JC Penney is in the news again. It’s becoming a habit, and I’m not sure that’s a good thing for it. I’ve personally written three or four blog articles for our website trying to explain the constantly changing strategies of this 111-year-old retail icon. I’m beginning to think it’s a lost cause. The obvious reason for the constant change seems to be emerging as one of simple desperation.
JC Penney offers a unique history which may very well explain its comfort with constant change.
- It once housed several leased departments such as Sephora, Seattle’s Best Coffee, optical centers, portrait studios, jewelry repair and firearms. It also had hardware and automotive departments as well as auto repair shops.
- It was once the largest catalog retailer in the U.S.
- In 1940, Sam Walton began working at a JC Penney in Des Moines, Iowa. Walton later went on to found future retailer Walmart in 1962.
- In 1962, JC Penney entered discount merchandising with the acquisition of General Merchandise Company which gave them “The Treasury” stores which shuttered its doors in 1982.
- In 1973, JC Penney reached its peak number of stores with 2,053 stores. It now has just over 1,100.
- In 1984, JC Penney acquired the First National Bank of Harrington, Delaware and renamed it JC Penney National Bank. With the bank, the company became able to issue its own MasterCard and Visa cards.
- After several years of development, the JC Penney Television Shopping Channel appeared on cable systems beginning in 1989.
- In 2004, the company exited the drug store division after 35 years, with the sale of its Eckerd division, which was later taken over by Rite Aid.
If you happened to read my previous blog articles about JC Penney, you’re aware of the fact that it has been trying some new and creative approaches in hopes of increasing sales, profits, and customer count after several years of declining performance.
While many call its recent efforts creative, others call them radical. I shared many of them in my previous articles, and they certainly do approach “radical”! This strategy began in November 2011 when it hired the former Apple retail head, Ron Johnson, as its new CEO. In an effort to overcome a certain dowdiness in its stores, marketing, advertising and culture, Johnson made too many changes far to fast for both employees and customers.
Sales and stock value fell regularly for a year and a half, and something had to be done. Customers were staying away in droves. In early April of this year, it was announced that CEO Johnson had been fired. It was then announced that the retailer’s former CEO will be his interim replacement. I questioned that decision in my last article.
However, JC Penney quickly made another decision that I find myself questioning even more. Maybe you’ve seen it on TV. It released an ad campaign begging its customers to return, implying very strongly that previous CEO Ron Johnson messed up. JC Penney said its many problems were caused by the man with the weird ideas it had hired from Apple. He made them do all those things that drove customers away all over the country.
The ad basically said:
“So now that he’s gone, please come back. We beg you. We’ll be the old JC Penney. The one you all loved. Although maybe you didn’t all love it enough to keep shopping there, which is why we hired the man with weird ideas from Apple. But we were wrong. You were right. Well, many of you. We think. What matters with mistakes is what we learned,” whispers the contrite female voiceover. She continues: “We learned a very simple thing: to listen to you.”
Now we’ll see if that approach was tremendously courageous and creative or total stupidity. YOU will make that decision. It’s rare for an advertiser to so boldly go down upon both knees to beg its customers to come back, implying rather strongly that the previous CEO was a little too high-fallutin’ for the common retail customer.
Personally, I think JC Penney failed to listen to its customers, it made too many mistakes in a very short period of time, and today’s customers have too little patience and too many other choices at their beck and call. We’ll soon see.
Take a look at the TV commercial and see what you think.
More importantly, learn something from JC Penney’s situation in hopes of avoiding such challenges.