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Ron Johnson

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2017-03-06
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2017-03-06
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  1. “Iconic Great Foot Crown One of the remaining department stores. There had been 60, as you know. Right, right. And now there were three.”

    2017-03-06 · Decoder with Nilay Patel · Recode Decode: Ron Johnson, CEO, Enjoy · IDENTIFIED FROM THE TRANSCRIPT

  2. “And Bill Campbell tried to talk me out of it a bunch of times. My wife didn't want me to go. Nobody wanted me to go, but I did.”

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  3. “He thought it was silly to go to a company that's kind of got the wind in its face, not the wind in its back. Sure, this is the state. And he just wanted me to go a place that I could flourish at. And he didn't think that would work.”

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  4. “Wouldn't it be great if you could reinvent a department store? And I was led to believe that that's what the board wanted to do. And I kind of got talked to about being a board member. And then once I mouth them about being a board member, they said, you become CEO. I thought about it. Steve said, don't you dare. If you want to be a CEO, I'll find you a great company.”

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  5. “A lot of people ask me that question. No, I just, uh. Was inspired by the challenge. I've always liked to take on big challenges. You know, people didn't think Apple could do stores. No, they didn't. And people were thinking, you know, department stores are pretty tired.”

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  6. “We're in China, yeah. We had a bunch of stores in China, may Five to ten? And it just became a hobby, and then I got a call to go to JC Penny, and I said, Well, maybe that'd be fun.”

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  7. “I enjoy it. I enjoy going there. All right. Why? It'd become a hobby. I'd been there 14, no, 12 years. We had opened stores and”

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  8. “Be a signature store, but he understood that doing something beautiful, simple, giving back to the community. Have more power And two years later, the Apple Store is the fifth most photographed thing in New York.”

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  9. “He could have said, you know, apple is on the top of the world now. It's approaching 2005. We should have a big building like Louis Vuitton right at 57th and 5th.”

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  10. “He owned the building, so Donald owned the General Motors building. For a number of years, then he sold it to a guy named Harry Macklow. Who was our landlord we rented from Harry, but this spot had been un Rentable for seven years. No, we wanted.”

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  11. “The beginning of the world's great shopping street. And we decided that if we could create, the architect did a great job, Peter Bolin, Steve loved it, we all loved it. Imagine creating a glass box that was a door that was thirty two by thirty two nine hundred square feet And if we did that sometime during the day, light would be on every corner of the store at some point in the day. And it only took up 5% of a public plaza. Plazas in New York are all 20,000 square feet. 100 deep 200 wide. So we convince the city to let us put in this physical presence because we said, look, we're going to take 5% for our door And we're going to redo the plaza for the city of New York. We're going to put in Wi F And the city said, okay, and that became the Apple store. Really. But we rented parking rent. It was like renting a parking lot.”

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  12. “He goes, we're going to take a spot that Donald Trump Couldn't lease for seven years. It's been unoccupied. And we get a hole in the ground. I said, what do you mean? He says, You can't put a store above grade. I go, we're going to Fifth Avenue without a store. We're going to go underground? And he said yes. And he said, We started to think about it. Well, the nice thing where we are on Fifth Avenue Apple is there'll never be a store north of it because it's zoned residential. So we're not in the middle of Fifth Avenue. We are the first store on the first store.”

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  13. “The thinking behind that? Well, we wanted to put a star on Fifth Avenue. It's the greatest shopping street in the world. We looked for years and years. And finally, our real estate guy came back and said, I've got a brilliant idea.”

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  14. “He called the GC at the time the day later he said, Could you trademark Genius Bar? Then we did it and it turned out to be one of it's kind of the soul of the story Everyone kind of remembers it, but it's like anything you have an idea, you got to go execute it.”

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  15. “He said they're all geeks, so you can call it the geek bar. And I said, Steve. Kids who are in their twenties today grew up in a very different world. And they all know technology, and that's who's going to work in the store.”

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  16. “Well, he was But he said, you know, Ronnie goes, You might have the right idea, but here's the big gap I've never met someone who knows technology who knows how to connect with people.”

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  17. “Go to a Best Buy or wherever where they just don't know what they're talking about. So I remember the day I came in and told Steve about the genius part. He says, That's so. Idiotic. It'll never work. And I said, why? That's”

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  18. “Imagine we had great bartenders called Mac Geniuses, smartest Mac people in town, but they dispensed advice. Just like a bar”

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  19. “We had water, we had heavy on water, but a bartender, they're friendly, they connect with people, they can make anything you want.”

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  20. “Yeah, don't hide it. Don't hide that you need help. You're switching to a Mac. You're going to need help. Technology is hard. That's what people think. And so, just like a fashion retailer, we take the back wall and put their big Video screen, we put in a bar, and the idea behind the bar was create a place that's really friendly. Think of getting a drink. You know, bartenders can make any drink on the planet.”

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  21. “But Steve was into every little detail the fittings, the structure he understood the engineering of it. Steve was so incredibly smart on so many subjects. That was the amazing thing about him.”

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  22. “He loved doing beautiful design. And we were opening our first two-level store at Soho. And we imagined a glass stair. And that was amazing about Steve. I mean, he had more, he designed that stair probably like he did the iPod, which were about the same time.”

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  23. “And it made you want to put your hands on it. So you had to offset the technology with something much softer. So the Apple store had these stone floors that came the same things that are Florence sidewalks. Beautiful maple wood tables, you know, very simple design, clean, well-lit. And the idea was that you'd only see in there is products and help.”

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  24. “He had designed these beautiful wood parsons tables. Which were kind of what the products would sit on. And there was something neat about this very familiar homey wood, this beautiful maple wood veneer that you paired with high tech. It was high-tech, high touch. It just looked approachable”

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  25. “You can grab stuff. And that was it because we didn't have other products And they are just hooked to the internet. And people came in. What do you do? It's an inviting, beautiful environment. Well, I might as well put my hands on a problem.”

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  26. “It's a social place, but mostly we said the entire purpose when someone comes to a store is to engage They've got to talk to a person or get their hands on a product. Nothing else matters So we got everything out of the way. There's no inventory on the floor. That was really counterintuitive, right?”

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  27. “The Great Mall. Mall of America. Whitfield in Schomburg was a big mall at the time We went down to Dallas. We went across the country. We opened 25 stores in 25 weeks.”

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  28. “Yeah, but my attitude with Steve, you know, it doesn't matter what stores first. If we're going to open 25, let's just get great locations”

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  29. “It did, but at the time, you know, I told Steve if we're going to do this, you can't test it. You got to believe in it. You got to roll it out. You got to go for it. So we booked 25 sites. We said, let's open the best relative site first. So we got just a great site in Tyson's Corner.”

    2017-03-06 · Decoder with Nilay Patel · Recode Decode: Ron Johnson, CEO, Enjoy · IDENTIFIED FROM THE TRANSCRIPT

  30. “It was so fast, and people thought the macs are incredibly fast. But then we let the store become basically a freer in a cafe. Sure. Suddenly it's busy. Beehive, but that got people to try the computer. Then our employees had to find people that looked a little more interested. She'd see someone, you know, trying out iPhoto or checking out iTunes, and we talked to them. And we began to build just an incredible business from putting stores where people didn't expect them to be. It was the first technology store.”

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  31. “So they come into the Apple store and they're going to meet somebody. What do you do? Well, there were no smartphones. You're starting to get online. You want to check your email. Well, I'll use this computer at the Apple store. So all these PC people try to Mac for the first time. Right. Well, it turns out we had everything hardwired to high speed internet.”

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  32. “To go in, they're in the mall any So all they need is a 10 foot decision to walk in a store. We got really lucky because in 2000, we forget it's only 16 years ago, 97% of America was on dial-up internet with time AO.”

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  33. “Because we didn't believe people would go 10 miles in their car to go see an Apple store. Right. But we could maybe walk 10 feet out of their way.”

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  34. “There wasn't product, but we then made half the store devote to service, like the genius bar and training. And that was because we said if someone's going to switch to Mac, they got to know we stand behind it. And then we put the stores this really interesting decision in shopping walls Which everyone thought that is absolutely idiotic. Right. Because shopping malls get frequency and it's for Things you buy all the time, you buy a Mac every three, four years Why would you pay that rent?”

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  35. “That was it because we had two desktops and two portables. And so we could fit our product line in 36 square feet Went and built 6,000 square foot stores. But that enabled us to design a unique store. We could create sections about what you do with a Mac, not about the products. We had movie sections and music sections. On and on, in photography.”

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  36. “He said, really big And I said, Well, then, is it bigger than the gap? And he said, much bigger. I said, Then we need a store to be as big as the gap, because otherwise people think we're in a small idea. So we look around and go, where's the product line? He goes on the table.”

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  37. “It was great. I think it was right now. What was your central thesis? The central thesis is probably one of the greatest. The central thesis is if Apple was going to do it, it had to be bold. It had to do something different. So when I was meeting with Steve that second time, we were in now the boardroom. And I said, Steve, how big is the brand?”

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  38. “It was funny, but if you look back, if you were to take that out, it's pretty much what the playbook for the Apple Store were.”

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  39. “And I walk in and he goes, hey, thanks for coming back. I said, glad to be back. And I said, so what'd you think of my thesis? He goes, oh, I didn't like it very much, but that's okay.”

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  40. “No, he wanted stores. And he said It was so funny. He said, you know, we hit it off really well. He said to me, Well, he goes, Why don't you do this? It's Thanksgiving weekend coming up. Why don't you write down a little bit what you would do? How would you approach retail? Tell me about it. So I went back and I wrote up this like 10 page thesis of why Apple should do stores, what they should be like, blah, blah, blah. And I get to call it, hey, can you come back? And I came back. And at that time, Mickey Drexler met the ETS apple. Is that on board? And then I was going to meet Steve at the end”

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  41. “Who knows? This guy walks by. I remember seeing this big knee with a torn pair of jeans. And it was Steve said, I'll be right back. So we sat down that night from six till about eight, and it went by in an instant. We just clicked from day one. I love Steve.”

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  42. “Oh no, someone called for him And I went out and met him one day and I remember sitting up there on a Monday in his conference room.”

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  43. “Maybe, but you know, I'll never be do store design. I'll never do real estate. I'll never go hire the people that work in the stores. So, by coming to Apple, Steve was going to let me design, develop a retail strategy for Apple. And I thought that'd be really cool. What did you think?”

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  44. “He found he decided if Apple was going to win on innovation, it had to control the last mile. It had to have its own stars. Now, it was a Interesting choice because Gateway had 300 country stores selling PCs to the 95%. And they were closing the stores, and Steve goes, I want to open stores. But Steve always had great intuition. So he found me, and I was at a point I had been, you know, basically doing general merchandise retailing for 15 years. You kind of get pegged in as a merchant and I was always going to be a merchant. And I might be lucky and rise to the top, but I'd never get to do.”

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  45. “Well, you had to do two things. You had to say one, we're going to treat you well, we're not going to discount. We're going to move to everyday price. So I converted the entire home area to everyday pricing back in the 90s. 97% of her business was full price, whereas a lot of people were still promoting. They were shallower. But because we treated their products well, we worked on presentation.”

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  46. “Or the Target, bridge that gap because we became hip enough that Calflon and different types of people started coming to Target Bodum, you know, different people. And that made it kind of”

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  47. “Start with Michael. Then when we got Calfalon cookware to come from department stores down to Target at the time, down to Target. Right. See, we forget there was a big change back then. Premium products were only sold in premium stores. Moderate stores, the discount stores only had access to low price merchandise.”

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  48. “So, how do you create it a fashionable thing to do? And back in the 90s, everyone said, hey, I got that at Target. It was kind of socially hip and cool to buy your kids' clothes. Wouldn't”

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  49. “But we had to convince people, but we believed that most young families needed to shop value, but they didn't like to be at Walmart to be cheap.”

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  50. “So we brought out a tea kettle, I think, at $25. Right, which is expensive. At the time, our highest priced tea kettle was $9.99. Right.”

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