One difference between Apple and JCP retail is that Apple had no retail stores so they didn't have to change consumers conceptions of what the stores should be like.
A JCP customer is very different than most (not all) Apple customers and you certainly can't use the same techniques. Also, and even though Target has tried this to a certain extent, you can't upscale a JCP store any more than you can upscale Wal-Mart. The brand is too well established.
There's absolutely nothing Johnson or anyone else could do to get me to walk into a JCP, so he's got to rely upon the customers that JCP has already, but perhaps get them to spend more.
What's interesting about the failure of the "honest pricing" model is that Apple does completely the opposite - they tend to charge list price for everything, even those third party accessories that can be purchased elsewhere for less. It's always boggled my mind a bit that consumers are willing to pay full price in an Apple store. My usual thought when I see those prices is, "are they nuts? - I can walk down the street and get it for less."
Consumers are idiots. They want to feel like they're getting a discount. This is why Black Friday sales work so well even when stores provide pretty much the same discount they provide all the time.
When some of the electronics chains have declared bankruptcy and have had liquidation sales, I've stopped in to look for bargains, but usually, the prices are still higher than what NYC based large retailers BH and J&R would charge. And yet consumers clear the merchandise out as if they were giving it away. In fact, I stopped a couple from buying an overpriced Sony TV when I brought up J&R's site on my phone and showed them that it was $300 less there. It's all psychological and consumers need to feel that the products they're purchasing are a bargain, even if they're not.
Frankly, I don't know how any of the big general merchandise chains survive. It's all a bunch of junky, look-alike merchandise and most of these chains have far too many stores. Does any region need two of the same chain stores within two miles of each other, especially in a still poor economy? I just noticed that Bloomingdales opened a new store on Old Country Road in Long Island probably less than a mile away from their store in the Roosevelt Field Mall. Some chains are on Old Country Road, in the Roosevelt Field Mall and just a few miles away in the Garden City mall. It's insanity.
From what I keep reading (mainly in the NY Post), Ron Johnson seems to be doing a terrible job. I wouldn't be surprised if a bunch of stores begin closing in the next few years.
Mathematician and Philosopher, Nicholas Nasseem Taleb, wrote an interesting book about the phenomenon of luck in business. He said most executives who are credited with supreme achievements are no more talented than dozens if not hundreds of others, they are just lucky to be in the right place at the right time.
With Ron Johnson, the right place just happened to be with Apple at a time when the iPod halo effect was driving people's curiosity to find out more about the company's other products. JC Penney might have been much better served by that other ex-Apple employee, John Browett, who was clearly more of a discounter and "pile it high, sell it cheap" kind of retailer than Johnson, who although talented, really lucked into such high success.
Browett understands competitive, low-end marketing; Johnson understands high end quality. It seems like the board of JC Penney are confused about what their store represents, and which sector of the market they are in.
JC Penny's was always on the downhill slide to begin with. They just need someone to point the finger at. However, I think he should just go back to Apple. He understands them and they could use him back at Apple. It's clear he never should've left Apple for a lesser company.
Bottom line was that Ron Johnson was not a retail guru. He was the beneficiary of the enormous tailwind of a company that needed nothing more than order takers because everyone wanted one. You could have put a monkey in and done what johnson did at apple.
Now the tide has gone out and you see who is swimming naked. Ron Johnson is not such a genius after all. With Apple he was lucky to be in the right place at the right time, period. For that he has made millions there and many more milking JCP. Good for him!
That's simply not true. I don't remember people clamoring for Apple stuff when he came into town. In fact, Apple was on it's last leg. He created the wonderful retail experience people regularly get at Apple stores. I think he should've just waited to make changes or just stayed at Apple. He should just go back there and collect the money. Apple Stores are his vision through and through. Also note that what works in tech and electronics doesn't necessarily translate when it comes to clothes. Many people are tech savvy or geniuses. In those cases simple pricing and offerings work. Clothes is a whole other story.
this has nothing to do with Apple and should be backpage on even a subsection of the forum with no 'blog' entry at best. This is APPLEinsider and not WHERERETHEYTHATUSEDTOBEATAPPLEinsider after all
And yet, here we are.
mvigod
Bottom line was that Ron Johnson was not a retail guru. He was the beneficiary of the enormous tailwind of a company that needed nothing more than order takers because everyone wanted one. You could have put a monkey in and done what johnson did at apple.
Now the tide has gone out and you see who is swimming naked. Ron Johnson is not such a genius after all. With Apple he was lucky to be in the right place at the right time, period. For that he has made millions there and many more milking JCP. Good for him!
False. Apple's retail ventures prior to his involvement were failures. Johnson was instrumental in building the authentic Apple retail experience we all know today.
bugsnw
Amazon.com utilizes all of the above. They have everyday low prices mixed with a plethora of sales gimmicks that are always changing and adapting. Friday sales, Amazon Prime, 4 for 3 promotions, contests, and more. Why can't JCP do the same?
Because one of those stores is entirely online with zero physical presence. You may as well ask why Apple can't be more like Vector/Cutco.
As a former JCP pricing team associate, here is what I know: the typical old frenzy of three price changes per week, plus anything that changes prices during business hours (DOORBUSTERS) was a nightmare for everyone involved. A doorbuster sale that lasts from opening to 1pm means we started manually changing sale signs at 12:30 and finished around 1:30. Confused and angry customers every single time, along with people who insisted on getting the doorbuster price well into the afternoon because they "drove a long way."
I will gladly take my money to stores that offer sensible and predictable discount periods. Steam Summer Sale, Apple back-to-school, iOS app holiday discounts, etc. I appreciate JCP working towards that grand simplification, but their customers are mostly shrewd clearance hunters and other "recreational shoppers." It's almost a bigger waste of time than if Walmart tried to adopt a modicum of ethical business practices: the typical Walmart customer is a honey badger.
Good thing he left Apple, otherwise all of those smart stock analysts would be blaming him for the decline in stock price and that Apple is doomed. The JCP thing doesn't appear to have been a smart career move in hindsight. Apple is still looking for his replacement, maybe he can come back home?
Apple is down a couple of percent today, so maybe the analysts didn't get the memo?
I used to work at Penney's, during college. Used to look forward to buying there and continued to for years. During the last few years or decade, they have less and less of anything that appeals to me. My wife and I walk thru the store and literally cannot find anything we are interested in, except an occasional polo shirt or the like.
My harsh reaction would be to recommend that Penney's fire the clothing buyers (or at least get them to change their mindset) and stock clothing that I would want to wear.
Bottom line is: You must offer a product or service that consumers want.
The problem is that Penney (and Sears) cannot compete with Walmart and Target (both of which have much more efficient operations) on the low end, and has problems competing with Macy's on the "middle end", since their traditional clientele has been more the Target customers. Unfortunately, their biggest asset at this point is probably the land under the stores...
Comments
A JCP customer is very different than most (not all) Apple customers and you certainly can't use the same techniques. Also, and even though Target has tried this to a certain extent, you can't upscale a JCP store any more than you can upscale Wal-Mart. The brand is too well established.
There's absolutely nothing Johnson or anyone else could do to get me to walk into a JCP, so he's got to rely upon the customers that JCP has already, but perhaps get them to spend more.
What's interesting about the failure of the "honest pricing" model is that Apple does completely the opposite - they tend to charge list price for everything, even those third party accessories that can be purchased elsewhere for less. It's always boggled my mind a bit that consumers are willing to pay full price in an Apple store. My usual thought when I see those prices is, "are they nuts? - I can walk down the street and get it for less."
Consumers are idiots. They want to feel like they're getting a discount. This is why Black Friday sales work so well even when stores provide pretty much the same discount they provide all the time.
When some of the electronics chains have declared bankruptcy and have had liquidation sales, I've stopped in to look for bargains, but usually, the prices are still higher than what NYC based large retailers BH and J&R would charge. And yet consumers clear the merchandise out as if they were giving it away. In fact, I stopped a couple from buying an overpriced Sony TV when I brought up J&R's site on my phone and showed them that it was $300 less there. It's all psychological and consumers need to feel that the products they're purchasing are a bargain, even if they're not.
Frankly, I don't know how any of the big general merchandise chains survive. It's all a bunch of junky, look-alike merchandise and most of these chains have far too many stores. Does any region need two of the same chain stores within two miles of each other, especially in a still poor economy? I just noticed that Bloomingdales opened a new store on Old Country Road in Long Island probably less than a mile away from their store in the Roosevelt Field Mall. Some chains are on Old Country Road, in the Roosevelt Field Mall and just a few miles away in the Garden City mall. It's insanity.
With Ron Johnson, the right place just happened to be with Apple at a time when the iPod halo effect was driving people's curiosity to find out more about the company's other products. JC Penney might have been much better served by that other ex-Apple employee, John Browett, who was clearly more of a discounter and "pile it high, sell it cheap" kind of retailer than Johnson, who although talented, really lucked into such high success.
Browett understands competitive, low-end marketing; Johnson understands high end quality. It seems like the board of JC Penney are confused about what their store represents, and which sector of the market they are in.
Originally Posted by dasanman69
Why ask if you wouldn't believe it anyway?
I didn't.
Obviously
Quote:
Originally Posted by mvigod
Bottom line was that Ron Johnson was not a retail guru. He was the beneficiary of the enormous tailwind of a company that needed nothing more than order takers because everyone wanted one. You could have put a monkey in and done what johnson did at apple.
Now the tide has gone out and you see who is swimming naked. Ron Johnson is not such a genius after all. With Apple he was lucky to be in the right place at the right time, period. For that he has made millions there and many more milking JCP. Good for him!
That's simply not true. I don't remember people clamoring for Apple stuff when he came into town. In fact, Apple was on it's last leg. He created the wonderful retail experience people regularly get at Apple stores. I think he should've just waited to make changes or just stayed at Apple. He should just go back there and collect the money. Apple Stores are his vision through and through. Also note that what works in tech and electronics doesn't necessarily translate when it comes to clothes. Many people are tech savvy or geniuses. In those cases simple pricing and offerings work. Clothes is a whole other story.
You guys do remember that he was VP of merchandising at Target right? And the Target brand today is largely a result of his work in restyling it.
If JCP can survive it'll be because he's going to drag it into the 21st century.
charlituna
this has nothing to do with Apple and should be backpage on even a subsection of the forum with no 'blog' entry at best. This is APPLEinsider and not WHERERETHEYTHATUSEDTOBEATAPPLEinsider after all
And yet, here we are.
mvigod
Bottom line was that Ron Johnson was not a retail guru. He was the beneficiary of the enormous tailwind of a company that needed nothing more than order takers because everyone wanted one. You could have put a monkey in and done what johnson did at apple.
Now the tide has gone out and you see who is swimming naked. Ron Johnson is not such a genius after all. With Apple he was lucky to be in the right place at the right time, period. For that he has made millions there and many more milking JCP. Good for him!
False. Apple's retail ventures prior to his involvement were failures. Johnson was instrumental in building the authentic Apple retail experience we all know today.
bugsnw
Amazon.com utilizes all of the above. They have everyday low prices mixed with a plethora of sales gimmicks that are always changing and adapting. Friday sales, Amazon Prime, 4 for 3 promotions, contests, and more. Why can't JCP do the same?
Because one of those stores is entirely online with zero physical presence. You may as well ask why Apple can't be more like Vector/Cutco.
As a former JCP pricing team associate, here is what I know: the typical old frenzy of three price changes per week, plus anything that changes prices during business hours (DOORBUSTERS) was a nightmare for everyone involved. A doorbuster sale that lasts from opening to 1pm means we started manually changing sale signs at 12:30 and finished around 1:30. Confused and angry customers every single time, along with people who insisted on getting the doorbuster price well into the afternoon because they "drove a long way."
I will gladly take my money to stores that offer sensible and predictable discount periods. Steam Summer Sale, Apple back-to-school, iOS app holiday discounts, etc. I appreciate JCP working towards that grand simplification, but their customers are mostly shrewd clearance hunters and other "recreational shoppers." It's almost a bigger waste of time than if Walmart tried to adopt a modicum of ethical business practices: the typical Walmart customer is a honey badger.
Quote:
Originally Posted by AZREOSpecialist
Good thing he left Apple, otherwise all of those smart stock analysts would be blaming him for the decline in stock price and that Apple is doomed. The JCP thing doesn't appear to have been a smart career move in hindsight. Apple is still looking for his replacement, maybe he can come back home?
Apple is down a couple of percent today, so maybe the analysts didn't get the memo?
Quote:
Originally Posted by littlejon1
I used to work at Penney's, during college. Used to look forward to buying there and continued to for years. During the last few years or decade, they have less and less of anything that appeals to me. My wife and I walk thru the store and literally cannot find anything we are interested in, except an occasional polo shirt or the like.
My harsh reaction would be to recommend that Penney's fire the clothing buyers (or at least get them to change their mindset) and stock clothing that I would want to wear.
Bottom line is: You must offer a product or service that consumers want.
The problem is that Penney (and Sears) cannot compete with Walmart and Target (both of which have much more efficient operations) on the low end, and has problems competing with Macy's on the "middle end", since their traditional clientele has been more the Target customers. Unfortunately, their biggest asset at this point is probably the land under the stores...