They might not admit it now, but there were plenty of people in retailing rooting for Ron Johnson after he announced JC Penney’s plan to attract new customers with exclusive brands and experiences that wouldn’t need coupons and one-day sales as the primary bait.
And while Johnson’s fatally flawed execution at JC Penney corroborated doubters who felt his mission was doomed from the start, Johnson and his vision for Penney— after much heralded successes at Target and Apple— still comes up when discussions turn to how retailers can compete against Amazon and the e-commerce onslaught.
Identify The Enemy
Johnson, now leading Enjoy.com, the personal tech product e-commerce platform he founded after leaving Penney, recently was asked on CNBC’s Fast Money to opine on border tax proposals and the spate of weak holiday retail financials.
He declared, unsurprisingly, that punitive tariffs could further undermine an already unstable retail landscape. It’s what Johnson said next— that most retailers aren’t taking Amazon as seriously as they should be— that probably raised a few eyebrows.
“Companies need a target; they need an enemy,” Johnson said during the CNBC interview. “Everybody is saying you’ve go to figure out omnichannel; we’ve got to get people to buy online. That’s not the issue. The issue is Amazon.”
Expect an even bigger shockwave to rattle the retail establishment, Johnson continued, when Amazon doubles its revenue in just three year’s time. “I’m not sure people are prepared for that,” Johnson said.
Closing The Deficit
Walmart, at five times Amazon’s net income, may be best equipped among individual retailers to battle Amazon head on, Johnson said, crediting recent Walmart moves. But even if Walmart were to double revenues in three years, he noted, it would be hard-pressed to close the huge revenue deficit against Amazon’s skyrocketing growth.
Johnson, whose Enjoy platform offers consumers a turnkey solution for buying and connecting personal technology products, believes the answer to how retailers can beat Amazon starts with keeping their sights on Amazon. He vaguely suggested a collaboration among retailers could produce the scale needed to counter Amazon, citing the success of some super regional shopping malls as an example.
Change The Game
“What do you do in store to beat Amazon? What do we do with our merchandise to make sure it’s differentiated and preferred? How do we price goods?” Johnson said during the CNBC interview. “I would put Amazon on the wall. I would paint it on the billboards, and I would say, ‘We are going to find a way to beat Amazon,’ because that is what’s going to change the game here.”
Of course, Johnson’s doubters by now will have pointed out how saying that is one thing, and doing it is quite another. And they would be right.
Yet, as improbable as it might seem to successfully execute a sweeping change of vision in today’s unforgiving retail cauldron— just ask Johnson— he again has served up a viewpoint for which many would find it hard not to root.
Go ahead… admit it.