At the recent Fortune Brainstorm tech conference in Aspen, a good part of the audience chuckled when the moderator of a discussion with Ron Johnson CEO of J.C. Penny, admitted that she took her kids to the Apple store when she was in search of an interesting afternoon activity. Johnson chuckled in appreciation because he was the one who led the charge to make the Apple store a place people wanted to be, delighted in being, whether they were in buying mode or not. This former retailing head of Apple was on the podium at the conference in his new role of CEO of J.C. Penney to explain his turnaround vision for the department store chain, an admittedly challenging feat given the advent of internet storefronts and the ability for consumers to literally shop around the globe without leaving home, not to mention the somewhat moribund reputation of the J.C. Penney brand name (and yes, a few jabs from the media regarding his efforts).
What branding professional wouldn’t take an interest in the lessons learned, pro and con, from someone who made the Apple store the incredible shopping experience it is today? And for that matter, what retail brand manager wouldn’t want to understand the ups and downs of what it takes to gain the edge in this mercurial marketplace?
Here are a few of Mr. Johnson’s practical tips on the retail trade:
“Personal connections are critical in a digital world.” Johnson told his audience that while Steve Jobs was proud to have introduced three user-friendly technological interfaces to the world—the mouse, the scroll wheel, and the touch screen—he was equally keen on creating a user-friendly retail interface in which consumers could literally experience the products. Looking beyond just the transactional, Jobs and Johnson recognized that smart retailing is about more than product and price, it’s about giving people more—personal service, something a digital experience can’t provide. “For example,” Johnson explained, “Apple has always offered the most easy out-of-the-box user experience, but we noticed there was a gap between buying and using. People were intimidated by even the easiest product set-up. So we said, if we can set up a product for them in the ten minutes before they left the store and they started using it and falling in love with it, it would be transformational. It was an insight that made the Apple store relevant.”
“Sometimes you need to go backward to go forward.” In the eyes ofWall Street, J.C. Penney is undertaking something very radical in the move to its new strategy of “everyday fair pricing.” As far as Johnson and his team are concerned, this strategy is a natural fit. It’s in the brand’s DNA. “When Steve came back to Apple in 1997 and launched the Think Different campaign, he was simply connecting to Apple’s unique DNA,” Johnson said. “If you go back to J.C. Penney in 1920, Mr. Penney lived by what he called the ‘golden rule.’ He wrote a letter to customers saying we don’t believe in marketing our goods beyond a fair profit. We will not mark things up to mark them down. Every business has its own pricing strategy. We’ve chosen to tap into our DNA and go back to everyday pricing.”
“The customer should be at the center of the experience.” There were a number of ways Johnson put this lesson into words during his talk, the most memorable being, “Put yourself in your customer’s place by looking in their heart, not at their pocketbook. At Apple, we eliminated channel conflict by not paying employees a commission. At J.C. Penney, we’re doing the same thing. We have 30,000 employees being paid on mission—one team, one mission. Much like at Apple, we will spend as much time with customers as it takes to help them. In business school we learned about good profits and bad profits. Good profits are based on earning loyalty through service, products, presentation, and honoring customers. They’re sustainable. In the long run you’ll earn good profits by treating the customer right.”
“Mindshare always precedes marketshare.” For those who hadn’t noticed, the J.C. Penney logo has had a bit of a facelift, mostly to underscore the fact that it’s not just your mother’s (or grandmother’s) J.C. Penney. “Our brand has great heritage,” Johnson explained, “but it needed modernization. It was not part of our customer’s everyday life. Our new look is intended to get people thinking about J.C. Penney before they come into the store. Like Apple, it has to become part of the popular consciousness.”
“They should be able to go toe-to-toe with Steve Jobs and the Ritz-Carlton should be fighting to hire them for their hotels.” That, in essence, was Johnson’s response to a question from the audience about what makes a great retail employee. “Our teams at the Apple stores were made up of people who were passionate about technology. They knew the products and loved to talk about them. Any of them could talk about them with Steve. They were also hired because of their Ritz service mentality. At Penney’s we’re breaking the store into hundreds of shops, and each shop will have its own criteria for hiring based on the product. Our teams will be able to talk with passion about whatever it is they’re selling, be it clothes, cookware, or household goods. The world is filled with folks who have a passion for fashion or cooking and also have great people skills.”
“It’s a marathon, not a sprint.” As a branding professional, I can tell you that this is something that is relevant to any and every category. Brand success doesn’t happen overnight, but takes diligence and patience and consistency of effort across multiple points of customer touch. Johnson may be under pressure to perform, but he’s acutely aware of the fact that turning around a company as large as J.C. Penney will take time. “You can judge a sprint right out of the blocks,” he told the audience. “A marathon is different. Every runner has his or her own strategy. Some like to start slow and then take a strong kick. Others like to put the pressure on. We’re in a marathon. We have a vision and we’re going to stick to our plan. We’re all about thinking differently and I learned this from Steve. Steve took a contrarian perspective and stuck with it and we’re going to do the same. We’re going to treat this like a start-up. Create a new retail model that’s good for the next 100 years.”