J.C. Penney just blew up its brand — in a good way — thanks to a new management team with some radical new ideas. J.C. Penney is about to be the most interesting retail story of the year.
New JCPenney CEO Ron Johnson (Click Image To Enlarge)
Late last year, J.C. Penney began building a dream team with Ron Johnson — the man who launched Apple‘s retail stores — as its new CEO. Johnson cut his retail teeth at Target and from there he poached Michael Francis to serve as J.C. Penney’s new president. Francis is largely responsible for Target’s branding and marketing efforts.
And this week, Johnson took a sledgehammer to the J.C. Penney way of doing business. It’s the most exciting thing I’ve seen in retail since Apple opened stores, again with Johson at the the helm.
Click Image To Enlarge
There’s a new logo, new spokesperson, new pricing stategy, an investment in Martha Stewart Omnimedia and another designer partnership with Nanette Lepore. All in two short months.
J.C. Penney — now being referred to as jcpenney — is implementing a new pricing strategy, slashing prices up to 40% with to keep them that way year round. Not EDLP, this fair pricing strategy is designed to keep prices low on the basics shoppers look for frequently and introduce new merchandise on a routine schedule.
Johnson said.
“We want customers to shop on their terms, not ours. By setting our store monthly and maintaining our best prices for an entire month, we feel confident that customers will love shopping when it is convenient for them, rather than when it is expedient for us.”
It’s a shocking move for any retailer, let alone a department store where hi-low pricing and promotions have long been the norm.
There will also be an entirely new layout, with brands merchandised in shops within the store rather than endless racks and runs of shelves. There aren’t many new ways to display merchandise and any effort to re-invent the in-store experience will be welcome with shoppers and provide a reason to buy in stores, rather than looking for bargains online.
Johnson said.
“The department store is the number one opportunity in retail today. We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America’s favorite store. Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated – fair and square.”
The new logo is meant to evoke the American Flag, a move likely to resonate with today’s shoppers and set it apart from the rest of the retail pack.
Most retailers make tentative steps toward change. They take a year to develop a new store format, reconfigure a layout or commission a logo. Then they test it, refine it and test it again. It can take years to roll out changes to a large store base and often before that happens, the plan changes again.
But Johnson is anything but typical. Changes begin on Feb. 1 and in August jcpenney will begin updating all stores with new merchandise and presentations, adding two to three shops each month through 2015 in what management is calling a complete transformation.
It’s refreshing, daring and probably exactly what the retailer needs. It’s probably what a lot of retailers need but few have the leadership and support to do it.
COMMENTARY: JCPenney needs a transformational change and it will be very interesting whether JCPenney's new CEO Ron Johnson can transform JCPenney into America's favorite department store.
Apple Stores reflect Apple's culture (or should I say, Steve Job's culture) and are beautifully appointed, slick, high-tech minimalist stores, with Apple products beautifully displayed on wooden tables, where Apple shoppers can test drive each Apple product before buying. Johnson knew that part of the shopping experience includes great service and so The Genius Bar was born. Under Johnson's stewardish, Apple Stores are the highest grossing per square foot than any other store in the world. Johnson's strategy at Apple worked to perfection, resulting in ever increasing profit margins for Apple products, while other retailers reduced their prices.
Johnson had the advantage of starting from scratch with the Apple Stores. He was able to differentiate Apple Stores from other consumer electronics retailers coming out of the gate. But, it remains to be seen whether Johnson can truly transform JCPenney, a department store that has been stuck in old-style classic department store retailing.
I like the fact that Johnson is introducing small specialty branded mini stores within the JCPenney store, introduce new merchandise, with names like Martha Stewart and Nanette Lapore. JCPenney also made another bold move back in December 2010, by moving its entire JCPenney catalog on Facebook.
I like the "have it your way" merchandising strategy that will be introduced so that shoppers can depend on year-round low prices on merchandise they regularly buy.
Courtesy of an article dated January 26, 2012 appearing in Forbes
Most people don't like change and I do believe that that is the most common reason why so many customers are upset with the changes that jcpenny is undergoing. The most important thing for the "Dream Team" to remember is that not everyone will be happy with everything that any business or person does but that shouldn't stop progression.
I think that the company is going in a great direction. I have never been a customer of jcpenney's due to the high prices, but from all that I hear I am happy to say that from looking at the jcpenney.com website I do like what I see so far. Best price, great style, new hope for retail.
Posted by: Monica | 02/10/2012 at 07:36 PM
Richard,
I totally agree with you. JCPenney has 100 years of history and a personna as a department store catering to families. Very similar to Sears and the late Wards. It's so difficult to reinvent yourself. The new logo is definitely modern and looks more upscale. No mention of "Penneys" just "JCP." I can't remember the last time I visited a Penneys store, or Sears for that matter. I hate shopping.
Posted by: Tommy | 01/31/2012 at 09:24 PM
When a mass merchandiser changes his image with the public the first thing that he creates is confusion. Many of the greatest chains in the past have done this: Bradlees, Sears, Kings, and many more. The problem is that once you create confusion it's difficult to return to a normal image, as evidenced by the demise of Grants.
Each of the above giants tried to change their image; mostly to better their quality of a mix. It didn't work, and many of them faded into history.
Be careful where you wonder and what you choose.
Posted by: Richard E. Jandrow | 01/31/2012 at 12:14 PM