Why Apple’s Loss of Retail Chief to JC Penney is Apple’s Gain

on June 20, 2011
Reading Time: 4 minutes

I have written in various columns over the last few months, that once Apple moved the center of our digital life from the Mac and to the cloud, they could be freed up to offer many more devices that are Apple branded and gain greater features from their cloud offering.

This idea became crystal clear when Steve Jobs demoted the Mac to being just one of their devices that connect to the cloud. What Jobs and Company know very well is that we are moving to a world in which users will have a whole lot of screens in their digital lifestyle and will not be limited to just the PC like devices we use today to access the cloud. Over time, we will have screens in our cars, refrigerators, household fixtures, etc and all will have some type of connection to the cloud. Actually we are in what I call the first phase of “screenplays” in which the PC, smart phone and tablets are the dominant screens for this type of cloud based connectivity.

And we are just beginning the second phase of “screenplay” in which the TV and the navigation screen in our cars gain Internet connectivity and use the cloud to deliver all types of new services. This will be built out over the next two-to-three years and I believe that the first cars with fully Internet connected screens will come out by 2014-2015. These would be interesting since they would have a 3G wireless radio chip inside and be able to provide services as part of the navigation screen features. For example, an Internet connected screen could have a search feature tied to a voice command in which a person could ask “where is the closest Chinese restaurant?” and it sets the map in motion to get you there. Or a person could ask about traffic and get immediate response; it would allow for third party vendors to deliver OnStar like services as well. Although you can get this in some hand held models today, integrating an Internet connected device right into a car would have a dramatic impact on the auto industry in the future as it would make it the car another node connected to the cloud.

But the next phase of “screenplays” will come with screens integrated into household appliances and fixtures. We have some interesting refrigerators with screens now, but how they are used in the kitchen, with food prep, recipe access and related services are in their infancy and still need to be fleshed out. I believe that screens integrated into other appliances such as fixtures or mirrors in the bathroom, pop up screens in tables near the bedside that deliver web-based TV content, and voice activated web surfing, are not far off. These new screens all connected to the Internet offer platforms to deliver web channels for news, sports, weather and more. As I stated earlier, users someday will have a multitude of screen options tied to the cloud that they can use for all types of on-demand information, content, and services; it is short sighted to think that these screens would be limited to mobile devices and not integrated into the fabric of our homes as well.

However, in Apple’s wildest dreams they would never consider trying to sell digitally connected refrigerators, bedside terminals or bathroom mirrors with screens connected to the Internet within their stores. To even consider creating screens outside of their current comfort zone, they would need to have a retail partner who understood this concept and more importantly, would have a very broad consumer reach and appeal.

Interestingly, some mainstream retail places actually took a stab at this ten years back when they realized that PCs had become permanent fixtures within the home. They started creating “PC home zones” in their stores to showcase furniture and related products that could house PCs in fashionable ways. But this time around I would suggest that these stores create specialized selling zones for devices like this with highly trained sales people and perhaps even “genius bars” to help customers properly integrate these types of Internet-connected fixtures and appliances within their own homes.

The Future of Digital Home Retail
Enter Ron Johnson, future CEO of JC Penney. If anyone could figure out how to bring retail into the 21st century and tap into the role digital technology will play within our homes in the future, it is this guy. While his first goals will be to modernize the stores and make them much more consumer responsive and friendly, he would be in a rather interesting position at the right time to create these special digital zones within these stores and make JC Penney a leader in digital technology home integration. I think of him in this new role as a strategic plant for Apple. Sure he could also include devices from Android, Microsoft, etc. But whose devices and eco systems does he know the best and trusts at a highly personal level? My vote here is for Apple. I sure hope JC Penney’s board understood what they were getting in Ron Johnson because ultimately he could radicalize the mainstream retail experience in ways most people have not even dreamed about given his background and Apple heritage.

Will this actually happen? Does Apple really want to create screens for refrigerators, mirrors, etc that use iOS and tap into their cloud? My guess is if they had the right retail partner in place, they would surely consider this. Oh, by the way, Google has the same vision. Google Mobile exec Andy Rubin calls it the “The Androidization” of Android. They want to see Android in all types of screens as well, not just mobile devices. If they are smart they start wooing Ron Johnson now as well.

Using JC Penney as a future outlet for Apple devices may seem farfetched and you might even think my logic is a bit twisted. But keep in mind that Ron Johnson owes his rise to this position at JC Penney to Steve Jobs and Apple, who gave him the opportunity to show his skills and make a pretty big name for himself in retail. Should Apple want to expand iOS and Apple branded devices further into the home, I have a feeling that Ron Johnson will be the first person Steve Jobs will call.