J.C. Penney’s new CEO, former Apple executive Ron Johnson, boldly proclaimed the retailer’s plan to become “America’s favorite store” in a major presentation to investors yesterday.
I’m not a student of J.C. Penney and who knows if this new strategy will lead to profitable growth. Retail is TOUGH. But, after reading the initial news report, and then watching Johnson’s presentation, a few points really stood out to me:
I like the company’s new mindset.
We’re fine with growing old. We’re not fine with growing stale.
We’re rethinking and reimagining, and if we find that we’ve picked-up any bad habits over the decades, we’re going to leave them far behind.
Ron Johnson, CEO, J. C. Penney Company, Inc., 1/25/2012 Investor Presentation
I like the direct, fact-based, straightforward way Johnson presented the reasons for the change and the plan itself.
He was comfortable and came across as credible. See for yourself here.
I like the way he studied about Penney before he actually started the job.
Johnson explained how he signed-up to receive the company’s emails, and then detailed fourteen different types of promotional offers he received. He later asked and was told there were 590 unique promotions offered in 2011, which resulted in an average of four customer visits. This, he said, meant that 99% of the customers were ignoring Penney. All told, Penney spent more than $1 billion on promotions last year, which Jonson described as a “discount to a brand.” His conclusion: “It just doesn’t work.”
So, effective February 1st, the company is relaunching, which will let consumers see the results of Penney’s plans to fix three operating areas: price, promotion and personality. I’m particularly intrigued to see how two components play out:
“Re-invent the jcpenney store experience, to include Main Street — the entire store merchandised in a series of 80 to 100 brand shops, rather than the confusing and seemingly endless racks common in department stores today.”
And this: “Town Square — an exciting new place that replaces the traditional retail center core of a department store with a series of services, which customers will enjoy before they buy, while they shop and afterwards.”
Be prepared, get your facts straight, size up the challenge, and take your best shot for however you define growth and success. Sure, it’s a cliché, but don’t be afraid of change. Just make sure it’s smart change.
Harvey Chimoff is a hands-on marketing leader and business-wide collaborator who builds marketing capabilities in B2B/B2C organizations that drive customer success.