J.C. Penney has issued a new advertisement apologizing to its customers for the mistakes that the firm made during the past year or so. I have to commend the move. It takes guts to come out with such a commercial, acknowledging serious merchandising/pricing errors. However, customers needed to hear this message. Moreover, the message is strong and effective not simply because of the apology, but because it includes an explicit invitation for customers to return. What else is needed? J.C. Penney needs to follow up this ad by explaining to customers what has changed. What did they learn from these mistakes? How have they rectified past errors? What will be different when customers return? The firm has to answer these questions to overcome the hesitation that some customers will have about returning to the stores.
Showing posts with label J.C. Penney. Show all posts
Showing posts with label J.C. Penney. Show all posts
Friday, May 3, 2013
Monday, March 18, 2013
Ron Johnson: The Heat is On
Posted on 12:52 PM by Unknown
The pressure continues to escalate on J.C. Penney CEO Ron Johnson. In this week's New Yorker, James Surowiecki writes about the struggling retailer (thank you, James, for the shout-out). Meanwhile, on CNBC, former J.C. Penney CEO Allen Questrom speaks out about the situation.
Monday, January 30, 2012
Transformation at J.C. Penney
Posted on 8:52 AM by Unknown
Laura Heller has written an article about the transformation taking place at J.C. Penney. Heller's article, which can be found at Forbes.com, describes the firm as "the most interesting retailer of 2012." As you probably know, the company recently hired Ron Johnson, the former leader of Apple's retail stores. As CEO, Johnson has set out to remake J.C. Penney, and he's hired some talented folks to help him (including a senior executive from Target, where Johnson worked prior to Apple).
So far, Johnson's team has redesigned the logo, hired a new spokesperson, invested in Martha Stewart's company and launched a design partnership with Nanette Lepore. Perhaps most significantly, the company is overhauling its pricing strategy in a dramatic way, and it's redesigning the in-store experience. The company will be reducing prices significantly on many basics, relying less on weekly sales, and keeping prices at the same level for a month at a time on many items. It's not quite everyday low pricing (EDLP), but it's a shift away from the usual high-low pricing strategy that many retailers employ. In terms of the in-store experience, the firm will be introducing many "stores within a store" - with each mini-store associated with a key brand. Heller rightfully points out that it will be fun to watch these changes unfold, and to see if they succeed.
What's clear to me is that the department store format is crying out for re-invention. Whether or not these changes all succeed, Johnson is right to try rethinking the department store concept. In a world of massive discounting, outlet store malls in every state, and rapid e-commerce growth, department stores have to change their approach. It will take more than a new store experience though. The firm will have to offer exclusive products as well, so as to avoid pure head-to-head competition with rivals. Moreover, it will have to define itself clearly vis a vis its rivals. For years, the company's positioning and target market has been a bit murky. That will have to change too.
So far, Johnson's team has redesigned the logo, hired a new spokesperson, invested in Martha Stewart's company and launched a design partnership with Nanette Lepore. Perhaps most significantly, the company is overhauling its pricing strategy in a dramatic way, and it's redesigning the in-store experience. The company will be reducing prices significantly on many basics, relying less on weekly sales, and keeping prices at the same level for a month at a time on many items. It's not quite everyday low pricing (EDLP), but it's a shift away from the usual high-low pricing strategy that many retailers employ. In terms of the in-store experience, the firm will be introducing many "stores within a store" - with each mini-store associated with a key brand. Heller rightfully points out that it will be fun to watch these changes unfold, and to see if they succeed.
What's clear to me is that the department store format is crying out for re-invention. Whether or not these changes all succeed, Johnson is right to try rethinking the department store concept. In a world of massive discounting, outlet store malls in every state, and rapid e-commerce growth, department stores have to change their approach. It will take more than a new store experience though. The firm will have to offer exclusive products as well, so as to avoid pure head-to-head competition with rivals. Moreover, it will have to define itself clearly vis a vis its rivals. For years, the company's positioning and target market has been a bit murky. That will have to change too.
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