Posts Tagged ‘JC Penney’

Turning around the turnaround: JC Penney goes back to the future …

May 15, 2013

In one svelte move, JC Penney launched near-total, point-by-point repudiation of ex-CEO Ron Johnson’s attempt to turn the retailer into a chain of Apple stores. 

 

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Let’s dissect this one …

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Dx: Sir, you have a ‘Marie Antoinette’ complex

April 11, 2013

Now, everybody’s piling on Ron Johnson – the former Apple exec who flamed out trying to turnaround JC Penney.

He didn’t seem to value JCP’s employees (which might be understandable) .. and he didn’t seem to value JCP’s customers (ouch).

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One pundit says that Johnson’s downfall was his inability to connect with JCP’s core customers.

Mark Ellwood, a retail expert, says that Johnson’s obliviousness to the plight of his value-conscious customers begs comparison to another doomed leader.

“Ron had a Marie Antoinette-ish approach to the customers … He always seemed slightly embarrassed that he was dealing in middle market product.”

Like the “let them eat cake” French queen, Apple store prodigy Johnson could not relate to the people who will still coming to the JCP stores..

Penney’s customers became frustrated and confused when JCP stopped discounting merchandise.

Johnson’s alma mater, Apple, almost never has sales, but that approach doesn’t work for JCPenney shoppers, writes Dale Buss at Forbes.

“His attitude … was very much along the lines of ‘let me tell them what’s good for them,’ rather than ‘tell me what you want as a customer and let me see how I can achieve that.'”

“[Johnson should have gotten] to know J.C. Penney shoppers a bit before he decided to treat them all like eager iPhone buyers who are so enamored of the merchandise that they don’t pay any attention to price”.

Source

Bottom line: selling commodity rags is a bit more difficult than selling early generation  iPhones …

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Follow on Twitter @KenHoma                         >> Latest Posts

Fair & square … and outta there … JCP cans CEO.

April 9, 2013

Ron Johnson had a dream: turn JC Penney stores into Apple Store clones.

You know, cool and trendy … and, of course, no image-destroying sales.

Oops

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Not surprisingly, JCP’s sales, profits and share price fell, and fell, and fell.

Today, the JCP board axed Johnson … and, to add insult to injury, replaced him with the guy who had the job before he came.

Lessons leaned: (1) it’s a lot easier to sell iPhones than commodity rags, and (2) ask your customers and employees what they think

So what?

You can bet that he’s leaving with a pile of gold.

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Follow on Twitter @KenHoma             >> Latest Posts

OMG: JCP color-coding employees based on performance & potential …

March 7, 2013

News scoop from Business Insider:

“JC Penney Has Color-Coded Employees To Prepare For Future Firings”

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More scoop from the Insider:

JCPenney has split up its associates into categories based on their performance and abilities, according to sources inside the company.

Sources told us that … they were to categorize their associates into one of three categories:

  • Red — Remove from company
  • Yellow — Coach up or out
  • Green — Go forward

Managers were told to “be prepared to make decisions” in the months ahead.

Managers were also instructed to let them know if they weren’t performing up to par.

Workers are afraid that more job cuts are on the way, on top of the 19,000 workers eliminated since CEO Johnson started at the company.

“Is that really the best way to be ‘America’s Favorite Place To Work?'”

Question to Business Insider: This is news?

Well run companies have been sorting employees into ability and performance tiers fro decades … maybe centuries.

Remember Jack Welch’s policy of jettisoning the bottom 10% every year?

It would be more newsworthy if JCP didn’t have a performance management system.

Or, if JCP’s management just whined like the Obama’s Cabinet Secretaries that absolutely no cuts could be made with Armageddon.

See, that’s the difference between the private sector and the public sector

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Follow on Twitter @KenHoma             >> Latest Posts

Ken on NPR … about JC Penney (again)

March 4, 2013

JCP reported a loss of more than $500 million … ouch.

NPR asked for my POV…

click to listen

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Here’s the transcript …

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JCP: deals or no deals?

January 31, 2013

Answer: deals.

Earlier this week we posted that JCP CEO Ron Johnson insisted at an investor conference that Penney’s “marketing is really starting to connect” with customers … and that in 2013, Penney will become “a happening place.”

That was 2 days ago.  Then yesterday …

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According to USA Today: CEO Ron Johnson announced a strategic evolution to its plan to offer everyday low prices that customers could count on rather than the nearly 600 fleeting discounts, coupons and sales events each year.

What sort of “strategic evolution”?

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Want to cut your ad budget? … Simple, be Apple.

August 13, 2012

According to court testimony in the Apple v. Samsung patent trial …

Apple no longer actually needs to do ANY advertising when it launches new products.

So testified marketing chief Phil Schiller

Instead, the company relies on these two strategies:

  • Positive media  buzz, e.g. glowing product reviews.
  • Product placement in TV shows and movies.

The media is so reliably disposed to favor Apple’s products that when the iPhone was launched in 2007, the company didn’t do any advertising during a brief period after the device was introduced in January 2007 and when it went on sale later in the year.

“We didn’t need to.”

The rave reviews of the iPhone and iPad did a better job than advertising to build buzz.

Apple also relies heavily on product placement: “We love to see our products used by stars in movies and television shows.

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Memo to JCP CEO Ron Johnson: JC Penney isn’t Apple !

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JCP CEO: “You’re fired for not making my dumb idea work”

June 19, 2012

Michael Francis helped make Target a roaring success.  So, JC Penney CEO  Ron Johnson offered him a $12 million signing bonus to jump ships. Francis took the bait.

Bad decision …except for the $12 million … which Francis gets before the tax rates jump on Jan. 1.

Now, Francis taking the fall for Johnson’s “no sales” strategy’s failure to ignite consumer interest.

Johnson’s still claiming that his idea is fine but it wasn’t marketed right.  That there was a failure to communicate.

After all, a sleek logo and aggressive “retail list price maintenance” worked at Apple … so why shouldn’t it work at a commodity rag place like JCP?

Excerpted from BrandChannel:

J. C. Penney ousted its JC Penney brand president, Michael Francis.

Francis was hired last October “at great expense” — a whopping $12 million signing bonus — from Target.

He  is seen as taking the fall for his boss, company CEO Ron Johnson, the former Apple top retailer who oversaw JCP’s new brand strategy in January.

Johnson who championed the idea of killing coupons and sales in favor of “fair and square pricing” (a reference to its logo), so-called “month long value” and “everyday low” pricing.

JCP recently scrapped that strategy and is re-embracing the dreaded s-word — “sale.”

CEO Johnson “will assume direct responsibility and oversight of the company’s marketing and merchandising functions.”

Ken’s Take: If I were JCP, I would have fired the Apple guy and kept the target guy … eventually, they’ll fire the CEO, too … and probably promote their VP Finance to interim CEO … as soon as it becomes evident that the critical Christmas season is a bust

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In case you missed it, I was on NPR a couple of weeks ago commenting on the JCP strategy.

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Ken, was that really you on NPR last week?

June 4, 2012

Don’t faint, I wasn’t talking politics.

The topic on Marketplace was JC Penney’s decision to supplement their  “fair & square – no sales” strategy with Friday sales.

My predictable reaction:

Kenneth Homa: Well now their basic proposition is they’re not going to have sales, except for when they have sales.

Reporter: Ken Homa teaches marketing at Georgetown’s McDonough School of Business.

Homa: I don’t know how they can possibly communicate that clearly to any consumers

click to hear the 2-minute podcast or read the full transcript

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“Fair & Square” … except on Fridays … JCP throwing in the towels?

June 1, 2012

According to AdAge

JC Penney is ramping up its promotional messaging in the wake of a dismal first quarter.

The retailer has added "Best Price Fridays" to its calendar

Certain products are marked down on those days, and the lower prices are in effect until the product sells out.

"The additional Best Price Fridays equates to adding promotions and is a step away from the company’s pricing strategy, suggesting that the company is willing to forgo its original thinking."

Store associates also have been instructed to place stickers with new prices for best price and month-long value items next to, rather than on top of, original prices.

The new approach will better highlight savings for customers so that they can … "Do the Math" .

"The change in strategy is an admission that the company’s existing  pricing strategy has flaws — less than 120 days since Ron Johnson’s new model took course on Feb. 1."

In discussing first-quarter results, executives admitted there has been confusion surrounding its pricing strategy and lack of coupons.

Shocker: Shoppers like deals and find it incredible (i.e. not credible) when a promotions-intensive retailer claims to have “seen the light”.

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