Ron Johnson is back. And he’s trying to go toe-to-toe with Amazon.com (AMZN).
The man behind the success of Apple (AAPL) Stores-- who fell from grace as CEO of JC Penney (JCP)-- is launching a new retail venture called ENJOY. The company sells technology products that are then hand-delivered by an ENJOY employee who helps customers with the setup.
Tom Lydon, president of Global Trends Investments, calls it a big bet on Johnson’s part, but he believes it’s a good business move, especially considering the large number of people who aren’t exactly computer savvy.
“I think that’s a great idea,” he says. “Setting up a new TV or computer, taking the data off your old computer and transferring it to another one-- there are a lot of us Baby Boomers who are technophobes—we don’t really know how to do this.”
And Johnson isn’t alone in taking on the 800-pound gorilla of online retailing. Marc Lore, the co-founder of Quidsi (which he sold to Amazon), is behind Jet, a $49.99 a year members-only shopping club that promises the best price on 10 million items.
However, Lydon isn’t as optimistic about that.
“I think that’s too close to what Amazon is offering,” he argues. “Amazon Prime is fantastic, everybody in our family uses it, click of a button, next day delivery. I’m not so concerned about price as ease of delivery.”
But as Yahoo Finance’s Jen Rogers notes, Jet is intentionally trying to reach those customers who aren’t hung up on speed.
“That is one thing different with Jet, the delivery time is a little bit longer,” she points out. “They say they’re not going after people doing these impulse things and need to get it the next day, but people who are more price-conscious.”
Yahoo Finance editor in chief Andy Serwer isn’t betting against either ENJOY or Jet.
“Everyone thinks Walmart (WMT) dominates physical retailing, Amazon dominates digital retailing,” he notes. “But of course there are thousands of other retailers that are going to be wildly successful-- maybe one of these, maybe both of them.”
However, Serwer is a bit dubious about both companies’ business plans.
"There are signs of a bubble a little bit,” he explains. “With ENJOY, he’s raising $30 million. That’s a LOT of money for an early venture company. And as far as Jet goes, it has a membership model like Costco (COST), and the story in the New York Times that talks about both these companies says that allows him to not have to make a profit on margin. What? This sounds right out of the Silicon Valley HBO (TWX) show!”
Still, Rogers adds that it will be worth watching both of these new ventures, especially to see if Johnson can redeem himself and become the retailing world’s “comeback kid.”
“It would be an interesting next chapter after the Penney debacle,” she says. “If he can pull it off, it would be good.”