America’s Favorite Store?
JC Penney announced it’s new strategy on Wednesday. At a highly anticipated, star-studded presentation, new CEO Ron Johnson promised to reinvent the “6 Ps” of retail (product, place, presentation, price, promotion and personality). Will it work?
In a world of seamlessly integrated, omnichannel, open commerce platforms, critics may fault this predominately bricks & mortar approach for being old-fashioned and stuck in the past.
However, this refreshingly honest, back-to-basics approach may be just what retail needs right now – a reliable, relevant, and easy experience.
From their spirited manifesto to their tongue-in-cheek TV ads, the JCP crew seems to be very in touch with who their customer is and what they need:
· In response to a growing distrust of institutions, JC Penney’s voice is human, honest and direct
· In a world where consumers demand more transparency and authenticity, their pricing strategy is simplified and predictable
· And during a time when our nation’s role in the world is at question, their Main Street and Town Square in-store strategy conveys a distinctive American pride and point of view
If nothing else, this strategy speaks to the promise of a visionary leadership. In stark contrast to last year’s logo “bake-off” which resulted in an identity redesign from a 3rd year graphic design student, JC Penney’s new strategy is decisive and bold – not to just be America’s favorite department store, but to be America’s favorite store.
The track records of the brand architects are hard to dispute. CEO Ron Johnson, former head of retail at Apple, did the unthinkable by translating the magic of Macs and iPods into over 300 worldwide stores and transforming our expectations of a good retail experience. And President Michael Francis, former CMO of Target, built a brand that turned a Midwestern mass merchandiser into a seductive, exciting cultural tastemaker.
Beyond their credentials, the speed at which they brought the strategy to life is also a tribute to their vision and focus. Johnson’s arrival was announced in June 2011 and madeofficial in November 2011. Francis came on board in October 2011. In less than three months, they were able to crystallize their thought, mobilize a huge internal and external team of partners, and captivate the retail industry with their announcement.
Initial reactions are mixed. Stock prices fell slightly after the announcement. But if anyone can do this, Ron Johnson is a good bet. Especially since he has financial skin in the game - $50 million to lose but hundreds of millions to win.
However, success depends on a lot of “ifs.”
IF the merchandising and in-store experience can deliver on the promise of the advertising.
IF the vendor community will play by their new pricing rules.
IF the customer understands and embraces the new promotional calendar.
This will be fun to watch – if they can really pull it off, the streets will be singing their praises as prescient retail gurus. If not, sadly there will be one more once-great retail giant put out to pasture.
Which outcome are you betting on?
