What's the future of Apple retail with Ron Johnson's departure?

What's the future of Apple retail with Ron Johnson's departure?

Summary: Apple's vice president of retail, Ron Johnson, is leaving for J.C. Penney. How are Apple Stores likely to fare without him?

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TOPICS: Apple
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On Tuesday it was revealed that Ron Johnson, Apple's senior vice president of retail, is taking the reins of department store chain J.C. Penney as CEO. It's a major change for Apple, which has seen Johnson lead the company's retail efforts since the first Apple stores opened a decade ago.

Apple has indicated that it's actively recruiting for a replacement for Johnson.

Johnson's legacy to Apple is impressive - taking the company from 0 to more than 300 retail locations worldwide, with an annual operating profit in the last six months of $1.84 billion - double what Apple retail did a year ago. All told, Apple's retail efforts account for 13 percent of its total revenue.

Under Johnson's stewardship, Apple has reinvented how Apple's products have been marketed to the general public. The typical Apple store is simply a backdrop to showcase the products. Its decoration is elegant but almost austere - hardwood floors and lots of open space, with very little adornment. Even in the highest-profile locations, like Apple's Fifth Avenue store in New York City - the entrance of which is a giant, gleaming glass cube that rises above street level - once you're inside, it's the same simple furniture, brightly lit ceilings and walls, and friendly staff that mark the typical Apple retail experience.

Prior to Apple stores, Macs could be found on the store shelves of some computer and big box electronic retailers - Comp USA, Best Buy and others - and a haphazard network of independently owned and operated Apple-authorized retail stores. It was the sloppy presentation of Apple products in those stores that led Steve Jobs and Apple to the creation of the stores in the first place. The Wall Street Journal offers a peek behind the curtain of how Apple manages its stores and employees in a new article entitled "Secrets From Apple's Genius Bar: Full Loyalty, No Negativity."

So what's likely to happen to Apple retail store efforts in the wake of Johnson's departure?

For the short term, very little is likely to change. Apple retail stores are making money - more money, in fact, than they ever have.

The future of Apple's retail stores will require a decidedly different skill set than the strengths Ron Johnson brought to the table. Prior to his tenure at Apple, Johnson helped reinvent Target from a budget department store struggling to compete with Wal-Mart and K-Mart to a chic alternative to other retailers. Certainly, J.C. Penney is hoping to draw some of that magic with Johnson's arrival, when he joins their board this summer and takes over as President this winter.

During his tenure at Apple, Johnson was an empire-builder, working with Steve Jobs and other key Apple executives and board members to create a retail arm for the company out of whole cloth. Johnson had a unique opportunity. Whoever replaces Johnson needs to take a different tack altogether, and instead of building the empire, growing it and maintaining it.

Much of that will be dependent on the future of Apple's product line. Jobs successfully reinvented Apple itself from a niche personal computer manufacturer to a major player in the consumer electronics business, first with the iPod and then the iPhone, and now Jobs says Apple is at the forefront of what he calls the "Post-PC era" with the iPad.

And as with all high-profile efforts at Apple, whoever replaces Johnson will, of course, need to remember that the buck stops at Jobs' door more than his own.

Topic: Apple

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  • To be realistic, this change is rather technical, considering that whole ..

    ... concept of what Apple's retail stores should be like -- such as integrate, all-inclusive approach, minimalistic designs, lots of glass, et cetera -- is Jobs' visionary (that it why he was asked to consult Disney in this area). The situation is similar to recently announced plans for new giant minimalistic glassy ring-shaped headquarters building, which turned out to be Jobs' idea since early 1980s, when he was considering moving Apple to San Jose (a real estate agency told the story last week). Jobs is not architect, so he hired big names to implement his vision.<br><br>Ron Johnson was hired to implement Jobs' vision for Apple's store, and he has done superb job, but things will hardly change with his departure.<br><br>Interestingly, as always, Jobs' influence on retail stores is not limited only to conceiving general concept; he was very involved in things of various level of detail: for example, making a cube at NYC store was his push (Jobs has a thing for a cube since his NeXT years, as well as since admittedly failed Power Mac Cube from 2000). And if you will search more than 250 patents/application Jobs authored/co-authored, you will find not only UI, computer, design ones, but also staircases and many other little things that pertain to retail stores.
    DDERSSS
    • RE: What's the future of Apple retail with Ron Johnson's departure?

      @DeRSSS The WSJ article I mention in this post references some of Jobs' attention to detail when it comes to the stores, as well.
      flargh
      • Yes; I just wanted to add some details that many readers might not know

        @flargh: I actually more concerned with Jobs' final departure from Apple, which may be soon since his health seem to worsen between March and June (he can not even keep his voice firm now, which shakes as result of extreme fatigue and weakness).<br><br>Lets hope that Jobs successors will have the same level of class and taste to not go into cheap tacky route (as most companies do).<br><br>(Though my best hope is that Jobs would recover and will stay in Apple for another couple of decades -- even if chances are not high.)
        DDERSSS
  • RE: What's the future of Apple retail with Ron Johnson's departure?

    I think it is nothing, because Ron was never visible to clients outside apart from his team that goes out in the field. Seriously, how many of us Americans know about retail heads of rest of the corporations not limited to eletronics gaint stores such as Best Buy, Super marts like Walmart, K-Mart, Target etc. I think those chief's visibility is pretty limited to their teams. I don't say it wouldn't impact the overall sales by any means but it is not that biggie. Ok, if someone like CEO, CFO, CMO leaves that it is big. Even a CIO's replacement doesn't impact that much for sure.
    Ram U
    • RE: What's the future of Apple retail with Ron Johnson's departure?

      @Rama.NET How exactly does Ron Johnson's lack of visibility to customers equate with not having any effect on the retail business? He was certainly visible within Apple, which is where he needed to be to affect change. And he's generally credited with innovations at the Apple Store like the Genius Bar, so he's made his mark.
      flargh
    • Are there still IBM stores? What happened to Computerland?

      I dunno, the odds that a computer manufacturer would grow a chain of in-house retail stores that would outsell Tiffany's on a per-square-foot basis were pretty low. Somebody in that place had the Magic Touch. Maybe it was Jobs, but Jobs is a busy guy. My guess is that Johnson had a lot to do with this very remarkable success.
      Robert Hahn
      • Maybe ... maybe not

        @Robert Hahn Apple already learned that making drastic changes lead to nothing but doom (when they kicked out Jobs and the new guy tried to destroy everything Jobs setup).

        Even if the guy was an integral part on the success of the Apple Store, I doubt many will allow a new person to change what is a very successful system into something radically new (and risky) or a copy cat of what is barely working for everybody else.
        wackoae
      • RE: What's the future of Apple retail with Ron Johnson's departure?

        @Robert Hahn I think a lot of that success is due to marketing's efforts. Sure the stores have to look nice and be accessible, but the big challenges are typical challenges that most retail businesses face. Retail supply chain management is not a new concept and a lot of companies are successful at it.

        Apple's been extremely successful at it, but I don't think it's a unique skill. I think they'll be able to continue to be successful at it for years and years to come.
        snoop0x7b
  • Ron's work is done.

    Johnson would have been critical to the prototype/Store #1,2,3 etc.
    But store #350,400,1000? Not so much.
    Englishmole
  • RE: What's the future of Apple retail with Ron Johnson's departure?

    Apple will continue to have great retail success and continue to enjoy great logistics support for their retail stores. This is a nonstory. Once you establish the infrastructure, it's probably fairly easy to manage. Apple's not the only company to have ever figured out retail success... So I'd imagine a replacement will not be hard to find.
    snoop0x7b