At a time when retailers are obsessing over how to bring customers into their stores, Ron Johnson has a different question. What if, he asks, you could bring the store to the customer, in their home with in-person, human engagement?
When Ron Johnson has a new idea, the retail industry pays attention. He is hailed as the visionary who helped give Target its “Tar-Jay” cachet and who was instrumental in creating the Apple stores. But he drew criticism as CEO of J.C. Penney, where he misjudged the company’s and the customers’ tolerance for change, and sales plummeted.
Johnson’s latest venture is Enjoy, which he describes as an “on-demand mobile store.” He told CO— he sees an opportunity for a hybrid retail model that combines the convenience of online shopping with the deep engagement and human connections possible in physical stores.
Silicon Valley-based Enjoy was founded in 2015. It now boasts 2,000 employees and operates in 54 U.S. markets as well as in the United Kingdom and Canada.
The company has partnerships with AT&T, as well as telecom providers in the U.K. and Canada, to provide free, same-day, in-person deliveries, with setup and expert advice.
Johnson spoke to CO— after addressing an audience of retailers and entrepreneurs at an event sponsored by innovation consulting firm Current Global, held on the eve of the National Retail Federation’s annual show in New York.
The next day he told a packed auditorium at the retail conference that Enjoy wants to bring a “premium last mile” experience to digital shopping, referring to the place where the product ultimately reaches the consumer: their home.
The premium last mile
Premium brands, he said, traditionally have delivered a premium last mile experience in their physical stores. With online orders, the last mile becomes a “dumb last mile,” Johnson said, as products are dropped on a customer’s doorstep with no human interaction.
“It just didn’t make sense to me that a digital shopping experience would be the same last mile for every product,” Johnson said. “Someone’s got to invent how a premium brand should go to market in a digital world.”
He believes Enjoy is doing that.
Enjoy employees, Johnson said, are experts on the products they deliver. They visit an average of seven customers a day, spending 30 to 45 minutes per visit.
The Enjoy experts arrive prepared to sell the customer accessories such as phone cases or chargers, or additional telecom services.
With online orders, the last mile becomes a “dumb last mile,” Johnson said, as products are dropped on a customer’s doorstep with no human interaction.
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About 50% of Enjoy visits result in added purchases of accessories or services, Johnson said. The company is paid by its partners based on those additional sales.
Enjoy employees work full time, are paid a competitive salary, and do not work on commission, an Enjoy spokesperson told CO—.
A ‘Geek Squad for everybody else’?
Sucharita Kodali, vice president and principal at Forrester Research, Inc., an analyst who specializes in e-commerce and omnichannel retail, said Enjoy has an interesting retail model that solves certain pain points for consumers and retailers, but that it faces challenges scaling and becoming profitable.
Johnson has solved the issue of having to source customers, she said. “He’s solved the issue of retailers wanting to get into customers’ homes. He’s solving the problem of customers wanting hand-holding in the post-transaction process. The part that I don’t understand is how he makes money,” Kodali said.
She referred to Best Buy’s Geek Squad, which provides in-home installations and support for Best Buycustomers, and said Enjoy could perhaps “become a Geek Squad for everybody else, which there is a space for.”
Luxury retailers such as Neiman Marcus and Saks, and luxury brands like BMW make house calls and provide special services for their most high-end customers, she noted. “The challenge is how you scale that to the average person,” Kodali said.
Enjoy has raised $350 million in investment funding since 2015 and is valued at just under $1 billion.
The company expects to be profitable in the near future, an Enjoy spokesperson said.
When he was launching Enjoy, Johnson and his team asked, “Does everyone need help? Aren’t these things supposed to be easy to set up?” he said.
What they discovered, he said, was the typical reaction to Enjoy visits, was “I wish you could have spent more time.” All types of customers — young, old, tech-savvy and not — valued connecting with, and getting help from, a knowledgeable salesperson, Johnson said.
He also believes that, as smart homes and connected devices become more common, demand for Enjoy will grow.
“There are reports that within five years we will all have 100 connected devices — from our television to our music players to our doorbells, and that’s where the home is a pretty sweet spot” for a company like Enjoy, he said.
Johnson spoke openly at the Current Global and National Retail events about the mistakes he made at J.C. Penney. He still believes that his vision for the department store chain, a vision designed to bring in new, younger customers, was the right one, but said he erred in moving too quickly and not bringing in a management team that would embrace change.
He had anticipated sales would drop by 15% when J.C. Penney ended coupons and sales, as he tried to create a story what would attract next-generation shoppers. Instead they dropped 20%.
“I had supporters at the start, but they fell away pretty quick when the business got tough,” he said.
Broader opportunities ahead
Johnson sees longer-term opportunities for the Enjoy model in categories such as fashion and beauty. But for now, he told CO—, he plans to concentrate on consumer electronics because the opportunity there is so robust.
“The lesson I get from Enjoy — and that’s why I have such confidence in where we’re going — is whether it’s beauty or high-end fashion, those online shopping experiences are broken, and what would solve them is expertise. And that is why we look forward to moving into other categories at some point in the future.”
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Published February 24, 2020