(Johnson) knows he's risking his reputation by proclaiming ‘transformation’ rather than incremental change. But he won't admit even the possibility that his plan might not succeed. ‘The only things that haven't worked for me are when I've held back,’ he says. ‘There's no reason to sell an idea short. The only risk would be to not fulfill the dream’.”
It is worth reading in its entirety , but here are some relevant excerpts:
• “To attract customers, Johnson unveiled a radically simplified pricing strategy, a slimmed-down but improved selection of brands, and a change in the store's layout, which will consist exclusively of mini-boutiques arrayed around a ‘town square.’ His goal is to reclaim the department store's long-lost identity as a place shoppers visit not only for the goods but also for the enchantment of discovering something new.
“The new pricing strategy is ambitious -- and risky. Customers have been trained by Penney's and others to hold out for massive discounts. In the era of online shopping, few have the inclination to visit a store with a faded brand like J.C. Penney's. Johnson knows all of that and seems to relish the challenge. Behind his preppy, earnest exterior beats the heart of someone who is out to change the experience of today's shopper -- one $4 towel at a time.”
• “Johnson promises a more appealing experience. He plans to improve the mix of Penney's offerings, partly by reducing the number of items and also by partnering with brands (including some that are new to Penney's) to create a sort of mall within a store. By the end of 2015, every store will host 100 or so discrete shops, including Martha Stewart, Izod, Arizona, and Sephora. The concept isn't original. Many department stores already have branded mini-boutiques; the difference is that all Penney's will consist solely of such mini-stores.
“The shops will be laid out along pathways, with a square in the center. The square might offer, say, free ice cream in the summer or balloons for kids. The idea is to lure visitors, who will then shop.
“Johnson's new pricing strategy offers only three categories: ‘everyday’ (about 40% off the old retail price); a monthly sale on certain items; and a final, ‘best’ price. Forget serial discounts; Johnson insists people will come because the prices are ‘fair and square.’ He's pitching it as a return to the company's original values.
• “(Johnson) knows he's risking his reputation by proclaiming ‘transformation’ rather than incremental change. But he won't admit even the possibility that his plan might not succeed. ‘The only things that haven't worked for me are when I've held back,’ he says. ‘There's no reason to sell an idea short. The only risk would be to not fulfill the dream’.”
- KC's View:
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I cannot even imagine a planet on which I would say I was looking forward to visiting a JC Penney. But there you go ... that’s precisely what Ron Johnson has done for me - created high expectations where there used to be none.
I have no idea if this is going to work. But I’m certainly willing to give him a shot, and it’d be really cool if he could simultaneously revive and reinvent JC Penney.
The signs are good. Not only are the new Ellen Degeneres commercials very cool, but he stood up to the small group of haters who tried to stop Degeneres from being named JC Penney’s new spokesperson.
Beyond that, I just love the idea of a guy who figures that if you are going to succeed or fail, you might as well do it big.
