{"id":17220,"date":"2026-07-22T16:18:37","date_gmt":"2026-07-22T16:18:37","guid":{"rendered":"https:\/\/dmsretail.com\/RetailNews\/jason-scot-show-episode-ep340-ron-johnson-the-man-who-built-the-apple-store\/"},"modified":"2026-07-22T16:18:37","modified_gmt":"2026-07-22T16:18:37","slug":"jason-scot-show-episode-ep340-ron-johnson-the-man-who-built-the-apple-store","status":"publish","type":"post","link":"https:\/\/dmsretail.com\/RetailNews\/jason-scot-show-episode-ep340-ron-johnson-the-man-who-built-the-apple-store\/","title":{"rendered":"Jason &#038; Scot Show Episode EP340 &#8211; Ron Johnson, the Man Who Built the Apple Store"},"content":{"rendered":"<p> <p><a href=\"https:\/\/dmsretail.com\/online-workshops-list\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-496\" src=\"https:\/\/dmsretail.com\/RetailNews\/wp-content\/uploads\/2022\/05\/RETAIL-ONLINE-TRAINING-728-X-90.png\" alt=\"Retail Online Training\" width=\"729\" height=\"91\" srcset=\"https:\/\/dmsretail.com\/RetailNews\/wp-content\/uploads\/2022\/05\/RETAIL-ONLINE-TRAINING-728-X-90.png 729w, https:\/\/dmsretail.com\/RetailNews\/wp-content\/uploads\/2022\/05\/RETAIL-ONLINE-TRAINING-728-X-90-300x37.png 300w\" sizes=\"auto, (max-width: 729px) 100vw, 729px\" \/><\/a><\/p><br \/>\n<\/p>\n<div>\n<p class=\"wp-block-paragraph\">A weekly podcast with the latest e-commerce news and events. Episode 340 is an interview with Ron Johnson, the man behind the Apple Store.<\/p>\n<p> <span id=\"more-43904\"\/><\/p>\n<p class=\"wp-block-paragraph\"><meta charset=\"utf-8\"\/><strong>Subscribe<\/strong>:<\/p>\n<figure><iframe loading=\"lazy\" style=\"border: none;\" src=\"http:\/\/html5-player.libsyn.com\/embed\/episode\/id\/41940940\/height\/360\/width\/640\/theme\/standard-mini\/autoplay\/no\/autonext\/no\/thumbnail\/yes\/preload\/no\/no_addthis\/no\/direction\/backward\/no-cache\/true\/\" width=\"640\" height=\"360\" scrolling=\"no\" allowfullscreen=\"allowfullscreen\"><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">?<\/span><span style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" data-mce-type=\"bookmark\" class=\"mce_SELRES_start\">?<\/span><span style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" data-mce-type=\"bookmark\" class=\"mce_SELRES_start\">?<\/span><span style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" data-mce-type=\"bookmark\" class=\"mce_SELRES_start\">?<\/span><span data-mce-type=\"bookmark\" style=\"display: inline-block; width: 0px; overflow: hidden; line-height: 0;\" class=\"mce_SELRES_start\">?<\/span><\/iframe><\/figure>\n<p class=\"wp-block-paragraph\">We\u2019re unapologetic fanboys of Apple and great retail experiences on this show, so for Apple\u2019s 50th anniversary \u2014 and the 25th anniversary of the first Apple Store \u2014 we brought on the person who actually created the modern Apple Store concept: Ron Johnson.<\/p>\n<p class=\"wp-block-paragraph\">Ron built his career in 10-year cycles, and each one changed retail. At Target, he dreamed up the first designer collaboration in retail history (Michael Graves) and helped turn a Midwest discounter into a place people bragged about shopping. At Apple, he opened the first stores in 2001 \u2014 when Gateway was folding, Dell was winning, and everyone thought a 5%-market-share computer company had no business signing mall leases. He named the Genius Bar (Steve Jobs told him nobody would buy it), killed the cash register with a mobile checkout built on an iPod Touch, and left in 2012 with a million people a day walking into Apple Stores. Then he took the hardest job in retail \u2014 CEO of JCPenney \u2014 and he\u2019s refreshingly honest here about what went wrong.<\/p>\n<p class=\"wp-block-paragraph\">What we get into:<\/p>\n<p class=\"wp-block-paragraph\">? The Michael Graves deal, and why \u201cdesign\u201d beat \u201cfashion\u201d at Target<\/p>\n<p class=\"wp-block-paragraph\">? Why Steve Jobs hated the idea of mall stores \u2014 and how Ron changed his mind<\/p>\n<p class=\"wp-block-paragraph\">? Where the Genius Bar name came from, and the meaning behind it<\/p>\n<p class=\"wp-block-paragraph\">? Killing the cash wrap: mobile checkout in 2008, self-checkout in 2010<\/p>\n<p class=\"wp-block-paragraph\">? Spending the morning of 9\/11 with Steve Jobs<\/p>\n<p class=\"wp-block-paragraph\">? JCPenney, situational arrogance, and the change-management lesson he owns<\/p>\n<p class=\"wp-block-paragraph\">? Why omnichannel won \u2014 stores didn\u2019t, online didn\u2019t<\/p>\n<p class=\"wp-block-paragraph\">? What agentic commerce and AI actually do to shopping (and Satya Nadella\u2019s \u201ctoken capital\u201d)<\/p>\n<p class=\"wp-block-paragraph\">Ron\u2019s book, Shop Different, comes out September 22nd from HarperCollins. It\u2019s built around the Harvard Business School case study of his career \u2014 Harvard\u2019s most popular first-year case \u2014 and it\u2019s going to be one of the must-reads of the fall for anyone who loves retail. Links to buy it are in the show notes.<\/p>\n<p class=\"wp-block-paragraph\">Join your hosts Jason \u201cRetailgeek\u201d Goldberg, Chief Commerce Strategy Officer at Publicis, and Scot Wingo, CEO of ReFiBuy.AI and Co-Founder of ChannelAdvisor as they discuss the latest news and trends in the world of e-commerce and digital shopper marketing.<\/p>\n<p class=\"wp-block-paragraph\">Episode 340 of the Jason &amp; Scot Show was recorded on Friday, June 19th, 2026<\/p>\n<h2>Transcript<\/h2>\n<p>Jason:<br \/>[0:22] Welcome to the Jason and Scott Show. This is episode 340 being recorded on Friday, June 19th. I\u2019m your host, Jason, Retail Geek Goldberg. And unfortunately, Scott had an unexpected emergency and isn\u2019t able to join us. But we have a very special guest in his place. Regular listeners of the podcast will know we are unapologetic fanboys of Apple and awesome retail experiences on the show, and this year marks the 50th anniversary of Apple. So who better to help us celebrate than the actual creator of the modern Apple store concept, Ron Johnson. Welcome to the Jason Scott Show, Ron Johnson.<\/p>\n<p>Ron:<br \/>[1:02] Hey, it\u2019s great to be here, Jason. Thanks for having me, and it\u2019s a big year for Apple. You know, the 50th year for the start of the company, but it\u2019s also the 25th anniversary of the year we opened the first store. Yeah.<\/p>\n<p>Jason:<br \/>[1:15] Yeah, that\u2019s amazing. That was Tyson\u2019s Corner, right? Was that?<\/p>\n<p>Ron:<br \/>[1:19] Tyson\u2019s Corner. Yeah, Tyson\u2019s Corner and Glendale opened the same day, May 19th, 2001.<\/p>\n<p>Jason:<br \/>[1:26] That is amazing. It kind of dates me because I do remember a world without Apple stores. It\u2019s sad to think I\u2019ve been doing this so long. You, of course, were a very young man when you started that first store. And Ron, I\u2019m super excited because I understand that you have written a book called Shop Different that\u2019s going to release this September, which is coming fast, September 22nd. Why did you decide to write a book? What\u2019s the thesis of the book?<\/p>\n<p>Ron:<br \/>[1:54] Yeah, well, I wasn\u2019t going to write a book, but it turns out there\u2019s this case study that was written at Harvard Business School that\u2019s used by almost every business school. And to this date, it\u2019s Harvard\u2019s, according to the school\u2019s, most popular first year case. And I\u2019ve gone back to the school a couple of times and talked. And it\u2019s just packed with lessons. And that case looks at my career from Target, Apple, and JCPenney and asks the questions, what worked at Target, what worked at Apple, and what happened at JCPenney? And as I thought about it, I said, you know, the way to give back is to really share the inside story of all of those. And after a lot of time, I decided, you know, I\u2019m going to write a book. And I found a great person to help me write it and we\u2019ve been working on it for three years and HarperCollins is publishing it and it comes out September 22nd, this September, And I think it\u2019s a really beautiful book.<\/p>\n<p>Jason:<br \/>[2:51] Well, we are all really excited. Obviously, everyone that is generous enough to listen to this podcast is someone that loves retail. And this is unquestionably going to be one of the must-reads for us this fall. So thank you very much for writing it. We\u2019ll double-click on it a little bit more. But one of the ways we always start the show, and it\u2019s kind of a perfect segue, is kind of understanding the background, of our guests. And so we alluded a little bit to Target. Is that where you started your retail career?<\/p>\n<p>Ron:<br \/>[3:16] Yeah, I did. I grew up in the Twin Cities and went to Stanford Harvard Business School and then decided coming out of business school, I didn\u2019t want to go into investment banking like everyone else. And I had offers to do that. So I want to go into retail. But you got to remember, your listeners will know this. The 80s were the greatest period of retail innovation of any decade in the history of retail. And just like venture capital today is funding ai venture capital is funding retail growth you know 84 is when mickey you know repositioned the gap and that\u2019s when the limited started to open all their stores and that\u2019s when all these big off, mall big box stores started to come out and when the outlet center was invented and on and on and so the 80s were a big time for retail so i said, I\u2019m going to join that parade. And I started at a division of Target called Mervyn\u2019s, which was their most successful strategy at the time. And I started unloading trucks down in Glendale, California.<\/p>\n<p>Jason:<br \/>[4:19] Yeah, I do feel like that was a golden age of retail, although it\u2019s always a golden age. There\u2019s always cool stuff happening. But I\u2019m going to say the vast majority of great people we get into retail, especially back then, were not coming from Stanford and Harvard. So, you were probably a little bit of an outlier with the super fancy degree. So, we\u2019re grateful that you did that. It\u2019s maybe a little more common path today. And I\u2019ve spent a lot of time walking the halls of Target. And one of the things I hear a lot about your tenure there is you were intimately involved in the Michael Graves deal, which I would argue is seminal at Target. Can you tell our listeners a little bit about that?<\/p>\n<p>Ron:<br \/>[4:57] Just a quick, this would be interesting.<\/p>\n<p>Jason:<br \/>[4:59] Yeah.<\/p>\n<p>Ron:<br \/>[5:00] You know, when I started my career, there were 13 regional discounters. You know, Walmart started in Veneville, was doing rural stores, and Target was in the Midwest. And wherever you\u2019re from, there is a regional discounter. Just like there were department stores that were local. And by the 90s, it was pretty clear that only three were going to survive. And that was Walmart and Target. And then Kmart still had some life left at the time. But Target had the fundamental challenge of how do we beat Walmart? Because in the 90s is when Walmart started to open up in suburban areas. And Walmart had a significantly lower cost structure.<\/p>\n<p>Ron:<br \/>[5:37] So Target was known for hip fashion. But the problem is, you know, fashion is you get a good markup. But by the time you mark it down, you don\u2019t make much more than you do on basics. And so I had this idea that Target should come up with a third category, which was design. Design would let you get the markup of fashion. It\u2019s unique product. But design products should be in the assortment for a decade, not a season, like apparel can be. And so we launched a partnership. It was the first retail collaboration, believe it or not, ever. And these are commonplace today. But we went on, got Michael Graves to design home products for Target. That was my idea, my initiative I led with the team. And it just turned out to be fabulous. You know, the 90s had gone through a period of design. It was a decade of design. And it was happening, the Volkswagen Beetle. You know, Johnny and Steve did the iMac in 98 when that launched. You know, on and on and on. It was a decade of design and we caught the wave at Target. And during my time at Target from 90 to 2000, the stock went up 12 times.<\/p>\n<p>Jason:<br \/>[6:45] Yeah. Yeah. Yeah. Yeah. Hopefully you, you got to hang on to some of that equity, but that to me, that, that Michael Graves collab started this, obviously it started collabs across all of retail, but particularly Target, it started this whole surprise and delight thing that, that, uh, Target was.<\/p>\n<p>Ron:<br \/>[7:01] Well, that\u2019s what, you know, Target, you know, they had to get people to, And part of it was, you know, there was a lot of status in the 90s about where you shot. And people would whisper to the friends, oh, I got this at Target.<\/p>\n<p>Jason:<br \/>[7:14] Yeah.<\/p>\n<p>Ron:<br \/>[7:14] But when we did design, it was legitimate. And people started to shout, look what I found. And people would go on these Target runs to see what was new. Because we were really, really exciting merchandise. Some was designed by us. Some was from Europe. You know all these things we were doing and then you know of late unfortunately target lost its way a little bit you know hopefully target target finds its way back um and the stock price has gone up yeah yeah and i think they will, But that was a great period for Target.<\/p>\n<p>Jason:<br \/>[7:50] Yeah.<\/p>\n<p>Ron:<br \/>[7:51] And I love being a part of it.<\/p>\n<p>Jason:<br \/>[7:53] Yeah. They did have a good quarter last quarter. So we\u2019re hoping that\u2019s the beginning of a turnaround for them. I think that\u2019s funny. It used to be that you were kind of quiet about your patronage at Target. But during that era, it became Target. And I think of you and Michael Francis as really kind of making it cool and hip to shop at Target.<\/p>\n<p>Ron:<br \/>[8:14] Michael did. Target had great marketing. You know, there\u2019s a guy, John Pellegrin, who did an amazing job and Michael was at the department stores and he came to Target and did a fabulous job building out the Target bullseye, that it became one of the most recognized symbols, you know, in business, not just in retail.<\/p>\n<p>Jason:<br \/>[8:37] Yeah, it\u2019s this whole story is going to come full circle because he\u2019s at the gap now. Um so so what what i\u2019m curious and i honestly don\u2019t know the answer to this is how how did you go from target to apple were you recruited were you looking for your next challenge interesting.<\/p>\n<p>Ron:<br \/>[8:54] I got a call one day from a recruiter and he said ron remember in 1991 he said you were 20 How old was I? I was in my late 20s. And he said, you know, there\u2019s a guy named Mickey Drexler who wants to open up a new concept called Old Navy. Would you like to talk to him about running it? And I said no, because I was early on in my career at Target and wasn\u2019t ready to move. And he said, you know, you turn that down. Look at how Old Navy\u2019s done. I\u2019ve got another one for you. And he said, Steve Jobs wants to open stores at Apple. Yeah. He asked me to look for who\u2019s that guy doing all the design work at Target because Steve loved design. And so I decided to go out and meet Steve and I met him. We interviewed for three hours the first night and I walked away saying, I have to work for this guy. You know, it was one of those moments and Apple was struggling. You know, it wasn\u2019t doing well. Target was on fire. People couldn\u2019t understand why I would do that. And then a lot of my friends said this was 2000. I said, Ron, the dot-com boom is what\u2019s happening in retail. Don\u2019t go to Apple. Go to one of the dot-coms. Start a dot-com company. I said, no, no, I want to go to Apple. I believe in physical retail, and I believe it\u2019s a great brand, and if we do the stores right, it can really make a difference.<\/p>\n<p>Jason:<br \/>[10:16] Yeah.<\/p>\n<p>Ron:<br \/>[10:16] So I joined Apple.<\/p>\n<p>Jason:<br \/>[10:18] That\u2019s amazing. And I do think, in fairness, in hindsight, that seems like a no-brainer decision, but people have to remember that at that point, It was not clear that Apple was going to be the runaway success that they\u2019d become. And it for sure was not clear that manufacturers should own their own retail stores. Like there was.<\/p>\n<p>Ron:<br \/>[10:36] Well, no one thought that was a good idea. Well, remember back in 2000, the PC had 95% share. And who was the big PC one? Dell.<\/p>\n<p>Jason:<br \/>[10:44] Yeah. Direct to consumer online.<\/p>\n<p>Ron:<br \/>[10:45] They had built out online shopping starting in 94 or so. And they were just killing it.<\/p>\n<p>Jason:<br \/>[10:50] Yeah.<\/p>\n<p>Ron:<br \/>[10:51] But the reality is, was selling mainly to business, not to consumers.<\/p>\n<p>Jason:<br \/>[10:54] Yeah.<\/p>\n<p>Ron:<br \/>[10:54] But then Gateway had gotten up to 300 plus stores. And when we\u2019re going to open the Apple stores, they were folding.<\/p>\n<p>Jason:<br \/>[11:01] Yeah.<\/p>\n<p>Ron:<br \/>[11:02] You know, they closed down the year we opened our stores. So people are going, what\u2019s Apple doing? They can\u2019t make money in stores. Dell\u2019s winning. Apple\u2019s got 5% market share. And they\u2019re going to put stores in malls, expensive real estate in those big stores. These guys are crazy.<\/p>\n<p>Jason:<br \/>[11:19] Yeah. Yeah. So I can imagine some people were questioning your career choices at the moment.<\/p>\n<p>Ron:<br \/>[11:25] And then your choices and my business strategy. Yeah, mostly it wasn\u2019t. It wasn\u2019t just that Apple was going to open stores. It was that we weren\u2019t going to test it. We were going to open them and we\u2019re going to do everything different.<\/p>\n<p>Jason:<br \/>[11:39] Yeah. And. The I I\u2019m trying to put myself in your shoes and I literally can\u2019t do it. But like you\u2019d both to work with someone like Steve would be like so exciting and such a privilege. But it also would be, quite frankly, terrifying because he\u2019s he\u2019s famously fast, sharp and not not very tolerant of people that that can\u2019t keep up.<\/p>\n<p>Ron:<br \/>[12:02] That\u2019s true. But, you know, that\u2019s one of the reasons I wrote the book. And one of the things I\u2019m delighted with is I was able to portray the Steve I knew and the Steve I knew would be the same kind of person Johnny Ive knew and Tim Cook worked with. You know, Steve was actually a great person to work with. No one inspired you more, taught you more, helped you more. And if you were one of his close, you know, I was on the executive team. He was a great leader. He delegated better than anybody I\u2019d ever worked with. High standards you know and you know he it could be tough sometimes yeah but that\u2019s what you want you want to work with people who are smarter than you who stretch you who challenge you if you don\u2019t you know i think that\u2019s a big issue.<\/p>\n<p>Jason:<br \/>[12:49] No for sure i i\u2019m curious how like how did that work like did was he super involved did you have to build the concept store and did he get did he get involved in approving it like did you.<\/p>\n<p>Ron:<br \/>[12:59] Have to he was very involved he he was involved in the things he loved, so he cared about design so he got involved with the development of the initial store, and from then on he kind of helped with some of the big like the fifth avenue store the all glass cube yeah you know but after that he just delegated he didn\u2019t get involved with the culture the people who i hired, it was really his input was in the design of the store And, you know, we had a lot of great conversations early on about conceptually how we are going to compete. And those were really good conversations. Like, he hated the idea of putting stores in malls. You know, but I said, Steve, your goal is to reach the 95% who don\u2019t use a Mac. They\u2019re not going to get in a car and drive 10 miles to a store. You might get them to go 10 feet out of their way. You know, and Steve, once he understood that, he said, okay, we\u2019ll be in malls.<\/p>\n<p>Jason:<br \/>[13:57] Awesome.<\/p>\n<p>Ron:<br \/>[13:58] So, you know, and.<\/p>\n<p>Jason:<br \/>[13:59] Yeah. So you were able to convince him. He was open-minded. Yeah.<\/p>\n<p>Ron:<br \/>[14:03] Steve is extremely open-minded. You know, his strength is his ability to innovate through conversation. You know, some people call it, David White would call it conversational commerce. You know, but it\u2019s really a great conversation is when no one has an agenda, they want the best idea to win. And you\u2019re both absolutely present. You\u2019re debating an issue. You\u2019re bringing your own personal geography to it and the best idea wins and steve never never never did something because it was his idea, it was only if he thought it was best but he was very open to input and there are many examples of that throughout the book you know.<\/p>\n<p>Jason:<br \/>[14:50] That\u2019s that\u2019s gratifying to hear i i am curious by the time you left apple stores were were universally regarded it as a wild success. And there are all these crazy stats about the revenue per square foot being, higher than Tiffany\u2019s. And it was at the top of the ecosystem. And they say imitation is the most sincere form of flattery. Everybody, of course, was inspiring their new work based on the success of that store. I\u2019m kind of curious, though, from you, from the horse\u2019s mouth, what do you think about and what are you most proud about in that Apple concept? What do you think were\u2026 There was a lot of innovation in there, but what was the secret sauce that really caused consumers to resonate.<\/p>\n<p>Ron:<br \/>[15:30] The secret sauce is we created a place that people wanted to belong. You know, the store, it was, and it was interesting because it was the time of the internet, when the internet was all about a transaction. And if a store was going to survive the internet, you had to build an experience. And so part of the benefit of the Apple store coming out at the time when the internet was just taking off is they were our competitor. And we had to do something that they could never do. you know and so ultimately what i\u2019m most proud of i think is you know i was in the apple store in milan two days ago a beautiful store and the experience was fantastic, and the store was essentially the same layout same vision that we established 25 years ago yeah with all the changes and that that\u2019s hard to do in retail to keep something, vibrant and working but i think the strength of the apple store has always been its people, you know they\u2019re not on commission they love people they love serving people, they\u2019re not in a hurry you know they take time to welcome you to the store to get to know you to find out what you\u2019re trying to do and then they present a solution that\u2019s exactly what you need not more than you need that.<\/p>\n<p>Ron:<br \/>[16:42] You can take home today you know and then the store\u2019s got great support, after you buy whether you want to learn more through classes and theaters or you want to get help like in a genius bar yeah but it just it turned out it was just a well-conceived store, that has stood the test of time and when i left you know i think there were 370 stores open, we had another 50 in works today apple has 530 stores so in our first 12 years we got about 80 of the footprint done globally and you know in the u.s you know there\u2019s Apple stores within, you know, seven, a 10 minute drive today of 90% of the population.<\/p>\n<p>Jason:<br \/>[17:26] Yeah. So it\u2019s, it\u2019s, but I have to digress for one second. When you walk into Milan, do, does anyone know who you are? Do people recognize you?<\/p>\n<p>Ron:<br \/>[17:34] They didn\u2019t this time.<\/p>\n<p>Jason:<br \/>[17:35] Okay.<\/p>\n<p>Ron:<br \/>[17:35] But it\u2019s interesting. Most of the stores I visit, especially in Europe, people recognize me.<\/p>\n<p>Jason:<br \/>[17:42] Yeah.<\/p>\n<p>Ron:<br \/>[17:42] Because, you know, they stay around a long time. You know, like I was in the niece store three weeks ago and I was having this girl. I said, you seem so familiar. She goes, Mr. Johnson, I helped you five years ago. I had forgotten. But she didn\u2019t remember.<\/p>\n<p>Jason:<br \/>[17:56] That\u2019s amazing.<\/p>\n<p>Ron:<br \/>[17:56] She\u2019s worked at that store since it opened 16 years ago.<\/p>\n<p>Jason:<br \/>[17:59] Yeah. And in some ways, I feel like that, I know it\u2019s not directly analogous, but the evolution of consumer electronics in the U.S., like, you know, there was a time when there was this big battle between Circuit City and Best Buy. And Circuit City was the commission-based model. Best Buy was not. And obviously, Best Buy won because they\u2019re here and Circuit City isn\u2019t. But Best Buy was very low touch, right? And, you know, there was huge turnover. And so then the Apple stores emerged and, they\u2019re non-commissioned but much higher touch. And you know they certainly you you invested a lot more in you.<\/p>\n<p>Ron:<br \/>[18:32] Know best buy under Herbert Jolie Mr. Jolie did a great job oh yeah he had a book what I found kind of funny is, our two-word goal for the apple store for service was to enrich lives, and in 2012 or 13 best buy said our goal is to enrich lives yeah but they started to put in store within a store throughout the store You know, Apple was probably the first one, and they have many of those, and those are sometimes staffed by partners. You know, so it\u2019s become a great place to buy consumer electronics.<\/p>\n<p>Jason:<br \/>[19:05] Yeah.<\/p>\n<p>Ron:<br \/>[19:06] And I\u2019m a great admirer of Best Buy products. They\u2019ve survived. It\u2019s a difficult category, but they\u2019ve done a great job.<\/p>\n<p>Jason:<br \/>[19:13] Yeah, no, I totally agree. And I am also a Best Buy alum. So I appreciate that. It is funny, though. It was almost a self-fulfilling prophecy. Part of the reason that we had to open shopping shops at Best Buy is we used to have this great traffic driver in the middle of the store called Music. And people used to buy music on these plastic circles. And Apple may have had a role and making those plastic circles a little less popular. And so we had to find alternative uses for some of that excess footprint in the middle of the store. Oh, that\u2019s so funny. That\u2019s true. Yeah. You know, my moniker is Retail Geek, and I was accidentally involved in Best Buy\u2019s acquisition of Geek Squad, which was founded by an entrepreneur in the Twin Cities.<\/p>\n<p>Ron:<br \/>[19:56] Yeah, that was like 1996.<\/p>\n<p>Jason:<br \/>[19:59] Yeah, Robert Stevens. History. Yeah.<\/p>\n<p>Ron:<br \/>[20:02] I knew Robert.<\/p>\n<p>Jason:<br \/>[20:02] Yeah, Robert.<\/p>\n<p>Ron:<br \/>[20:03] And then he moved to the Bay Area.<\/p>\n<p>Jason:<br \/>[20:05] Yeah.<\/p>\n<p>Ron:<br \/>[20:05] After later, after he sold Geek Squad to Best Buy. Yeah.<\/p>\n<p>Jason:<br \/>[20:10] He would say after after Geek Squad acquired Best Buy is how he would he would put it.<\/p>\n<p>Ron:<br \/>[20:14] He would say, no, it\u2019s kind of funny because when I presented the idea of the genius part of Steve, I first talked about we\u2019re going to serve people through a bar.<\/p>\n<p>Jason:<br \/>[20:21] Yeah.<\/p>\n<p>Ron:<br \/>[20:21] We\u2019re going to dispense advice just like a bartender dispenses alcohol. He goes, I like that. He goes, what are you going to call it? I said, I\u2019ll come up with the name. I don\u2019t have it yet. So I called him up a week later and said, genius bar. He goes ron you can\u2019t call it that and he said because the people who are going to be behind the bar, they don\u2019t know how to talk to people if you want to call it the geek bar you can well he wouldn\u2019t have known about the geek squad steve wasn\u2019t in touch with that sure but that you know it\u2019s interesting that that was the name that you know, the original founders of the geek squad chose because that\u2019s kind of who technologists were back then they were these people that love technology kind of geeks and they spend all their time over themselves and yeah we\u2019re great with customers but they know how to fix products yeah uh, but we we changed flipped that on said and called it the, probably the most you know relevant part of the store to most people.<\/p>\n<p>Jason:<br \/>[21:16] I would i i certainly would agree it\u2019s a lot of pressure though to get a title like genius in your title seems geek seems a lot lower pressure i will.<\/p>\n<p>Ron:<br \/>[21:24] Say can i explain to you why we did that yeah please you know the key the key, you know i really think people want to have meaning in their life, and when we were opening our first store i said think of the i\u2019m from minneapolis you know we\u2019re gonna have our first store at the Mall of America in Minneapolis, we\u2019re going to hire three geniuses, maybe it\u2019s four. You have to be, you\u2019re going to be credit for being the smartest Apple person, in Minneapolis and St. Paul. Well, if you love technology, what a great job. You are the smartest Apple person in the state of Minnesota. You know, and that gave people meaning and they\u2019d stand behind that bar and they had to answer any question on the planet. And they were proud. that they could do that and they were proud that they were a genius at a genius bar yeah and that\u2019s just part of conveying meaning and that\u2019s really important to people who work in retail.<\/p>\n<p>Jason:<br \/>[22:19] That that seems totally fair and in that same era robert and i were we\u2019re desperately telling everyone that geek is not a pejorative so that was kind of our right you know still a negative thing back then so i do want to touch on two things that are super interesting to me about the genius bar i i worked for a lot of retailers that opened stores and were inspired by by apple, And my hypothesis is they always got it wrong. Like, of course, every attribute of the store contributes to the experience and the success. I\u2019m not trying to say there\u2019s one thing that makes you success and one that not. But the things that people always noticed and tried to emulate are like negative space, wooden tables, better lighting, right? And those are all important things. I\u2019m not saying they\u2019re not. But when I look at Apple stores and say, hey, here\u2019s why they stood out. Here\u2019s why they won the hearts and minds of their consumers. Steve Jobs might disagree with me. It wasn\u2019t as much about those design elements as it was the service model that you had. You had more people per square foot, that you had those people well-trained, that you had the service in the Genius Bar. And so I always felt like all these emulators were emulating kind of the wrong parts of your plan.<\/p>\n<p>Ron:<br \/>[23:28] You\u2019re exactly right. You know, when I left Apple in 2012, we had a million visitors a day to our stores. I think a million people a day came to the Apple store and they came for, like we said, there were a lot of reasons to come. And it wasn\u2019t about buying a product. It was so many other things. And but, you know, the reality is most people, what they call innovation is really improvement. Because when they do innovation, they go look at what someone else did, and they apply it to their store or their situation. And the customer sees that as a copy. It\u2019s good to do, but you never get it right. You know, Microsoft tried to open retail stores. And they made the obvious, so many mistakes, it\u2019s hard to, it\u2019s not laughable, it\u2019s sad. But you know they\u2019re the big gorilla and they go open a store right next to an apple store that\u2019s the same size so basically legitimized apple but they didn\u2019t understand what made the apple store great, you know and it just felt different and they never even got traffic in the stores you know you\u2019d go buy an apple store with people and this company serving 90 market share had nobody in its yours.<\/p>\n<p>Jason:<br \/>[24:49] Yeah. Yes.<\/p>\n<p>Ron:<br \/>[24:51] Yeah.<\/p>\n<p>Jason:<br \/>[24:51] I remember well. And they, I mean, they, they literally followed your footprint. I think the first Microsoft store was also in Tyson\u2019s corner. So that, yeah, yeah. Funny, unsuccessful part. But when I look at that store, one of the things that I think someone may have had an idea before, but it\u2019d never been executed before. One of the things that was really interesting to me was, was mobile checkout that we went away from, from a cash register and know line of people checking out to sort of checking out in situ um was that like an accident or was that.<\/p>\n<p>Ron:<br \/>[25:24] A very intentional choice yeah it\u2019s a great part of the book i think we tell about all those innovations but you know it was interesting because in 1984 when i was at unloading trucks, someone at headquarters said i feel sorry for that harvard mba guy down there unloading trucks, why don\u2019t we have do a little write-up on what should we do with the cash wrap, and i spent about three months studying the cash rep. And I just concluded, everyone hates, everyone loves to shop. Nobody likes to check out. You know, it\u2019s just a really terrible experience no matter what you do. And so my dream was always to get rid of the cash wrap. And in 2008, we did. And what was the amazing thing is we had technology. We basically turned an iPod Touch into a mobile cash wrap. We gave one to every employee. And as the stores got really busy, you know, I remember the iPad launched. We had stores with 300 employees on the phone. Each was a mobile cash wrap.<\/p>\n<p>Jason:<br \/>[26:22] Yeah, which scales a lot better than some super expensive NCR point of sale terminal.<\/p>\n<p>Ron:<br \/>[26:27] We had no constraints.<\/p>\n<p>Jason:<br \/>[26:28] Yeah.<\/p>\n<p>Ron:<br \/>[26:29] We were selling 300 iPads a minute.<\/p>\n<p>Jason:<br \/>[26:33] That\u2019s crazy.<\/p>\n<p>Ron:<br \/>[26:34] Can you imagine that?<\/p>\n<p>Jason:<br \/>[26:34] No, I cannot.<\/p>\n<p>Ron:<br \/>[26:35] And other retail stores would have lines at checkout.<\/p>\n<p>Jason:<br \/>[26:39] Yeah.<\/p>\n<p>Ron:<br \/>[26:39] We had lines outside the stores to get your hands on the product to try it. We had no operational hiccups, you know?<\/p>\n<p>Jason:<br \/>[26:45] Yeah, that\u2019s amazing.<\/p>\n<p>Ron:<br \/>[26:47] No, I was really proud of that.<\/p>\n<p>Jason:<br \/>[26:48] Yeah. And then I feel like eventually you even expanded that to self-checkout. So your app was also one of the first. Yeah.<\/p>\n<p>Ron:<br \/>[26:55] 2010, we just said, you know, we got this app. Let\u2019s create an app, put it in the Apple\u2019s. Just let someone just scam the barcode and check out themselves.<\/p>\n<p>Jason:<br \/>[27:04] Yeah.<\/p>\n<p>Ron:<br \/>[27:05] Not a lot of people did it. It\u2019s like most new technologies. But in 2010, you could do that. And I don\u2019t think mobile checkout really became a thing until the 2018, 19, 20 period. And now you\u2019ve got people like Inditex and Uniqlo have the most amazing checkout experience I\u2019ve ever seen.<\/p>\n<p>Jason:<br \/>[27:24] Yeah.<\/p>\n<p>Ron:<br \/>[27:25] And the world\u2019s changing.<\/p>\n<p>Jason:<br \/>[27:27] No, no, no. It\u2019s certainly having a moment now. I do a lot of work with our friends in Bentonville, and it\u2019s one of the most beloved experiences at Sam\u2019s Club is that scan and go. And yeah, in my mind, it all started in those Apple stores. I remember when you first launched that, I shopped one of your New York stores, the one in the train station. Is that Union\u2019s?<\/p>\n<p>Ron:<br \/>[27:48] Yeah, Grand Central. Grand Central.<\/p>\n<p>Jason:<br \/>[27:50] Grand Central store. And it was such a surreal experience because already you made that store feel like part of the environment. It didn\u2019t feel like you were necessarily like walking over the threshold of a store, right? So you\u2019re kind of, you\u2019re browsing, you see something you want, you scan it with your phone and you walk out. and I literally felt like I was shoplifting when I left with my first Scantico purchase.<\/p>\n<p>Ron:<br \/>[28:10] Isn\u2019t that great? Yeah, I remember. Well, you know, that was a real fun store because, it turned out to be just a hugely successful store because so many people in New York, all the people from Greenwich and up north are going through that train station every day and they\u2019d stop in to get help at the Genius Bar. They\u2019d buy their Christmas gifts on the way home. It was a great store. But you know what? It was the lowest cost store we ever built because you didn\u2019t have to touch the walls. You couldn\u2019t touch the floor. We just put in our little wood tables and a little lighting, and we were good to go.<\/p>\n<p>Jason:<br \/>[28:40] Yeah, it\u2019s nearly a pop-up store.<\/p>\n<p>Ron:<br \/>[28:43] Yeah, it\u2019s a beautiful store, though. It\u2019s a beautiful building, beautiful space.<\/p>\n<p>Jason:<br \/>[28:47] Yeah, yeah. No, that was super fun. And then one other thing, and in my mind, this might have evolved a little more over time, but like\u2026 So one interesting thing when you do mobile checkout versus a traditional cash wrap is you kind of move from this adversarial thing where the customer is on one side of a desk and the clerk is on the other side and they\u2019re taking money from each other. They\u2019re negotiating. It doesn\u2019t feel like a collaborative win-win. You move to the shoulder-to-shoulder experience where two people are working together to solve a problem, which I love. And I feel like Genius Bar evolved to that over time as well. There may have been a time when people sat across from each other in the Genius Bar, but over time, the Genius Bar moved to those tables, too.<\/p>\n<p>Ron:<br \/>[29:29] They\u2019re bringing back. Some of their newer stores now, they\u2019re bringing back a bar.<\/p>\n<p>Jason:<br \/>[29:34] Okay.<\/p>\n<p>Ron:<br \/>[29:36] And I think what happened is, and I\u2019ve talked to them about it, people like to walk in the store and know what\u2019s going on. And the challenge when you have a lot of tables with people sitting side by side, what are they doing? Where do I go? You know, because there\u2019s setup at those tables, there\u2019s classes at those tables, there\u2019s genius bar at those tables. It\u2019s very flexible, but you lose a little bit of the understanding of what\u2019s being offered here, you know. And so things evolve.<\/p>\n<p>Jason:<br \/>[30:07] Yeah. And so speaking of evolve, I am curious, and I\u2019m not trying to throw shade on anyone, but like when you walk in an Apple store today, is there anything that\u2019s changed that you go, oh, man, I wish we didn\u2019t cave on that? Is there anything that bothers you at all in the current Apple experience?<\/p>\n<p>Ron:<br \/>[30:23] No, there\u2019s one thing we did, though, that I absolutely love that they eliminated is, you know\u2026 We wanted to find a way to create perfect placement where every product was exactly where it should be every time. And when the iPad came out, we created these beautiful acrylic displays. You might remember these with an iPad.<\/p>\n<p>Jason:<br \/>[30:46] Yeah.<\/p>\n<p>Ron:<br \/>[30:46] There was a point of sale device and the products like the phones would be right attached to that. And we powered the phones through the acrylic display and we just updated the software, but we could tell stories. So if the store is busy, you could read about it right there. It\u2019s like going online and learning. You could check all the configurations all the price points you could and so we had really reinvented what i\u2019d call point of sale how you communicate to a customer shopping on their own and for some reason apple decided not to continue up, you know and i and i think it then it requires you when you\u2019re in the store on your own if a person\u2019s not there, what do you do now with some products like a computer they put it on the screen, but with the phone it\u2019s too small you know that was an interesting one to me.<\/p>\n<p>Jason:<br \/>[31:32] Yeah. Yeah. That is, I do, I think that in my mind, and this maybe only a geek would notice this, another innovation of the store, like, you know, traditionally you put product on the shelf and then you put merchandising around the product to try to tell the story. And it\u2019s all static merchandising. And so you can\u2019t tell a super rich story. I would actually argue Bose was doing this for quite a while, even before there were Apple stores, but in the Apple stores, every device in that store had software on it to tell a story about that device like like you kind of built the custom the shopping customer experience into the device which is one of the nice advantages when you\u2019re the manufacturer of the device, exactly and and so i do i think that no you\u2019re in there\u2019s a that\u2019s.<\/p>\n<p>Ron:<br \/>[32:12] A big part of the store because we delayed our first store six months.<\/p>\n<p>Jason:<br \/>[32:16] Because we.<\/p>\n<p>Ron:<br \/>[32:17] Went from the whole store was organized like a, And then it\u2019s a great story, but Steve decided he\u2019s going to reposition the Mac as the digital hub. And that means the Mac is about not about the computer. It\u2019s about the software that allows a digital device like a camera to become something you can create with, you know. And so then all the software got put on the computers. And that\u2019s what people love. They get on those computers to learn how to do something they\u2019d never done before.<\/p>\n<p>Jason:<br \/>[32:48] Yeah.<\/p>\n<p>Ron:<br \/>[32:49] You know, and the stores came out when we were still in an analog world, you know, in 2001, 90% of people owned analog cameras.<\/p>\n<p>Jason:<br \/>[32:58] Oh, yeah.<\/p>\n<p>Ron:<br \/>[32:58] They were still good. They were walking to the grocery store to get their phone to go.<\/p>\n<p>Jason:<br \/>[33:02] Yeah, it\u2019s a little known fact, but in the early days, a lot of people walked into that Apple store to get Internet access. Like it was like the public library. They would sit on the devices and use the device for free and have Internet access. And I think there\u2019s some some really popular social creators that actually, did all their content in the stores.<\/p>\n<p>Ron:<br \/>[33:20] No, you\u2019re exactly right. No, even when Facebook came out, you know, kids would come in there and that was the way they could do their Facebook thing because they didn\u2019t have couldn\u2019t afford a phone and they come use the Apple computers. But no, we had someone write a book for 30 days. He came into the Soho store. I don\u2019t know how she wrote a book in 30 days. It took me three years.<\/p>\n<p>Jason:<br \/>[33:40] Yeah.<\/p>\n<p>Ron:<br \/>[33:40] But now it\u2019s 10 minutes with a robot.<\/p>\n<p>Jason:<br \/>[33:43] But that\u2019s it. Yeah.<\/p>\n<p>Ron:<br \/>[33:44] She just wrote a novel in the store and we let her do it.<\/p>\n<p>Jason:<br \/>[33:47] That\u2019s amazing.<\/p>\n<p>Ron:<br \/>[33:47] Well, see, the thing is, I always said good things happen when people come to the store. And people would walk by the mall. And the truth is, Apple was a free internet cafe. Yeah. In 2001, 2002, no one was buying Macs. No one understood why we were learning to sell them, et cetera, how to create an experience that we get someone to buy. But the stores were packed with people on their computers.<\/p>\n<p>Jason:<br \/>[34:09] Yeah.<\/p>\n<p>Ron:<br \/>[34:09] And they thought the Mac was so fast, and they didn\u2019t realize it was just high-speed internet.<\/p>\n<p>Jason:<br \/>[34:13] Yeah. That\u2019s amazing.<\/p>\n<p>Ron:<br \/>[34:15] But it\u2019s interesting.<\/p>\n<p>Jason:<br \/>[34:16] Yeah. You know, you referenced 2001. I feel like you and I both had some novel experiences around, you know, the unfortunate event that year, which was 9-11. On 9-11, I was in a conference room in Minneapolis. Jeff Bezos as Target was signing a contract to outsource e-commerce to Amazon, which would end up being an ill-fated decision. We were all stranded in Minneapolis with Jeff. He found better accommodations than I did for a number of days. I understand you have a special memory of 9-11 as well.<\/p>\n<p>Ron:<br \/>[34:55] Yeah the same it\u2019s just that was a really tragic day but, I was up early, as I always got up early, and I got an email about 7 o\u2019clock from Steve. And it said, in light of today\u2019s events, you know, you\u2019re welcome to stay at home. And then he followed up with a note to me. He said, Ron, I know we have a meeting with your team at 9 o\u2019clock at the warehouse. We\u2019re designing our store. He says, I personally would love to come in and be with people. I said, I\u2019ll be there, too. dude but i remember telling my wife said karen what happened today and we turned on the tv and we saw all the images of the tower yeah and so i spent that day with that morning for three four hours with steve, and it was a day to reflect it was eerie i mean you know cupertino\u2019s right where san jose airport all the planes are coming you\u2019re driving there\u2019s no planes in the sky, it\u2019s quiet nobody\u2019s on the roads, nobody knew what was happening that tragic day oh my gosh it was also, it was also you know it\u2019s interesting to think back, because that was the birth of e-commerce and everyone had to figure out what to do but target didn\u2019t think they had the skills to build their own site so they literally farmed it out to amazon till 2008 yeah they you know and yeah.<\/p>\n<p>Jason:<br \/>[36:16] They were not alone. It was, you know, Borders and Toys R Us and Dick\u2019s Sporting Goods and lots of, but yeah, I was both involved reluctantly in outsourcing it. And then I was involved in bringing it back in-house a little later. So it worked out.<\/p>\n<p>Ron:<br \/>[36:30] You know, I thought I had the most fun job in retail. I think you had it. You were doing all these cool things.<\/p>\n<p>Jason:<br \/>[36:34] No, no, no. You and I were in similar places. You were just wildly more successful in each one of those places. And now I know the secret. It\u2019s because you get up early and I sleep in. I feel like that\u2019s the path not traveled for me. I do want to do a hard pivot, though, because there\u2019s a chapter of your career everyone\u2019s always super interested in. It\u2019s a whole other discussion point is at the peak of Apple\u2019s greatness. You you decided to leave Apple and take on a new challenge.<\/p>\n<p>Ron:<br \/>[37:01] Yeah. Yeah. I was turning 50. And I had looked at my career in 10-year cycles. I was at Target for 10 years. I had been Apple for 12 years. And I kind of asked the question, because opening Apple stores had become a hobby. I had such a great team, 60,000 employees.<\/p>\n<p>Ron:<br \/>[37:21] I was just having the fun of imagining an e-store, designing it, bringing it to life. They all worked. It really wasn\u2019t a challenge. It was just recreational. And and I kind of felt like I want my favorite days were creating the Apple store, bringing design to Target. You know, figuring out to resize kids\u2019 clothes. And I wanted to have one more chance to do something really hard. And this after he came around, a couple of investors had taken a stake in JCPenney. Bill Ackman, who\u2019s still quite famous, most people probably know on this show. And Steve Roth was running one of the large real estate funds, Vornado. And they wanted another board member. So they asked if I\u2019d do that. I met them. And then in the process at the next meeting the ceo longtime ceo a very nice man got in a car accident, and it made the board get a little worried about succession plan because he was probably 66 anyway so they pivoted and said ron would you be interested in running jc penny, and i look back you know i\u2019d started at mervins which is a competitor pennies yeah you know i\u2019ve been watching department stores my whole life and i said wouldn\u2019t it be a great challenge, challenge to try to see if the American department store can be reinvented, transformed. And, you know, I was led to believe that JCPenney wanted to do that.<\/p>\n<p>Ron:<br \/>[38:49] You know, it turned out, I don\u2019t think there was as much passion for change as I had. And it was very difficult. But I made a ton of big mistakes doing that. It was the hardest year, 18 months of my life. I was situationally arrogant where I really believed, you know, I\u2019d been very successful at Target, Apple, and I think I believe that I could convince anybody that this is what we ought to do and let\u2019s go do it. And it turned out the team wasn\u2019t ready for it. Our board wasn\u2019t ready for it. Our customers weren\u2019t ready for it. And, you know, I went from being kind of the top of the retail world to the bottom, you know, reputationally and all that stuff. But it was a good learning experience. And I address it head out on the book, and I think people will enjoy reading that. Because it was a tough time for me.<\/p>\n<p>Jason:<br \/>[39:40] Yeah, I can well imagine. As an independent observer, I mean, there\u2019s this debate we\u2019ve had in retail for 6,000 years, everyday low pricing versus high low pricing, right? And of course, the Walmarts of the world are famous for everyday low pricing. Before you came to JCPenney, they were one of the most extreme practitioners of high low pricing, right? And so there were tons of promotions.<\/p>\n<p>Ron:<br \/>[40:03] Oh, they were the most. No, the average item. pennies sold, less than 1% of its merchandise at the everyday price.<\/p>\n<p>Jason:<br \/>[40:12] Yeah.<\/p>\n<p>Ron:<br \/>[40:13] And the average item was over 60% off.<\/p>\n<p>Jason:<br \/>[40:16] Yeah.<\/p>\n<p>Ron:<br \/>[40:17] And the company began with the golden rule where JCPenney, James Cash Penney, said, we will never offer a product on sale. Truth begins on the price tag.<\/p>\n<p>Jason:<br \/>[40:28] Yeah.<\/p>\n<p>Ron:<br \/>[40:28] You know, look how that evolved. But, you know, the reality is we all know today everyday pricing won. Yeah. Yeah, there are people that look at look at what\u2019s happened to Ross and Marshall\u2019s and the off price industry that continues to grow.<\/p>\n<p>Jason:<br \/>[40:42] Yeah.<\/p>\n<p>Ron:<br \/>[40:43] It\u2019s everyday pricing and they they pretend it\u2019s 60 percent off 40 to 60 of department store. Well, none of this merchandise sold at department stores anymore.<\/p>\n<p>Jason:<br \/>[40:51] Yeah.<\/p>\n<p>Ron:<br \/>[40:52] But but it\u2019s an everyday low price strategy. Walmart\u2019s everyday place.<\/p>\n<p>Jason:<br \/>[40:56] Yeah.<\/p>\n<p>Ron:<br \/>[40:56] Targets a large, you know, everything\u2019s everyday place.<\/p>\n<p>Jason:<br \/>[40:59] Yeah, I do think the conventional wisdom today is everyday low pricing is a better business model, comma, if you\u2019re already high-low, it\u2019s very hard to roll that back.<\/p>\n<p>Ron:<br \/>[41:12] It\u2019s very hard.<\/p>\n<p>Jason:<br \/>[41:13] It is. And JCPenney would be one of the top case studies of how hard that was, although not the only one. Macy\u2019s and others went through similar struggles.<\/p>\n<p>Ron:<br \/>[41:21] But, you know, it is interesting. Our sales went down the first year because we just basically took off all promotion.<\/p>\n<p>Jason:<br \/>[41:28] Yeah.<\/p>\n<p>Ron:<br \/>[41:29] And our sales went down 20%.<\/p>\n<p>Jason:<br \/>[41:31] Yeah.<\/p>\n<p>Ron:<br \/>[41:31] Our plan was to be down 15. It was, you know, 5% worse because it\u2019s hard to predict these things.<\/p>\n<p>Jason:<br \/>[41:37] Yeah.<\/p>\n<p>Ron:<br \/>[41:37] When I was at Apple in 2002, our sales went down 40%.<\/p>\n<p>Jason:<br \/>[41:42] Oof.<\/p>\n<p>Ron:<br \/>[41:43] As we transitioned the operating system and our processors. And that was really comfortable for Apple because we knew that we had to get to a new processor family, get off Motorola, get to Intel, to get to the other side to continue to grow. But in retail, people are saying, why would you fire your customer?<\/p>\n<p>Jason:<br \/>[42:03] Yeah.<\/p>\n<p>Ron:<br \/>[42:04] Well, we had an old customer. We wanted to get young people to shop at Penny\u2019s. And to do that, we had to get these new brands to want to come. And we created a store with 100 store within a store. It\u2019s kind of like Best Buy is today.<\/p>\n<p>Jason:<br \/>[42:17] Yeah.<\/p>\n<p>Ron:<br \/>[42:18] And we\u2019re gonna fill those with all these DTC brands that now all have big footprints. Yeah. Look at Warby Parker. Look at Vori. Look at all these people. Who are just winning through stores.<\/p>\n<p>Jason:<br \/>[42:30] Yeah. In my mind, I think people look at your tenure at JCPenney, and if they want to be really superficial, they\u2019re like, oh, man, he came in with the wrong strategy, and the customer didn\u2019t accept it and fired him. I look at that, and I\u2019ve worked with a lot of very big retailers. And what I\u2019ve learned in my career is the hardest thing is not \u2013 knowing what to do is very hard, but it\u2019s not the hardest thing. The hardest thing is the organizational change management. It\u2019s getting 1.7 million Walmart associates to do their job differently tomorrow than they did it yesterday or any of those things. And so I don\u2019t think the data is there to say that any of your ideas of JCPenney were necessarily wrong. I think it was really hard to implement those ideas, and it probably required.<\/p>\n<p>Ron:<br \/>[43:15] No, the way I implemented it was a disaster.<\/p>\n<p>Jason:<br \/>[43:18] Yeah.<\/p>\n<p>Ron:<br \/>[43:19] And if you look back, at Apple, I was the only retailer for a while. Then I built the entire team, and we created the store together.<\/p>\n<p>Jason:<br \/>[43:26] Yeah. So you didn\u2019t have the change.<\/p>\n<p>Ron:<br \/>[43:28] I didn\u2019t have the chance to. I went to Penny\u2019s. The board wanted to go. And I just said, here\u2019s what we\u2019re doing.<\/p>\n<p>Jason:<br \/>[43:34] Yeah.<\/p>\n<p>Ron:<br \/>[43:34] And that was bad. The team wasn\u2019t ready for it. They didn\u2019t understand it. You know, so it was, there\u2019s a lot, but there\u2019s a lot of good lessons. Oh, for sure. And that\u2019s, that\u2019s, you know, why I wrote this book. You know, when I look back at my career, you know, when I was young, you remember this, there were people like Tom Hanks. Tom Peters.<\/p>\n<p>Jason:<br \/>[43:52] Oh, yeah.<\/p>\n<p>Ron:<br \/>[43:53] In search of excellence. And, there are all these great books we used to read. Stephen Covey\u2019s books.<\/p>\n<p>Jason:<br \/>[43:59] Yeah.<\/p>\n<p>Ron:<br \/>[43:59] You know, and, you know, you read a book and you get one thought and you apply it to work and it can change the game.<\/p>\n<p>Jason:<br \/>[44:05] Yeah.<\/p>\n<p>Ron:<br \/>[44:07] Hopefully my book, someone will read it and say, I like how they thought about people. I like how they thought about culture, how they thought about real estate, how they thought about design, how they thought about change, you know, and hopefully people will you know think about it and and maybe it\u2019ll give them a chance to do something different.<\/p>\n<p>Jason:<br \/>[44:24] Yeah i i love that and i\u2019m sure that that will happen uh my we\u2019re coming up on time but my listeners will murder murder me if i don\u2019t bring up two other topics, one is a debate we\u2019ve been having for as long as the the internet\u2019s existed is the whole, role of brick and mortar stores versus digital right and we have this funny saying the internet saw buying but broke shopping and there there\u2019s a lot of people that say like oh man stores are done i think mark andreessen at one point said that you know stores are going to go away that hasn\u2019t happened, the i\u2019m kind of curious where where you sit you lived through the whole digital revolution of retail like what, like are they it\u2019s.<\/p>\n<p>Ron:<br \/>[45:02] Not there\u2019s not even a debate anymore the answer is in front of us yeah stores didn\u2019t win online didn\u2019t win omni-channel one.<\/p>\n<p>Jason:<br \/>[45:10] Yeah.<\/p>\n<p>Ron:<br \/>[45:11] It just took time you know today 85 percent of revenue comes from well 70 of revenue comes from physical stores 30, from online but half of that is the online arm of a physical store like walmart or target or the gap yeah so there\u2019s only one out of seven dollars that comes from a pure play online store, and every online store has tried to open physical stores, Look at what Walmart\u2019s tried all these years or Amazon\u2019s tried all these years. Yeah, Amazon, sure, sure. Amazon. Yeah. And they\u2019re now building a 250,000 square foot super center in suburban Chicago.<\/p>\n<p>Jason:<br \/>[45:44] I know. I live in Chicago. I\u2019m, I drive by. I\u2019m, I\u2019m super excited to see what they do with it.<\/p>\n<p>Ron:<br \/>[45:48] But the, the proof to me, the biggest proof point is if Amazon hurt any retailer, it would have been Walmart.<\/p>\n<p>Jason:<br \/>[45:55] Yeah.<\/p>\n<p>Ron:<br \/>[45:56] Walmart was the low price category killer. They had everything in the physical world and that\u2019s what Amazon became. But walmart today its stock prices eight times yeah now hit a trillion dollars recently it was worth 130 million back in 2000 when the dot-com thing started, yeah and so what truly happened in retail is retail got overstored in the 80s and 90s when there was abundant capital like we talked about early that\u2019s what people were doing the only way to grow is to add more stores, and if you weren\u2019t opening 10 new stores a year there was a problem, we had overstored when the internet came on it took time for retail to learn how to do online shopping look at target we talked about took eight years they brought it on their own yeah but eventually they figured it out then they could reduce the the.<\/p>\n<p>Ron:<br \/>[46:47] The overstoring they got to the right equilibrium and now you\u2019re in a position where retailers are stronger and customers sometimes go online sometimes go to stores, stores you know but only channel is how we shop yeah you know that\u2019s just the way it is so i think physical stores actually the online was the rebirth of the store, and gave them a chance to rethink that whole customer experience model, but it didn\u2019t kill stores stores have thrived amen and it\u2019s just the fact that you can\u2019t argue about it now stores did hurt small town yeah you know where you couldn\u2019t afford. You have people buy online. There\u2019s just not a lot of volume that supports stores. Stores online hurt tired retail. It always has. Tired retail never works. But most of the great stores, look at the gap today. The gap\u2019s on their way back at all their divisions, right?<\/p>\n<p>Jason:<br \/>[47:39] Yeah.<\/p>\n<p>Ron:<br \/>[47:40] It wasn\u2019t an online issue. It was a merchandising, a branding issue that Richard and team are bringing back. And so the reality is tired retail doesn\u2019t work. Omnichannel does.<\/p>\n<p>Jason:<br \/>[47:50] No, I think that\u2019s very evident. And so then forecast that to the next thing. All anyone wants to talk to me about these days is the robots, is AI, right? And so, you know, I started e-commerce in the 90s. We had to figure out card not present transactions because they were illegal. Now they\u2019re trying to figure out human not present transactions. And there\u2019s a bunch of talking heads that are like, oh man, the robot\u2019s just going to shop for us. We\u2019re going to stop shopping on our own. We\u2019re going to stop picking brands and going to stores. How do you see AI playing out and and what will.<\/p>\n<p>Ron:<br \/>[48:20] That add or subtract yeah we\u2019ll have a ai it\u2019s just it\u2019s another technology, you know and technology has always helped retail it\u2019s always helped business takes a while to learn how to use it there\u2019s a lot of fear that ai is gonna eliminate jobs and it will but it\u2019ll also create jobs you know it\u2019s so interesting you read now, the jobs report the last three months has been really good.<\/p>\n<p>Ron:<br \/>[48:43] And you read about people like block and you know meta laying all these people off. That\u2019s big headlines. The reality is we\u2019re still hiring. And most companies are using AI in really smart ways. But with retail, we\u2019re all starting to use agents to shop. Walmart\u2019s got the lead there, really doing a great job. Amazon\u2019s trying there. They have an agent shopping thing. It\u2019s very slow. And I don\u2019t think it\u2019s particularly good. I was playing around with it today. But the world\u2019s changing. But I expect, I really believe Like, you know\u2026 In a world of the world\u2019s gotten way too digital and the people in their 20s and 30s, they\u2019re joining running clubs and they\u2019re looking for human connection. And, you know, they\u2019re the ones going back to stores and, you know, malls where I live, Stanford Shopping Center, where people have been trying to put stores out of business for 30 years is the hardest parking place in the valley. You know, so I just think people are looking for a connection. And, you know, hopefully AI, because we\u2019d be more efficient at getting general knowledge, will let us spend more time connecting, you know, is what I hope for.<\/p>\n<p>Jason:<br \/>[49:56] Yeah, I think I share your hope. And I think there\u2019s there\u2019s reasonable optimism that that\u2019s how it\u2019s going to play out.<\/p>\n<p>Ron:<br \/>[50:01] Yeah. And I just did build a build off that real quick. I read an article last week. Satya Nadella was talking about where he sees AI going. And he talked about human capital and he talked about, what was his word for it? Token capital. That\u2019s the same as physical retail and digital retail. Omnichannel is the intersection of physical and digital. What Satya is saying is really, it\u2019s almost like there\u2019ll be this new category called omniintelligence, which is agentic intelligence. It\u2019s general knowledge, applied with human knowledge. And the bringing of that together is really the future, I think. And I think we\u2019re going to rely more and more on people\u2019s own lived experience. And we\u2019re going to be bringing our own personal geography to work where we grew up, the lessons we learned. And that\u2019s what\u2019s going to matter. That\u2019s where the value will be. And how you bring that together with knowledge you get from AI. It\u2019s not going to be AI telling you what to do. It\u2019s how it enables you to think differently.<\/p>\n<p>Jason:<br \/>[51:05] Yeah, I think that is a really interesting way to think about it. And I think that\u2019s going to be a great place to leave it because once again, we have used up our listeners time. But this super interesting conversation. I\u2019m so grateful for you taking the time. I\u2019m so grateful for you writing the book. And I\u2019ll remind listeners, Shop Different is coming out on September 22nd, and we\u2019ll have links in the show note to buy it. But Ron, thanks very much for sharing some time with our listeners today.<\/p>\n<p>Ron:<br \/>[51:29] The pleasure of mine. Thank you.<\/p>\n<p>Jason:<br \/>[51:31] Yeah. And until next time, happy commercing. you.<\/p>\n<p>\u00a0<\/p>\n<\/div>\n<p><p><a href=\"https:\/\/dmsretail.com\/online-workshops-list\/\"><img loading=\"lazy\" decoding=\"async\" class=\"alignnone size-full wp-image-496\" src=\"https:\/\/dmsretail.com\/RetailNews\/wp-content\/uploads\/2022\/05\/RETAIL-ONLINE-TRAINING-728-X-90.png\" alt=\"Retail Online Training\" width=\"729\" height=\"91\" srcset=\"https:\/\/dmsretail.com\/RetailNews\/wp-content\/uploads\/2022\/05\/RETAIL-ONLINE-TRAINING-728-X-90.png 729w, https:\/\/dmsretail.com\/RetailNews\/wp-content\/uploads\/2022\/05\/RETAIL-ONLINE-TRAINING-728-X-90-300x37.png 300w\" sizes=\"auto, (max-width: 729px) 100vw, 729px\" \/><\/a><\/p><br \/><\/p>\n","protected":false},"excerpt":{"rendered":"<p>A weekly podcast with the latest e-commerce news and events. Episode 340 is an interview with Ron Johnson, the man behind the Apple Store. Subscribe: [&hellip;]<\/p>\n","protected":false},"author":1,"featured_media":1121,"comment_status":"","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[14],"tags":[],"class_list":["post-17220","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-podcasts"],"_links":{"self":[{"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/posts\/17220","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/comments?post=17220"}],"version-history":[{"count":0,"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/posts\/17220\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/media\/1121"}],"wp:attachment":[{"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/media?parent=17220"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/categories?post=17220"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/dmsretail.com\/RetailNews\/wp-json\/wp\/v2\/tags?post=17220"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}