Apple Dominates Retail as JCPenney Awaits Some Of That Shine

It won't come as news to the millions of Americans who go to humanity-choked Apple stores and try to find a blue-shirted staff member who might be unoccupied, but Apple's outlets are the most productive retail real estate in the United States, according to new research.

Now if its former retail guru Ron Johnson could finally just figure out how to apply some of the Apple shine to JCPenney, where he is the increasingly beleaguered CEO after having left Apple as head of its retail stores a little over a year ago.

Apple's store productivity has soared in recent years as consumers have flocked to buy iPhones and iPads, reports the Financial Times. As a result, Apple recorded sales per square foot of retail space of $6,050 in the year ended in June, putting it ahead of all other contenders, including No. 2 Tiffany & Co. and No. 3 Lululemon Athletica, according to data from Retail Sales. But even Tiffany finished a distant runner-up, with sales of $3,017 per foot.

"Consumers get excited about the product," Robin Lewis, chief executive of The Robin Report, told the FT. "Attached to that is also a learning process. You've got these young, attractive [store staff] and they're all addicted to the brand themselves." That's not to mention other attributes of Apple stores such as their clean and simple design and mobile check-outs.

This is all despite the fact that Apple's latest head of retail sales, John Browett, recently left the company after a short tenure in that post. And the stores succeed despite complaints by some critics about noise levels in some of the crowded Apple stores.

JCPenney's Johnson should have it as easy as Browett. Johnson was handpicked by the struggling retailer's board to shake up and overhaul the company and its go-to-market philosophy. But Johnson's disrespect for traditional mass-retailing tools such as continual sales and steep product discounts so far has only landed the chain in a huge sales slump, while its former brand president took the fall.

Store sales fell 26 percent during the last quarter, nearly unheard-of at a mature retail brand. Online sales fell 37 percent. JCPenney's stock price has fallen by about half since the beginning of the year. As a Forbes column commented, "since CEO Ron Johnson had consciously walked away from that strategy to something called 'fair and square,' who knew what they were trying to do to win the retail wars?"

And yet Johnson said last week that the company's store-renovation plan ? which includes rolling out more branded in-store boutiques from the likes of Levi's, Sephora, Liz Claiborne, IZOD, MNG by Mango, and its own JCP brand ? was "gaining traction with customers every day and is surpassing our own expectations in terms of sales productivity, which continues to give us confidence in our long-term business model." According to a press release, the goal is to offer 100 in-store branded boutiques "over the next few years," essentially turning JCPenney into a shopping mall of sorts as it touts "mini stores" and uncouponing to boost sales.

The question is whether the company's investors, board and customers will give Johnson "a few years" to make his grand plan work. How could one executive be so in large part responsible for one of the biggest successes in the history of retailing and then immediately become nearly solely responsible for what is shaping up to be one of the biggest disasters in the history of retailing? If he doesn't turn around JCPenney very soon, Johnson may have a lot of time to think about the answer.

Source: http://feedproxy.google.com/~r/Brandchannel/~3/zffOj8yR4Fs/post.aspx

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