Longer than I thought

It appears that Ron Johnson’s days at the helm of JC Penney may be over. I predicted this last July. Granted, I wasn’t going too far

out on a limb.

Ron Johnson was thought of as a retailing guru at Apple for leading Apple Stores. I think it has become clear that it was the Apple products that were the bigger factor in that success.

By the way, I own several Apple products. Not one did I purchase in an Apple store. In fact, now that I think about, I’ve spent as much time in Apple stores as I did in JC Penney after Johnson took over.

Personal Preference Bias

I’ve read and heard a fair amount from critics of JC Penney’s disastrous everyday-low-price strategy. But, much of it is too simple.

Critics speak of JC Penney’s customers as if they are all the same. I’ve read things like maybe they liked sales prices or JCP has to attract a new customer base to replace the old one.

While JCP sales were down considerably, they were still doing 75% of the volume they did the previous year. That is a huge decline for a retailer, but the sales didn’t go to zero and that says something. Three-fourths of customers didn’t mind the change.

In my experience with consumers and retailing, it is not uncommon for about 25% of sales volumes to come from promotions and coupon offers such as the sales JCP use to run. A fair part of that percentage are folks in whatever product category that are bargain hunters. Another chunk are from folks who are not typical bargain hunters — they may shop on value — but they may just come across a deal too good to pass up. I was recently perusing Kohl’s and saw a griddle for half the price I’ve seen elsewhere. I’m not a typical bargain hunter, but I popped on it.

There’s no reason JCP can’t satisfy value shoppers and bargain hunters alike. Other retailers have figured out how.

Even low-price leaders Walmart has “Rolbacks” in the aisle. Target has a dollar section near the front. Old Navy has clearance racks hidden in the back. Banana Republic has its mall based-locations, carrying higher priced, in-season fashion. But, they too have limited clearance sale space in the back. They also have separate Factory Stores where you don’t get the latest, but you get good stuff at sales prices.

Management at these companies recognize that not everybody is the same and they try to find ways to satisfy varying consumer preferences in creative ways that don’t detract from the experience of others. That’s typical retailing.

In my opinion, that’s the key insight that escapes JCP CEO Ron Johnson — everyone is different.

Johnson was in charge of retailing at Apple. Certainly, many folks rave about the Apple store experience. But most of these ravers have very similar preferences when it comes to electronics — they love Apple!

So, Johnson didn’t have very tall task in delivering a retail experience that satisfied a relatively narrow consumer segment. He made a store for Apple devotees.

Ask yourself this. Does Apple need a store? Not really. Apple products would sell with or without their stores.

Johnson is remaking JCP to satisfy a segment of consumer that is smaller and more narrow — a group that he likely sees himself in — than the group that JCP was satisfying before he arrived, which is not usually a successful strategy.

I call this personal preference bias. Successful managers usually find ways to overcome their own personal preferences and give more weight to the varying preferences of their customers.

It’s an easy mistake to make. Ron Johnson probably thinks he learned from his former boss, Steve Jobs, that designing things to meet your personal preference is good. And, there might be something to that when you are trying to innovate from ground zero.

Kindle Everywhere

There was a homeless dude that camped near my home as a child.  We always saw him walking along the business strip and he often came into the shops and diners while we were there.  He’d chat with the business owners, something would change hands and he’d walkout.

Everybody liked him.  He was always nice and polite and even as a kid I recognized that he would do odd jobs for the business owners in exchange for a few bucks, a cup of coffee or bite to eat. That’s just the way things were.  They were that way for a long time before I was born.

His name was Kendall.  My brother and I would see him and say, “Man, that Kendall is everywhere.”

Back then, I never would have guessed our childhood observation would inspire the title of a blog post.  Nor could I imagine what blogs or computers were.

Back in this post, I wrote that one of the things keeping me from buying a Kindle was that I couldn’t check out library books on it or it didn’t have a Netflix-like subscription plan for checking out books.

I only buy a few of the books that I read.  I didn’t want to have to start buying more just to have something to read on a Kindle.

Not long ago, Amazon.com started offering Kindle library checkouts through a service called Overdrive.  My library hooked up with Overdrive.  I have a Kindle app for my iPhone.  I’ve read portions of a few free Kindle books on my iPod and iPhone, but nothing that has had held my interest of yet.

Until now.

I borrowed (or downloaded) Daniel Hannan‘s The New Road to Serfdom.  It’s holding my interest.  And, since the phone goes just about everywhere I go, so does the Kindle App that is loaded on it and my library checkouts.

Now, I’m finding new snippets of time to read my library books that I could not use to read before because it was too difficult to carry library books everywhere.

For example, this evening while I waited in line at a retailer, I pulled out my iPhone, tapped the Kindle app and read a few screens of my borrowed library book.

And for good measure, here’s a great quote from Hannan’s book that I read while standing in line.  Here, he’s contrasting the Constitutions of the United States and the European Union (p. 44):

Where the one was based on empowering the people and controlling the state, the other was based on empowering the state and controlling the people.

I’m sure you can guess which was which.  Or maybe not.  Who knows?

Anyway, thanks to the folks at Amazon, Apple, Overdrive and my local library and the ever present communications networks (that allowed me to check out a library book and receive it instantaneously and not have to worry about getting it back on time) for helping me improve my life a little bit and read books in places I would not before.

Genius

I know I’m way behind the times, but I recently outsourced my music listening selections to an open source solution, Apple’s Genius. I never could quite find the time to build playlists and shuffle was getting to haphazard.

So far, so good.  It’s been mixing music I don’t listen to much or at all that happens to have found its way onto my iPod with the stuff I listen to more often and I like.

That’s yet another way Apple adds value to its product at no monetary cost for its users.   And, yet another way an open-source solution makes our lives incrementally better.

Now, I think it would be nice if iTunes suggested podcasts in similar fashion.  “Those who like this podcast also like these…”  Perhaps it does already and I just haven’t figured it out.

The Other Seth on the Kindle

Seth Godin has some wonderful ideas about what the Kindle should do to beat back iPad.    But, I have news for Seth.  Even a $49 or free Kindle isn’t going to beat the iPad.

Kindle was an awesome product. But, from what I can tell, the iPad is that much better.  The price is relatively immaterial.  Why have two devices that do about the same thing, but one does it much better?

Kindle may be able to occupy a profitable niche for book-0-philes, but unless it pulls an HTC leap in product development, it’s going to lose to iPad.

Kindle is a sunk cost. My guess (and as always, I could be wrong) is that Amazon would better off tying in with the iPad early before Apple’s iBookstore starts taking a chunk of their business.

I wish both devices would support pdf’s better.