Apple (AAPL 0.52%) retail executive Ron Johnson had something of a rock star reputation when he left the company for the challenge of leading the turnaround of J.C. Penney (JCPN.Q), which in 2011 was emerging from the Great Recession weakened, but still standing.
Photo: Flickr user Fortune Live Media.
Yet layering on the lessons of Apple to a stodgier department store chain didn't quite work out as planned, and as customers fled, sales plunged, and Penney was brought to the brink of financial ruin. Johnson was ultimately ousted by a board of directors that apologized to its customers for abandoning them.
After Penney reversed almost all Johnson's transformation and resumed its prior retail course, the former Apple exec's reputation as a superstar retail mogul looked tarnished. He seemed destined to be remembered as the man who brought J.C. Penney to its knees.
Now he has set out to rehabilitate himself with a new start-up venture that The Information says is in the growing on-demand gadget delivery market, describing the venture as "Best Buy's Geek Squad meets Apple's Genius Bar." The idea seemingly being to both deliver and provide technical support for technology.
It could be that Johnson's own genius lies in making businesses work better behind the scenes, and his new customer service-driven delivery start-up can salvage his reputation once more.
Retail delivery is becoming a key avenue for connecting with customers. From supermarkets to shopping malls, same-day delivery is turning into an essential component of operations. Google started Shopping Express and eBay started eBay Now as regional delivery services to compete with Amazon.com (AMZN -1.65%), which is making its own way into delivery.
Crowd-sourced delivery is an especially hot trend, with services like Uber and Deliv make it easy to get virtually anything sent from Point A to Point B.
Combining delivery with technical know-how could be a key differentiator for Johnson's start-up, but Best Buy (BBY 1.09%) has had mixed success in its efforts to expand by partnering with retailers to do just that.
The Best Buy tech support team set the bar that others try to leap over. Photo: Flickr user Mike Mozart.
Last year, Target (TGT -0.54%) ended a six-month experiment with the Geek Squad, saying it had run its course, which is hardly a ringing endorsement of success.
The retailer's hardline goods division, which included consumer electronics, represented nearly 20% of its sales, so partnering with Best Buy's tech guys seemed like a smart way to boost sales. That the project ran out of steam doesn't bode well, but Geek Squad's similar 2-year-old partnership with eBay for electronics won at auction soldiers on.
Yet it's an area that is getting noticed elsewhere. Another start-up, Geekatoo, raised $1.7 million earlier this summer saying it wanted to go to companies such as Amazon, TigerDirect, and Buy.com with a pitch to be their Geek Squad-type service.
According to the market analysts at Parks Associates, the market for U.S.-based consumer and small-and medium-business tech support is expected to hit $30 billion next year, with households contributing 40% of the demand.
Where retailers like Staples offer in-store tech support and RadioShack just launched its Fix It Here program for cell phones to help drive traffic, others using an Uber-inspired model of locally sourced talent, which might be just what Johnson is doing with his service, could further cut into Geek Squad's market share.
The risk, of course, is that technology continues to become more user friendly and consumers themselves more technologically savvy. More services and a smarter client base could mean trouble for more such start-ups.
A lot of what Johnson tried to implement at J.C. Penney made sense -- everyday low pricing should be more attractive than scheduled faux-blockbuster sales -- but as H.L. Mencken once wrote, "Nobody ever went broke underestimating the intelligence of the American public."
Maybe that's too harsh of an assessment, but so was the thinking that Ron Johnson was finished in retail. Even if this new Geek Squad/Genius Bar-style delivery service mash-up doesn't workout, he certainly seems smart enough to land on his feet once more.
