Will Ron Johnson 'Enjoy' his comeback?

By George Anderson, RetailWire

The following appears courtesy of RetailWire.com, an online discussion forum for the retail industry.

At one point, Ron Johnson was thought to be a retail virtuoso, in part because of his use of the Genius Bar at the Apple Store. Later, during a disastrous stint as CEO at J.C. Penney, he became the poster child for what not to do while leading a company. Now, Mr. Johnson is back with a new retail concept. Will he reclaim his genius status or become the retail equivalent of Don Quixote facing down windmills?

Mr. Johnson's latest venture is an e-commerce site called Enjoy. A San Jose Mercury News headline calls it "a genius bar on wheels." Consumers purchase from a selection of consumer electronics on the site and have them hand-delivered by an expert who sets the products up and teaches the purchaser how to use them at no additional cost.

Mr. Johnson referred to Enjoy as "a personal commerce platform" in an interview with CNBC earlier this month.

"Our product is a person, and now for the same price you buy in a store, you can order a product from Enjoy and someone will hand-deliver and spend up to an hour getting you up and running," he said. "So it's meant for this new world we live in, which is going mobile, which involves a need for help."

Currently, Enjoy (www.goenjoy.com) has about 60 items available for purchase, including drones, electric bicycles and skateboards, Windows laptops, Xbox One consoles, and Sonos speaker systems. On May 19, the site will also offer AT&T smartphones for delivery. The service is currently available in the San Francisco Bay area and New York City.

While there is no current deal in place to work with Apple, Mr. Johnson's comment of "stay tuned" in the CNBC interview suggests that news on that front is forthcoming.

Enjoy will also help customers address issues with tech purchases made elsewhere. For $99, consumers can book a visit—typically an hour—with an "Expert" to troubleshoot a problem or for a quick training session.

Discussion Questions: What do you think of Ron Johnson's idea of Enjoy as a personal commerce platform? Will Enjoy be successful?

Comments from the RetailWire BrainTrust:

There is a HUGE difference between trying to turn around a battered battleship and the opportunity to create your own speedboat—entirely different situations, and Ron Johnson's talents are aligned with the latter.

The new "P" for today's consumer is most definitely personalization. Who wouldn't want to have their own Genius visit them and set everything up and teach them how to use it? With today's complicated devices that now must all connect, it's a home run waiting to happen.

Just one thing—how does Ron's business model work and support all of this?

According to Ron: "Our product is a person, and now for the same price you buy in a store." OK, maybe they can charge the same Genius hour rates, but who pays for the extra expense of travel and costs associated with delivering and unpacking products? Is there a substantial infrastructure somewhere? And what about quality control, not to mention liability issues of services in-home?

Retailers are struggling to be profitable, even if they offer "geeks and tech benches." The one notable exception is Apple Stores, yet you still have to go to a store to visit a Genius or Studio Bar (I have to believe that there are both financial and legal reasons for that).

Will Ron's Enjoy concept succeed? It is absolutely the right personalized service that consumers will love and crave. But at some point there has to be a scalable business model and/or enough very high margin products that will support all of the costs of delivering both the product and the Genius to your door.

How about Apple Watches on a silver tray from the Enjoy Genius at your door?

Chris Petersen, Ph.D., President, Integrated Marketing Solutions

Smart move on Ron Johnson's part to build this out on other people's money.

Limited assortment of goods with a limited number of cities is going to make it difficult for this one to compete against Best Buy's Geek Squad. In addition, in these large cities, New York and San Francisco, scalable promotion is costly, as is travel time.

This one has as challenging a hill to push up as the recovery that J.C. Penney was left with after the changeover that Johnson engineered a couple of years ago.

Roger Saunders, Global Managing Director, Prosper Business Development

As they say in rock and roll: It's not that hard to launch a nostalgia tour when you were a one-hit wonder, but you're more likely to sell out the Holiday Inn in Omaha than Wembley Stadium.

First of all, Mr. Johnson's expertise is in physical stores, albeit recently physical stores more or less backed up by some kind of an e-commerce element.

That said, let's look at the value proposition.

No doubt he has identified a niche market, and that may be the problem.

Baffled Boomers trying to decode the secrets of their mobile phones can already get tutorials at their mobile provider. Apple customers can go to the Genius Bar. Best Buy has the Geek Squad, and on and on.

What's different here?

Ah yes, the fact that a total stranger armed in full nerd armor will be coming into your home and walking you through your electronics. And that will work because people always want to spend an hour with a total stranger, huddled over an appliance with few or no witnesses.

Again, I think he's found a niche alright, but Mr. Johnson isn't a niche guy—unless it's a niche as big as Apple's.

Could this (with VERY selective and careful employee screening) be a boutique offering in selected cities? Of course, so could in-home orchid pruning.

Will it scale to a national offering rivaling his former glory? Better cancel that ticket to England and call the Holiday Inn in Omaha for reservations instead.

Ryan Mathews, Founder, CEO, Black Monk Consulting

I give him credit for constantly trying to be relevant, but this may be a tough sell as somehow, someway, there needs to be a profit somewhere. In this business it is thinner margins than ever before. Super high-end stuff, if handled properly, I believe could be a nice niche, but these smart TVs my wife and kids can set up in 20 minutes without all the hassle.

Going after the total home stereo business with a guarantee of great service could be a winner, and those with very high incomes would welcome this service, as many home stereo stores are no longer in business. You can get free lessons on YouTube on how to program your cellphone, and unless consumers are willing to pay more for their phones, how can this venture make money? I get a new phone every two years for free, with free install and help, so why would anyone pay big bucks for a smartphone to be delivered and set up when the local phone store or online tutorials are available for free?

There must be a ton of money out there from venture capitalists, as many new startups are getting millions without ever selling one unit of anything. If Ron Johnson can get the capital, then why not take it and try to parlay it into some serious cash? Go for it Ron.

Tony Orlando, Owner, Tony O's Supermarket & Catering

If Mr. Johnson takes it slowly (which he failed to do at J.C. Penney), there is no reason why Enjoy can't succeed. It's being targeted at a tech customer without the time or skill to get these products up and running, at a competitive price. (I checked the Surface Pro and Sonos prices versus Best Buy and Amazon.) By offering a value-added service for the same price, Enjoy has a chance to work.
 

Dick Seesel, Principal, Retailing In Focus LLC

Read the entire RetailWire discussion...

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