Top Blogs of 2012: FashInvest Exclusive: Ron Johnson, CEO of JCPenney Talks about the Rocky Road of Reinventing Retail
Visions of Changing the Traditional Retail Paradigm
On Tuesday, we at FashInvest had the pleasure of attending a Fashion Group International meeting hosted by Robin Lewis, CEO of The Robin Report. Ron Johnson, CEO of JCPenney gave an outstanding presentation about his plan to reinvent the company. The welcoming speech was delivered by Laura Mc Ewen, Vice President and Publisher at Self Magazine and the presentation was moderated by Robin Lewis.
(left) Ron Johnson, CEO of JCPenney, (right) Robin Lewis, CEO of The Robin Report
Ronald Johnson has been the Chief Executive Officer of J. C. Penney Company, Inc. since November 1, 2011. Mr. Johnson served as Senior Vice President of Retail at Apple Inc. since January 2000. He led Apple’s retail strategy, responsible for its overall execution and performance. He joined Apple in 2000. He has over 20 years of experience in retail and merchandising as well as a strong track record for delivering consistent year over year growth for billion-dollar … companies. Prior to Apple, he held various management positions at the Target Corporation and also served as its Vice President of Merchandising for Target Stores. Mr. Johnson has been Director of J. C. Penney Company, Inc. since August 01, 2011. He served as a Director of AuctionDrop, Inc. Mr. Johnson received his M.B.A. degree from Harvard and a Bachelor of Arts in Economics from Stanford University.
What attracted Ron Johnson to JCPenney was its rich history. The company is 110 years old and was founded on a great idea called The Golden Rule: “The best thing in life is to treat someone like you would treat yourself.” JCPenney was also the first store to rollout chain stores across the country. There are currently over 1,000 stores across the country.
Recently JCPenney has seen decline in stock prices and sales, due to competitors such as Target meeting the needs of the consumer and much more. Johnson states: “Transform isn’t the right word to describe what we are doing. Transform means change, you can transform something and it doesn’t mean its better, it’s just different. What we’re looking to do is to take a company that has gotten a little behind in the industry from a product, presentation, fashion and technology perspective and to put it way out front, because if you set your goal out front, even if you come up slightly short, you’ll still be ahead of the rest. We’re not here to transform, but leap ahead in the industry.”
Johnson and his team are treating JCPenney as a startup; they plan to reposition the company so there’s a vital role in American retailing and a unique market position that can grow for the next few decades. Johnson states: “The quest that I have for my team is after depromoting and going through painful drops in sales , we’ll known how big the company is and that’s the size of our startup.”The team also plans to reposition JCPenney as the first “specialty department store”, meaning that it will be a store that is known for having a collection of shops, plus a new interface for retail. Mr. Johnson states: “I don’t want us to be America’s favorite department store; I want us to be America’s favorite store period.” With the repositioning of the company, consumers will be able to walk into a JCPenney and have as many choices as you would have in the entire mall.
Consumers won’t have to check out every time they leave a store and don’t have to make a commitment to go in because every store won’t have a storefront, making it easier to maneuver from store to store. Each shop will be pure to its brand; they all will have they’re unique floor, unique architecture, the brand’s point of sales signs and even unique hangers that go with the product(s), which are all typical concepts that you would find in specialty stores. This concept has also led to a variety of partners signing up with the company.
JCPenney will have a range of activities for the consumer. This will consist of high-speed internet, couches (so that people can sit down and check their emails), seating next to coffee and yogurt shops, for children, there will be Lego tables to play with while mom shops, there will also be iPads and MACs loaded with games. The goal is that every area of the store will have its own life, creating a new interface for retail. The company will also have a seasonal space built in, where there will be activities for Christmas, which will include getting your picture taken with Santa!!
Johnson states: “The reason we have to change is not to compete with retail today, but to get ahead of tomorrow. We will connect customers intimately with creators, meaning that we are connecting great designers and brands like Joe Fresh in a pure environment with customers on their terms.”
Overall, Johnson says that the reinvention is simple, 100 shops, a half mile street, a square and an entirely new technology platform. This sounds easy, however they are huge factors in today’s retail industry. These are all key components that can either make or break a company. Johnson also states: “In reinvention, we will tweek the tactics, but won’t change the vision.”
Ron Johnson’s presentation was exceptional; there was an array of positive feedback from industry professionals.
“I’ve been on record, loudly and clearly across various print and broadcast media, that I drank the Kool-Aid and am a convinced as he is that this is not only the right direction, but that he will break the existing retail model and is actually re-inventing it. Not just transforming JC Penney, not just re-defining department stores, but truly creating a new model that does not exist today. As he said, he does not want to be just “America’s favorite department store…. But, America’s favorite store, period.” ~Robin Lewis, CEO of The Robin Report
After listening to Mr. Johnson, it appears that the smartphone will act as a concierge between the store, brands and customers, ultimately putting the power where it belongs, in the consumer’s hands.
By Lolita A. Alford