Is JC Penney’s Makeover the Future of Retailing?
Is JC Penney’s Makeover the Future of Retailing? Kim Girard, Harvard Business Week, March 2012
The over a century old retailer JC Penney (JCP) has been losing business and customers for a long time. Though it once had a great reputation for value and loyal customers the competition of high volume, low value stores such as Wal-Mart or the higher end stores such as Macy’s have completely over taken it and threatens to force them out of the market. What can be done to revive the 110 year old retailer, who is the right person for that task and how will they do it? These questions were addressed in this article. In the article “Is JC Penney’s Makeover the Future of Retailing”, the author (K. Girard) focuses on Ron Johnson, the new CEO of J.C. Penney and his innovations and plans to transform the store. Mr. Johnson comes to JC Penney with an impressive record of success transforming businesses and their retail strategy. He is credited with the transformation of the Target chain and for leading Apple’s retail effort with such innovations as the Genius bar.
The task faced at JCP is a huge one, the company has been experiencing lagging sales and financial losses of $87 million in the final quarter of last year and a 4.9% overall loss of revenue for the year.
Mr. Johnson took the helm of the company in November of 2011. His main task in to reinvent the chain and focus on an all new client base that includes everyone as his target market. Of the innovations that he instituted immediately, he focused on pricing and making them what he termed as “fair and square”. To do this, he first eliminated sales (he called them insulting to the customer), he also eliminated coupons; a move a competitor had attempted unsuccessfully about 5 years earlier. Another innovation in pricing was to end all prices in “00” instead of “99” and take away the “suggested retail price” tag. All of these changes were done to change the perception of the customer, from waiting until an item
The over a century old retailer JC Penney (JCP) has been losing business and customers for a long time. Though it once had a great reputation for value and loyal customers the competition of high volume, low value stores such as Wal-Mart or the higher end stores such as Macy’s have completely over taken it and threatens to force them out of the market. What can be done to revive the 110 year old retailer, who is the right person for that task and how will they do it? These questions were addressed in this article. In the article “Is JC Penney’s Makeover the Future of Retailing”, the author (K. Girard) focuses on Ron Johnson, the new CEO of J.C. Penney and his innovations and plans to transform the store. Mr. Johnson comes to JC Penney with an impressive record of success transforming businesses and their retail strategy. He is credited with the transformation of the Target chain and for leading Apple’s retail effort with such innovations as the Genius bar.
The task faced at JCP is a huge one, the company has been experiencing lagging sales and financial losses of $87 million in the final quarter of last year and a 4.9% overall loss of revenue for the year.
Mr. Johnson took the helm of the company in November of 2011. His main task in to reinvent the chain and focus on an all new client base that includes everyone as his target market. Of the innovations that he instituted immediately, he focused on pricing and making them what he termed as “fair and square”. To do this, he first eliminated sales (he called them insulting to the customer), he also eliminated coupons; a move a competitor had attempted unsuccessfully about 5 years earlier. Another innovation in pricing was to end all prices in “00” instead of “99” and take away the “suggested retail price” tag. All of these changes were done to change the perception of the customer, from waiting until an item