The strange journey of JC Penney's brand overhaul seems to be an example of how not to retool your core offerings.
I was very interested to see what was going to happen to a retail brand that was never considered cutting-edge even at the height of their success in the 60's and 70's. JCP, as they are now known as, had always been a leader in discount merchandising. The company used coupon and clearance sales extensively and it's customers became accustomed to hunting down the deals.
Fast forward 40+ years. JCP hires Ron Johnson the former CEO of Apple Stores to push the stuffy brand into the modern age. Out go the discount pricing and clearance racks and in goes stylish modern fixtures and a new pricing system, "Every Day Deals".
Instead of discounted sales throughout the store, Johnson put in place "Monthly Values" on certain items in each department and "Best Price" specials tied to paydays (Fridays). In addition, the clothing lines were completely retooled into different shops. Fits were modernized to an extreme and customers quickly complained that their normal cuts were now in the Big and Tall or Plus Size departments.
All of this was done within 12-18 months after the announcements and the new hires. Did it work? Well, not really. The company continues to post massive losses and Ron Johnson was fired with his predecessor, Mike Ullman returning in the interim until a new CEO steps up for cleanup.
What's the lesson here? What did they do wrong?
It seems to be a situation of too much, too fast and without customer participation. In this age of instant measurement and social media, someone was feeling left out. And that someone was the one who paid the bills, the customer.
Immediately with the launch of the new lines with a new spokesperson, Ellen Degeneres (a former employee of JCP) there was a furor in their social media space. A conservative group flooded their Facebook page with criticism of the spokesperson and even the retooled clothing lines. The criticism was organized and with strong frequency.
This past month JC Penney has made an apology in a touchy-feeley commercial.
How could they have avoided this.
1. Support fundamental changes with employee training.
Brand confusion starts at home. Employees need to understand what the major changes that will affect their customers will be and how to instantly respond to the criticism. Both in your brick and mortar stores and within social media.
2. Don't throw out the baby with the bathwater.
Measure where your core success has been in the past and develop new strategies around it. If JC Penney had polled it's customers they would've found that they enjoyed the hunt for bargains and the accomplishment of finding a hidden deal. The new structure took all of that away and left a very different shopping experience.
3. Don't suddenly change your product's promise.
The fit that caused fits. The retooling of the mens department meant super skinny cuts for a young, fit crowd. The customers were angry and rightfully so. People that were used to buying for everyone in their family without them coming into the store and people buying online were returning merchandise in droves. Instead JCP should have phased in their in-store Shops slowly without completely shutting down their most-popular lines such as St John's Bay.