BUILDING BRANDS AND RUNNING RETAIL. RON JOHNSON BREAKS IT DOWN FOR ANDREESSEN HORROWITZ

business&innovation

 

Ron Johnson, former Senior Vice President Retail Operations at Apple and the one who pioneered the concept of the Apple Retail Stores, breaks it down in a 27 minute podcast interview for Andreessen Horrowitz. Together with Tristan Walker, founder of Walker and Company, the two give their insight on brand building and retail distribution.

 

SOME OF THEIR STATEMENTS:

 

“Unfortunately we are in a period where (physical) stores will become increasingly less important in the total distribution mix for brands,”

 

“Brands are not retail they are much bigger than that. In the past we thought of retail stores as brands (e.g. GAP) today retail shops are just a distribution systems a physical face of a brand.”

 

Tristan Walker about building a brand: “1. You need a product that works and that stands up to what it promises. 2. You have to be authenticity through deep respect for the customer, the culture they want to be part of, the aesthetic they want to see, the voice in which we communicate with them. Stay true and authentic to their needs.”

 

How should brands start thinking about retail today? “Be thoughtful about the people who walk in your store and do buy. Optimize their experience.”

 

“A brand is more than the product itself, it’s the lifestyle, music, aesthetic so what can you offer to those people?”

 

“Define your brand value and than the store has to reflect this. The store is not about selling something, its about giving an experience to the owner of a product.”

 

“Go were the people are.”

 

Present the core brand attributes in a physical way.

Stores will become less important in the total distribution mix.

Know that a physical store is expensive and that it will become less important over time.

There is products that you want to try before you buy them. Trying before buying is becoming less and less important. E.g. shopping wine by the etiquette in a supermarket.

 

“The best and most powerful advertising is word to mouth. Word to mouth can spread faster through social media than ever before in history. Everybody goes online for research. Youtube can be a very powerful tool for brands.”

 

“Stores don’t create products, but stores can become a way for the first users to have a great experience. This experience will than be spread through word of mouth and social media.”

 

“People come to a store to touch it, try it, see what it’s all about. This is critical asset in the distribution chain even if most of the sales will later happen through other channels.”

 

“Building a brand don’t focus on growth but on customer lifetime value. Die hard loyal customers will talk about your brand.”

 

“Anybody who sets up a retail store as loss leaders is going to fail! There are much better ways to invest your money to build a brand. Reaching masses through a money loosing retail strategy is not a good investment.”

“How internet brands (like Warby Parker, Betabrand, Banobos, Amazon or getbevel.com) become famous: “Take one product or idea that means what the brand is all about and do it so exceptionally well, let the word of mouth carry over and than it enables you at some point to move into a store or physical appearance.”

 

“Brand is not what YOU say it is, it is what THEY say it is.”