The man who set up Apple’s retail empire, has been talking about his plans for JC Penney (where he is now CEO), claiming that in-store retail isn’t dead and suggesting that online shopping won't keep growing forever.
In an interview transcribed by Fortune, Ron Johnson described how the Apple Store has become the “the most productive in the world.” Despite the fact that the company also sells its products at “Amazon and at Target and Wal-Mart, Best Buy…” Johnson said: “Yet people turn to the Apple store when it's time to buy”.
“People come to the store, and that's because the store offers something people need, which is really help and support and connecting,” he added.
People want these connections, said Johnson, explaining: “These Apple stores are like magnets for people. If you really look at what happens at an Apple store, it's connections happening. It's a genius with a person trying to solve a problem. It's someone getting personal training. It's someone getting their products set up before they leave the store. It's someone learning about something that might change their life.”
The problem is that “very few retail stores have truly navigated this digital future and how the digital and physical worlds come together,” Johnson said. The physical store is “indispensible in a digital world”, he said, adding: Historically stores have been designed to: “Pick something up. They're very transactional. They're not experiential.”
These stores are competing with the internet where you can: “Search [for] anything you want, get it today from your phone and have it delivered to your door.” The only answer is for the store to “offer so much more”.
One such extra offered by the Apple Store is personal setup. Johnson revealed that Apple had noticed “it took eight days for the average person to buy a product to set it up,” despite the fact that Apple products are so easy to be used. He said: “There was an intimidation, as easy as it might be, because most people aren't that tech savvy.”
The Genius Bar concept is something that Johnson is borrowing from Apple: “Buying a pair of jeans is actually quite hard for people. There are a lot of fits, a lot of finishes. We're putting in what's called the Denim Bar with Levis that will launch next week.”
Johnson is also borrowing late CEO Steve Jobs philosophy in his decision making process: “The world's about thinking differently, and I learned that in spades working with Steve. You know, Steve frequently took a contrary perspective, and he stuck to his vision, and that was the strength of it, and we're going to do the same here.”
Johnson went on to reveal some interesting details about the potential that RFID ticketing can bring to retail. “We're going to jump right to the customer, and my goal in 2013, by the end of 2013 is to eliminate the cash route. So you think of a physical store without a cash routing.”
He explained that JC Penney could save “half a billion dollars a year” currently spent on the checkout process. “Well that can be done through technology,” he revealed. “You'll be able to check out anywhere anytime, from anyone including yourself, because we're going to roll out self checkout to our stores next year.”
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