Ron Johnson’s JC Penney

I can’t wait to see what Ron Johnson does with JC Penney; his impact on Target was huge and lasting. Target is still cool. For JC Penney, it’s going to be a huge transformation and it’s probably going to be the first real innovation for bricks-and-mortar clothing stores in a long time. No more decimal pricing. No more sales. No more crappy clothes. Just the stuff you want, at the prices you want.

The Seattle Times recently published an interview of Ron Johnson:

For 15 years, he helped shape Target’s cheap chic image. Then, he spent about a decade changing the way Americans shop for electronic gadgets at Apple.

Now, Johnson faces perhaps his biggest challenge yet as CEO of J.C. Penney: dust off one of the dowdiest brands in retailing to make it cool again. To do that, he’s borrowing from Apple’s uber-successful playbook. […]

My favorite answer:

Q. What ideals have you embraced from Steve Jobs?

A. The importance of doing everything you do to your very best. And that the journey is the reward. If you do things well one at a time, you end up in a really good place. Don’t get ahead of yourself. Control the things you can.

It’s all about having strong opinions, executing toward them, and building on a philosophy and experience rather than on a series of financial transactions.

The most striking change is that Johnson is getting rid of sales almost entirely (which is especially impressive when you consider that JC Penney had more than 500 individual sales last year). From a financial perspective, sales seem to make sense; when there’s a sale, more merchandise is sold. However, when you go up the stack one level further, and you think about the long term effects from sales, you start to realize that sales are kind of abusive. Sales are manipulative, and they train customers to feel like they’re being screwed if what they buy isn’t on sale. It’s a wholly bad experience for both the store, which loses favor in the minds of its most passionate customers (as everything not on sale seems expensive), and for the customers themselves, who feel pressure to buy only great deals. If customers only buy great deals, then the company only sells things with low profit margins. Johnson’s gamble is on selling everything at a fair and reasonable price, all the time, in an attempt to prevent that negative feedback loop from forming.

All of the recent changes at JC Penney are based on philosophical ideals in spite of what common sense says about raw financials, just like Apple. It’s going to be exciting to watch the transformation.



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