Ron Johnson is taking the lessons he learned from Steve and applying them to JC Penny
Even though Steve Jobs gets credit for making the gutsy move to open Apple retail stores across the country, Ron Johnson deserves a lot of praise for the Apple Store’s success.
Johnson’s vision helped Steve create the most successful chain of retails stores on the planet. Then Johnson left to become the CEO of JC Penny, where he’s faced some heavy criticism for his efforts to revitalize the brand. According to Apple’s old marketing guru Ken Segall, Ron is a visionary in his own right, and he’s transforming JC Penny just like Steve Jobs transformed Apple.
The U.S. Patent & Trademark Office has today published Apple’s latest trademark certificate, which covers the “distinctive design & layout” of its iconic retail stores. The Cupertino company originally filed for the trademark back in May 2010, nine years after the first Apple store opened its doors in Tysons Corner, Virginia.
Despite taking control of Apple just 18 months ago, Tim Cook has been named by CNBC as the highest paid CEO in America. With an average annual compensation of around $95 million, Cook beats Oracle’s Larry Ellison and JC Penney’s Ron Johnson to the top spot.
When Ron Johnson left Target to become Apple’s Retail Chief in 2000, people thought he was absolutely nuts. Apple was in danger of going out of business, and other PC manufacturers like Gateway were closing their retail locations. Johnson ignored all the warning signs because he says he saw that Apple was about to be a huge part of the digital revolution. He also recognized that Apple offered consumers something other companies couldn’t – amazing products and an incredible retail experience.
In a recent interview at Fortune Conferences, Johnson explained why customers choose to come to the Apple store to buy their products when they could get them on Amazon or Best Buy for a lot cheaper:
Apple’s retail stores offer managers and executives great lessons about employee engagement and corporate culture.
One of the interesting points in the recent NY Times article on Apple’s retail stores is that many Apple store employees feel like their work experience goes beyond simply bringing home a paycheck and working in a retail store. Apple has deftly made them feel valued and like they are part of something much bigger than themselves.
In doing so, the company provides a model of how businesses can incentivize staff members even if budgets are too tight to offer raises or other perks. There are four broad areas or lessons that managers and executives at any company or organization can learn from looking at Apple retail – all them related to carefully developing a positive and collaborative corporate culture.
Apple made a conscious and important choice about sales commissions and customer experience
Over the weekend, The NY Times posted another investigative piece in its iEconomy series that about Apple. This installment focused on Apple’s retail stores. As with previous articles in the series, this one focuses on legitimate concerns about the American economy in an age of globalization. Like the other pieces, this one targets Apple specifically and ignores the range of Apple competitors that employ similar practices.
The primary issue that the Times brings up with regard to Apple retail stores is that employees can sell thousands upon thousands of dollars worth of Apple products and still earn a relatively modest wage. The underlying sentiment is that if a retail employee sells so much hardware, he should earn more because he is contributing to Apple’s vast revenues.
The only way for things to shake out that way and remain fair would be if Apple offered performance-based awards or commissions. Apple chose not to do that because doing so would have delivered a fundamentally different customer experience than the one envisioned by Steve Jobs – a fact that the NY Times chose not to explore in any real depth.
When former Apple retail boss Ron Johnson took his leave from Cupertino to become the new CEO of JC Penney late last year, there wasn’t as much “WTF-ing” as you might expect. Sure, there was some incredulity as Johnson left the gleaming stores he had founded for JC Penney’s chain of mouldering clothing outlets, but there was also a lot of optimism: if anyone could turn around a business like JC Penney, it would be Johnson.
Johnson may still succeed, but his first moves at rehabilitating JC Penney have been failures. The stock is tanking and JC Penney posted a $163 million loss last quarter alone. Customers, it seems, are not reacting well to the new JC Penney, which eschews sales, circulars, coupons and fine print for plain, honest pricing… the kind of store where all the .99s are dropped from the price tag.
Why? Honest pricing might work for Apple, but in most of the retail word, it appears to be a sucker’s game. Customers, it turns out, only say they want fair pricing. What the really want to do is treat shopping like a game.
Apple’s retail stores are among the most profitable in the world, and their success is largely due to the former head of Apple retail, Ron Johnson. Steve Jobs hired Johnson a decade ago to help get the company’s retail division off the ground, and Johnson turned Apple retail into a wildly successful division before leaving to become CEO of JC Penny last year.
Many have heard stories of Johnson and his responsibility in creating the Apple Stores we know and love today. There was, however, another person at Apple who made a profound impact in the early days of the Apple Store.
JC Penny can’t get enough of Apple’s retail talent, as the American retailer has announced the hire of yet another Apple exec. Back in November, former Apple retail guru Ron Johnson left Apple to become the CEO of JC Penny. Now a high-level Apple retail exec has left to work under Johnson.
Ben Fay served for 8 years at Apple as the worldwide head of retail store design, and he will now be in charge of overseeing JC Penny’s own retail design strategy.