CEO Ron Johnson on revamping JC Penney
JC Penney CEO Ron Johnson announces the new strategy at the launch event at Pier 57 on January 25, 2012 in New York City.
Adriene Hill: If you walk into a JC Penney today, you'll notice something different. They'll be no more special, limited, door buster sales. Instead, the company says it's going to just start with lower prices. Gone too are $29.99 dresses or $19.99 shirts. Instead, they'll be $30, or $20; prices are all in round numbers now.
The pricing strategy is part of a larger plan to remake the brand, being led by new CEO Ron Johnson. He came to Penney's after 15 years at Target, and then a decade at Apple. We've got him with us now from Dallas. Good morning.
Ron Johnson: Good morning, Adriene.
Hill: Now why go this direction, especially when so many of us have been trained to respond, and jump at sales?
Johnson: Most of what we buy everyday is bought at an everyday price. When we go to Starbucks, we buy coffee; we go to the Apple store to buy an iPod -- that's an everyday price activity.
And so our industry -- in the department store -- in competing with itself, has moved to a very promotional strategy. But if you go down to the center of the mall, most of the things are at everyday price. So we think we're just going to where people have preferred to shop, as evidenced by most of the things they buy in their life.
Hill: Now what can you apply from your experience at Apple to JC Penney? What rolls over?
Johnson: I learned a tremendous amount at Apple working with Steve and the Apple teams. When you treat the customer well -- like at Apple, we tried to enrich their lives -- they respond. You know, people can buy Apple products everywhere: at Amazon, at Target, at Wal-Mart, at Best Buy. But when their purchase really counts, they head down to the Apple store, right?
We hope to become America's favorite store in the years ahead by earning their trust in everything we do, from how we price products to how we present our products, and most importantly how we serve them in the stores. So we've learned a lot from Apple, but we'll be carving our own trail.
Hill: What's interesting is the department store that you're describing sounds a lot like the older department stores of the past, that were maybe more full-service, hands-on kind of stores. Is that part of what you have in mind?
Johnson: Yeah, I think it's rooted in the history of what made department stores great. For most of us at my age, we grew up when the department store was King of the Retail Hill. And we all went to department stores to discover what was new.
And if you look at it today, we don't do that. The consumer's moved from the end of the mall to the middle of the mall. We're only about 100 feet down the way, we just got to give her a reason to come back down. So it is -- it's rooted in the heritage of what made the department store great, but we're going to do it in a very modern way.
Hill: Ron Johnson is the CEO of JC Penney. Thanks.
Johnson: Thank you.