Posts Tagged ‘J.C. Penney’



December 9, 2013

Back to J.C. Penney for a moment. If I am going to comment on former CEO Ron Johnson leading them over the customer cliff with a $1 billion loss and a 25% drop in sales during his first year, I should update you when they are doing better. Recently they reported that same-store sales rose in October, the company’s first monthly same-store increase since December 2011.  Penney also reported that online sales at continue to grow, rising 38% in October from a year earlier. Now, they didn’t do as well in November, but of course the real report card will be Christmas.

Why should you care about J.C. Penney, what is the marketing story here? Any business can turn itself around when they begin listening and respecting their customer base. Are you listening and responding to your customer base?



September 11, 2013

Before I get into my favorite subject, J.C. Penney, I want to thank everyone that sent me birthday wishes today. It is strange having a birthday on a day that is now remembered as a tragedy. But hopefully we can all make this a “day of service”  to others to remember the thousands that lost their lives. Now, back to J.C. Penney.

It seems like they are developing a new marketing plan that is going in the right direction. But so far, sales have been elusive. Their fiscal-second-quarter loss widened to $586 million, compared to $147 million last year. Online sales slipped 2.2% and sales at stores open more than a year declined 11.9%, compared with a decline of 22% a year ago. That is a bit encouraging. New Chief Executive Mike Ullman, who has been working to return J.C. Penney to a discount-oriented strategy, has stated, “There are no quick fixes to correct the errors of the past.”

That’s true, and that is why I keep talking about J.C. Penney. Their saga supports one of the core principles of my marketing book: because the world is moving and changing faster and faster there is little time to correct a marketing error. You must have the research and decision-making team in place to make the right decisions, first! That’s why Microsoft just spent billions on buying a has-been cell phone maker (Nokia) because their mobile software has missed the mark. and that’s why Apple just introduced a low-cost iPhone.

Do you have the research base and the team in place for your company? Now’s the time to hire outside help with your year-end retreat so you can make sure to ask the right questions. I can help.



May 6, 2013

J.C. Penny is the marketing story that just keeps giving.  Now new management is trying to do something that Netflix did it when they raised their prices and then rolled them back. Coke did it decades ago when New Coke failed. J.C. Penney wants a marketing do-over and is saying they are sorry and want you back.

That’s the social media pitch on YouTube and Facebook with the firm’s “It’s No Secret” campaign showing women working, playing with their children and doing everyday activities. “Recently J.C. Penney changed,” a voiceover states. “Some changes you liked, and some you didn’t. But what matters with mistakes is what we learn. We learned a very simple thing, to listen to you. Come back to J.C. Penney. We heard you; now we’d love to see you.”

Interestingly, Penney knew 17 months ago that their core customers didn’t like Ron Johnson’s changes. As reported in this blog numerous times, they had plenty of research and comments from customers that clearly indicated that “traditional” customers didn’t like the new JCP (they are also tossing that re-brand, going back to J.C. Penney). But they also had comments that a lot of new people were now shopping for the first time at JCP.

That’s the big question with a marketing do-over. How do you keep your new customers while appealing to customers that left you because you disrespected them – when both groups may want something different?

That’s why consumers and marketing insiders are mixed on whether the retailer’s latest efforts are savvy marketing or destined to cause more damage. An online AdAge poll showed that 70% of marketing folks think asking for “forgiveness” is a good idea and that Penney is on the right track. But what changes are they going to make? If you say you are listening, you’d better show proof that you are.

What do you think? I would love to hear your views on the new campaign.



April 9, 2013

Wow, I didn’t know I was picking on Ron, but I’ve written six posts in ten months on the incompetency of J.C. Penney’s CEO Ron Johnson. Last month (March 1st) I predicted he would be out within a year. I missed it, he was canned yesterday.

Now, I certainly believe he deserves to be fired (he won’t starve, he got close to $85 million for his 17 months of not listening to his customers). You simply can’t disrespect your customers and try to make them into a customer you love (people who will pay substantially more because of brand envy – i.e. Apple consumers) and keep your job.

With that said, Johnson did move in the right direction. He just did it without listening to the customer (25% drop in sales) or his staff. Call it ego. But J.C. Penney can’t turn back the clock, they must move forward (read Chapter 1 of my Powershift Marketing Book).

That’s why it is shocking that J.C. Penney renamed Myron Ullman, who had been CEO for seven years prior to Johnson, the company’s new CEO. Well, at least they are getting a bargain. Ullman will be paid $1 million per year vs. $58 million for Johnson.

The teaching moment: When someone fails to take you into the future correctly, it doesn’t mean you go back to the past. Mr. Ullman acknowledged this and was quoted as saying that it is premature to discuss plans for Penney’s future in a New York Times story, “Some things are working well, others maybe not, but I deserve a chance to be on the ground. Nobody ever wins by going back in retail because the customers’ expectations change all the time.”

That’s good advice. Unfortunately, Mr. Ullman is probably not the man for the job. My next prediction: the Board will find someone to replace Ullman as soon as possible.



March 4, 2013

Lots of you read my post on J.C. Penney’s Ron Johnson, thanks. One of my loyal blog followers, Bill Ferry, sent me this article from SLATE. Matt Yglesias, Slate’s business and economics correspondent, visited a J.C. Penney to see what the customer experience is like. Great story. I recommend that you start your week with a staff meeting to discuss how you are treating your current customers.



June 21, 2012

Last November, J.C. Penney spent $53.3 million to hire Ron Johnson, the brilliant mind behind Apple Stores, to turn around the aging retailer. So, as Dr. Phil would say, “How’s that working for you?”

Last month Penney’s posted a $163 million loss, announced a 20% drop in sales and a 10% drop in store traffic. Johnson blames all this on bad marketing and he ousted President Michael Francis earlier this week. As reported by the Wall St. Journal, Mr. Johnson thinks that the “strategy is working well,” and that customers simply don’t understand the new approach to product and pricing.

What customers don’t understand, Mr. Johnson, is why you don’t understand them. I guess I should send Ron a copy of my book, which explains psychographics (Chapter 9), the art of understanding the mind of your consumer and creating products that relate to their expectations.

The typical Apple customer is so different from the typical Penney’s customer; you would think anyone could figure that out. But this is a classic example of seeing the world through your own eyes. Johnson and Francis are two young, very hip, contemporary thinking retailers that are arrogant enough to believe they can re-make the Penney customer into their image. Wrong.

Penney’s customers don’t necessarily relate to gay spokespersons, super contemporary graphic design, or the elimination of coupons and deals they love. Sure, they might like the stores to be cleaner, nicer, with better merchandise (let’s deal with the product, Ron), but they don’t appreciate being told in every piece of marketing that they “just don’t get it.” Sorry, Ron, you don’t get it. You can’t change the fundamental nature of your customer through marketing. You have to embrace the mind-set of your customer. I hope everyone reading this is doing that in their business, every day.