27
Feb 13

Meanwhile, over at Ron Johnson’s place…

It’s been 15 months since Ron Johnson left Apple to become CEO at jcpenney.

If you go by the numbers, things aren’t going all that well. If you go by the vision, it’s a different story entirely.

During the Oscars, jcpenney ran six commercials that lay the framework for the transformation in progress.

(At this point, I must bare all and confess that I was part of the creative team for this work. But don’t let that stop you from blasting away at me if you disagree.)

The “Anthem” commercial above is a 90-second letter to America. Basically, it says that jcpenney knows who you are and what makes you tick, and is devoted to helping make your life a bit better — as it has been for over a hundred years.

This is jcp’s “stake in the ground,” much as Think different was Apple’s stake in the ground when it began its transformation.

The ads that followed put some flesh on the bones, showing how jcp is bringing some cool and unexpected brands into the store.

I’ve been dutifully reading the many expert opinions on Ron’s efforts for the past year, and I understand the pessimism. It’s not easy to revitalize a brand, especially when shopping habits have changed so drastically in recent decades.

But this is exactly Ron’s point. Shopping habits have changed in a big way, and the department store is an old idea. If the concept is to survive, it’s going to have to change — drastically.

The fact is, everything for sale in the Apple Store is available online. So why are Apple Stores mobbed all the time? It’s because those stores offer something that can’t be found online: a place to try things out, people who really know the products, and face-to-face help when you need it. Apple Stores offer an experience.

In the broadest strokes, that’s Ron’s approach to jcp. He gets that you can buy the same goods online (at jcp or elsewhere) without leaving the comfort of your home. So what will it take to get people into the stores? A unique, fun shopping experience.

Ron’s plan is to bring in high-quality brands and set up each one in a “store within a store.” Each store will be staffed by specialists who truly know what they sell. The junky stuff is gone. There will be wide aisles, places for people to relax and connect to the internet, and — you guessed it — “genius bar”-types of counters where you can get help with merchandise, design, food preparation, etc.

Here’s the problem. Every Apple Store ever built has looked fantastic from day one. With jcp, Ron has to revitalize 1,100 existing stores — most of them being far bigger than the biggest Apple Store.

Transforming jcp is an ongoing process that will take another 2-3 years. The changes are going on now, shop by shop, across all jcp stores. But it’ll be a while before you can walk into a jcp store and say “holy cow, this is amazing.”

This brings me to my most important point.

Visionaries are a special breed. They’re the ones who bring true change to this world. Despite that, people don’t just line up to follow their vision. In fact, visionaries are often met with scorn — because what they envision is so unlike the reality of today.

Steve Jobs experienced this when he returned to Apple in 1997. Wasn’t he the guy who got booted from the company in ’85 for running the company into the ground? He was met with even more doubt when he decided to open a chain of retail stores. Retail experts looked at the idea with disdain — yet the Apple Stores went on to make retail history.

To turn a vision into visible change, you must be immune to the criticism. You must do what you believe in your heart to be the right thing. Only when the vision is complete and has proven itself to be a success, do the naysayers quietly go away.

Is Ron Johnson a visionary? He’s proven that with a truly imaginative plan for reinventing jcp. Is his vision one that America will respond to? Well, that’s the big question. And it’s a question that can’t be answered until jcp’s makeover is complete.

So sit tight and enjoy the show. It’s easy to have an opinion, but you might first compare your own experience to Ron’s. He turned Target into what it is today, then conceived and built the chain of Apple Stores. He has a passion for retailing that is equal to Steve Jobs’ love of technology — and a deep understanding of why and how people shop.

Turning around a chain of 1,100 department stores is a task that is almost beyond comprehension. But I’d think long and hard before I bet against Ron Johnson.

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  • Good Call. Reminds me of Del Millar’s comment on Steve’s return to Apple

    “Shortly after Steve Jobs became the CEO of Apple, during the very darkest of Apple’s darkest days, he spoke at his first press conference and was asked this question:

    “How long would it take to turn Apple around?”

    He paused for a couple of seconds and then answered, very simply:
    “We aren’t going to turn Apple around, we’re just going to make the best computers in the world.”

    It was like Babe Ruth pointing to the left field fence.
    It was John Paul Jones declaring that he had not yet begun to fight.
    It was Lindbergh climbing into the sky.
    It was Steve Jobs putting a dent into the Universe.

    It was ingenious, courageous, inspiring, unexpected and it worked. Something palpable in the collective consciousness of the crowd saw the rightness of not betting against Steve Jobs. Anything else he might have said would have been weighed harshly against the thousand technical details involved in the monumental task of making Apple whole; but if Steve Jobs said that Apple would make the best computers in the world, then in all probability that is exactly what would happen. The room was lit with the glowing blue aura of the famed Reality Distortion Field.

    Nowadays, when the Reality Distortion Field of Steve Jobs is mentioned, the term seems laden with an air of disrepute, as if “Reality” were some golden truth and its manipulation was some crime of arrogance and dishonesty that leads others astray. But reality is seldom so pure that it should be treasured like some hallowed article of faith, and Apple’s reality of the moment was dreadful; it hung over the company like a foul blanket that suffocated the spirit of the faithful and hid the future from any light of possibility. Steve’s pronouncement threw off that blanket and it cut through the darkness of a thousand obstacles with a bright, clear goal: To make the best computers in the world. Everything else was detail.”

  • stevesup

    Nice comment. I like to think Apple makes the best for the rest. It’s that creative tension that keeps engineers happy and busy and marketing simple.

  • stevesup

    Yep. Johnson did great work with Apple and before that at Target, when it was still Dayton Hudson.

  • hannahjs

    “Only when the vision is complete and has proven itself to be a success, do the naysayers quietly go away.” But as is their nature, they continue to lie in the weeds, waiting for a stumble.

  • delmiller

    Duane,
    This is Del. Wow. I am totally humbled that you remembered my story from so log ago. You made my day.

  • rcrcr

    Are the revitalizations of any of the 1100 locations complete? If so, how are those locations doing? How has the customer experience been?

  • Neil Weinstock

    The question is whether shareholders and the board will give him enough time, given the current level of suffering….

  • ksegall

    No store is 100% complete. There are up to ten or so shops complete in most of the stores — but you won’t get a true sense of what the stores will feel like until entire floors are redone.

    They do point out that sales are up in the individual shops, so there is a strong indication that when presented in this way, people are buying more.

  • ksegall

    Very true. So far, the board has been very supportive of a 4-year turnaround plan.

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  • You are welcome. Sorry about spelling your name incorrectly. I have the quote posted on our SIMit Library main page with the correct spelling -http://www.simitapps.com/blue.html. Great to see you are still contributing. (It still moves me every time I read it).

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  • bobmonsour

    I would love to see him succeed. It really does come down to the board supporting him and his plan. Given his track record at both Apple and Target, and depending on the backgrounds of the various board members, one would hope that give him what he needs. This is making me curious enough to want to go check out their annual reports and proxy to learn about the board and decide if this might be a really good time to pick up some seemingly very inexpensive JCP stock.

    P.S. Love the 90 second piece!

  • David Ryder

    Ken, the ad is really nice. Quite a departure from the old campaign. I bought JCP when Ron started on faith that he could pull this off. I’m hanging in there but he has a HUGE job ahead of him.

  • qka

    How long did Ron Johnson’s turnaround of Target take? How many stores were involved? To attempt to judge what he is doing at JCP, it would be useful to know the details of how he did on his previous brand overhaul.

  • Dmitri

    “To turn a vision into visible change, you must be immune to the criticism. You must do what you believe in your heart to be the right thing. Only when the vision is complete and has proven itself to be a success, do the naysayers quietly go away.”

    Beautiful words, Ken. And a beautiful ad. I’ve been rooting for Ron Johnson, and will continue to do so.

  • Todd Schnick

    i did NOT see this spot during the Oscars… my wife DVRs thru commercials. but i like it…and cannot wait to see how things unfold. good luck!

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  • jason

    Not sure Ron gets the JCP crowd in the same way he got the Apple and Target crowd, both places without anywhere near as much history. In my small town I heard a man commenting to a clerk in a K-Mart (of all places) that he thought JCP was closing shop. “Just go to the store,” he said, “it’s practically empty.” Someone else might have said it looks chic and modern like an Apple Store, in terms of it’s presentation of products, but this old, long-time JCP shopper only recognized the difference between old and new and that led him to his sad conclusion. It’s anecdotal for sure, but how true for most long-time JCP shoppers?

  • Beautiful ad, Ken!! Brought a tear to my eye.

  • Joseph Steel

    With smart product development and marketing, Target managed to grab an unoccupied niche position in the big-box retail market. Sears was on its way out. Walmart wasn’t the powerhouse it is today, and K-Mart was already positioned as a downmarket brand.

    Apple entered retail with its tail up, and a powerhouse team that included more than Ron Johnson. Behind the team was Jobs — and the Apple store-in-a-store retail history.

    Both were very different situations to what JCP is facing.

    I remember when folks affectionately call it “Pennies”. Those days are long gone though. Time will tell. But then again, as they say in Jamaica… “Time long like rope.”

  • Greg

    Great ad Ken. Loved the way it picked up pace near the end. Structured similar to Stairway to Heaven.

  • static66

    Which to me begs the question:

    Wouldn’t JCP and Ron have been better off to completely setup a couple of flagships first, launch them, feed the press, get some feedback and then start plodding through the rest.

    Why not display the grand vision somewhere in it’s entirety for reference/support?

  • ksegall

    Aha! Great idea. I too thought this would be the smartest way to go. Unfortunately… many things are happening at once and there aren’t yet enough brands participating to fill a whole store. It’s all part of the 2-3 year plan. But—

    The new Home department is coming soon, with some extremely cool brands offering jcp-exclusive merchandise. What I’ve seen I actually want to buy myself :) Home will be an entire floor, and will give customers a feel for what the rest of the store will be like in the future.

  • static66

    Well that makes some sense, I wasn’t thinking about product brand participation.

    What little I have seen of the new concept I liked. But I must say once you have seen the new area, the rest of the store feels old, run down, and neglected. (at least at my nearest JCP)

    Perhaps a couple of small kiosks/adverts (in the stores) showcasing the vision and the plan. I don’t think it hurts to educate the consumer and pre-empt conclusions that may be wrong.

    I love your blog and admire your body of work Ken, keep it up!

  • ksegall

    Hmm, a kiosk or big poster or something with the “artist’s conception” is an interesting idea. Kind of like the new ride coming to Disneyland. Something to think about…

  • jenerositymktg

    I have to say that while I have never been a JC Penney (or jcp now, I guess) customer, I am very excited about what they are doing to revitalize the brand. I actually saw an ad on TV the other day for the Marchesa designer brand partnership that made me stop in my DVR-fast-forwarding tracks. I was so enthralled that I even thought to myself that I would love to check that line out. Perhaps Ron Johnson isn’t trying to appeal to his old customer base but a new one that loves Target but wants different brands, etc. Regardless, I am excited to see how things progress for him and am rooting him on. G-d knows, we need more successful retailers to ensure consumers are always getting the best products at reasonable prices.

  • mikesd

    Well said and that quote can apply to so many things in life.

  • mikesd

    Ken’s description, and the ad, is better than anything I’ve seen about jcp in the past year.

  • ksegall

    Thanks. I think it gets increasingly hard to see the real facts through all the opinions expressed across the internet. Honestly, I’m trying to be objective even though I’m involved in it. I think there’s a lot of potential in jcp thanks to Ron, but unfortunately it can’t happen quickly. People have to look at the positive signs, which requires some effort and understanding at this point. It will be interesting to see how the story unfolds.

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  • Court Kizer

    Here’s the problem. People think JCPenny is a crappy retail store. The ad was great till you claimed you believed this for the last 100 years. What that makes me and everyone else think… is JCPenny is exactly how it used to be, nothing has changed. When I know JCPenny has made good changes. You need to address the fact that JCPenny has shortcomings, and they have been fixed… People love an honest retailer who admits when the did wrong. It’s hard to dislike a company that speaks the truth. The ads tell me nothing about the new JCPenny…

  • ksegall

    When Ron took the job 15 months ago, he was very honest about the state of the company. He admitted that jcp “lost its way” in recent years. It had forgotten some of the founder’s most important values (respect for the customer, no playing games with prices, etc.) and started acting like all the other department stores.

    I can see your point, but I also think you’re drilling down more deeply than most viewers do. It’s just an ad, and the takeaway for most people seems to have been as intended. It was jcp’s way of saying we understand you, and we want to help you look and live better. The ads that followed demonstrate how they will do that, as will many more spots to come.

    I hope I’m not playing the “Think different” comparison too often here, but I do think there’s a parallel. Remember, Apple was in horrible shape, near bankruptcy, when Steve Jobs returned in 1997. He ran the “Think different” campaign right off the bat, as a promise of things to come. A viewer could have reacted to the “Crazy Ones’ commercial just as you reacted to this one. All it said was that Apple believes in the spirit of creativity, and it makes tools for people who are crazy enough to think they can change the world. It didn’t acknowledge the uglier truth — that the company had been mediocre for 12 years before. It simply struck an optimistic tone and set the stage for what was to come.

    That’s what jcp tried to do with this ad. Judging by the industry’s reaction and majority of customer tweets, the message created the good will jcp hoped for. Trust me, jcp understands that this message was only a beginning. Now they must deliver on the promise.

  • John Warford

    Very nice, Ken! I enjoy following what you do.

    I was a dedicated Penney’s shopper for decades but drifted away in recent years. Not because of Penney’s but just other life changes. I become more disappointed with the declining quality and lack of excellence in most retail products with each passing decade. This campaign makes me want to go back to jcpenney and see what is happening there now and I am expecting to find something that is more excellent than the rest of the pack.

  • ksegall

    Well, let’s not get too carried away now :)

    If you haven’t been there for a number of years, you’ll definitely notice some changes. It’s much cleaner now, with less merchandise and some better brands. But as I was saying in this article, there’s still a long way to go. The good news is that there is actually a vision and a plan to turn it into reality. Keep watching and you’ll probably see a good story unfold.

  • Joe Uelk

    Great insight. I really like their new ad campaign. Their last batch of commercials missed the mark.

  • Hm

    Things were always going to get worse before they got better. Hopefully these adverts are the start of the turning point, the “ah ha!” moment when the customers, the staff and the market begins to understand the depth and breadth of the new vision and get on board. By the time it’s really taken off, the older department store rivals will be years behind.

  • Chris Castagnola

    Um, didn’t you also have a hand in the disastrous Ellen spots for “JCP?” The current spots are much better and should have run first. Ron Johnson has been an epic failure. There is no doubting this. The store will be closed within 18 months. He is throwing any thing and everything at the wall to see what sticks. He has been blinded by his own vision. I’ll say this, he will be long gone before JCP—Maybe another 6 months. He sounds like a fool whenever he speaks. He always sounds like the smartest guy in the room. He’s not. And he STILL doesn’t get it. Calling coupons “gifts.” Really? Are people that stupid. Or is he?

  • Paul Revere

    Ken, if I may, what was your exact role for this add? You haven’t digressed on this in the post. I’d like to know how and where you shaped this or these adds :) Nice add btw. These adds we do not have over here filled with real and touching emotion. Over here in Holland many (radio adds included) if not all adds are downplaying seriousness and all is happy happy joy joy. OMG! much like Samsungs tone in adverts.

  • Dr. Horvath

    I don’t know about “a unique, fun shopping experience . . .”. Have you been to the basement store at 901 Ave Of The Americas? I would call it a “ghetto, polyester shopping experience”. I think Mr. Johnson has ran out of time. Renaming the store JCP was a real naive idea. Shades of IHOP. Deposit their check ASAP. Before Ken Hannah’s signature fades . . .

  • JB

    Great ad, made me tear up a little.

  • Dr. Horvath

    It’s ‘ad’ not ‘add’ . . . : )”

  • ksegall

    Yes and no on the Ellen question. There have been a number of Ellen commercials for jcp. I was involved in the spots that debuted on the Oscars last year, not on any since.

    Keep in mind that your opinion is just that — no matter how strongly you express it. Ron and his board have described the turnaround of jcpenney as a 3-4 year operation. They’re just entering year two, and the stores are getting better day by day.

    But I”m sure you’re perfectly qualified to declare “epic failure” before most of the changes are even implemented.

    Does having a plan mean Ron won’t make mistakes? Obviously not. But then Steve jobs wasn’t perfect either. Ron has admitted to his misjudgments and made corrections.

    Thanks for your predictions — but let’s meet back here in a year or so to see how you did.

  • ksegall

    How sad when a 3-4 year plan doesn’t change everything within a year.

  • Chris

    Hi. I’m not sure of this, but I think you said the same thing about meeting back in a year, a year ago, when I criticized the Ellen spots. All we can do is judge by what has been done. And what has been done has been an epic failure. I’ve gone out of my way to stop by one of the new JCP stores. Very nice. And very empty. People are confused and who can blame them? Even RJ (sounds much cooler, just like JCP, don’t you think) is confused. I also remember you saying that Wall Street seemed to like RJ’s vision—the stock went up a bit when RJ unveiled the new concept. Looks like the street has finally caught up to the people—the stock is at or near it’s low and even one of JCP’s biggest investors is trying to dump its shares. Some big banks may be too big to fail, but departments stores aren’t. Penney’s was a great brand. They fell behind and waited too long to act. And when they did, the Board got mesmerized by RJ and, more likely, Apple. As a result they opened the vault for him. Unfortunately, they’ll be closing their doors soon enough. I appreciate this forum, Ken. See you in a year. I might have to eat some crow, but I don’t think so.

  • Joseph Steel

    I don’t think your Apple/JCP comparison is valid. Among other things, you’re leaving out the consumer environment aspect. The way consumer’s viewed tech products back then is not the way people view big box retail now. And let’s not forget, Apple had an insanely loyal following.

    I don’t think the same can be said for JCP today.

    Regarding the Think Different campaign… Its strength wasn’t that it brought in new Mac users. Its strength was that it celebrated the existing loyal user base and gave us a unique brand-positioning foundation from which to champion/evangelize the consumer market. Think Different made being a Mac user hip… again. And it also gave non-users a visible target.

    Thing is, it wasn’t forced — “hip” is in Apple’s DNA (sidenote… that’s part of Apple’s present problem… it’s losing its hip status).

    JCP is trying to be young, hip, celebrity, Ordinary Joe, All(white)-American, family-oriented, urban, rural, day, night, big city, small town, nostalgic, and contemporary all at once. It’s the old advertising fallback position — cover all things, be everything to every one, paint it red, white and blue. Well, except for senior citizens. As usual, they get the shaft.

    Sure, throw enough money up in the air and people will come running. That hasn’t changed.

    But they won’t stick around for long.

    I started using Apple computers back in 1987, and I still use one today. Not big on the iPhone… I use an LG Optimus V and will be changing to a Samsung Note 2 in a few months. I will though, be buying Apple computers for years to come. And for the very same reason I started some 25 years ago. It’s a great product.

    Is JCP a great product?

  • Chris

    I don’t own any JC stock, so take this for what it’s worth (probably not much more than the stock): There’s really not rational reason to hold the stock. I’m all for the contrarian approach to investing but the writing is on the wall—the company is doomed. Johnson is burning thru cash at an unsustainable pace.Apple would be a much better purchase: a great, money-making company suffering a normal pullback. To me, Johnson is tarnishing his image but not nealry as much as he tarnished Penney’s.

  • Yes, please. The Disneyland example is a perfect place to take inspiration from. I’m in love with Ron Johnson’s vision for where jcp needs to go, but when you currently visit a jcp (or at least the one I’ve gone to in Anchorage) you can’t really see much of the vision yet. It’s still a messy place, with mostly the old branding visible, with just a few places where the new branding peeks through. Disorganized, and with a lousy P.A. system that squeals every time an employee tries to use it, it doesn’t YET reflect well on the new jcp. I have faith in Ron Johnson, though, and I hope the board and shareholders can keep their faith in him long enough to weather this storm of bad publicity and financial quarters.

    If the average customer could just be aware of the changes planned, and the overall vision for its future, as Ron showed in his presentation, hopefully people would be more excited to keep visiting to see the changes take effect. A central kiosk and perhaps a good multi-page flyer about the changes coming ahead made available at the kiosk, and sent to all current subscribers could really help out with that.