NETTING IT OUT

JC Penne’ is facing some hard times. Not only are business and stock prices way down, the golden boy from AppleStores, Ron Johnson, has been ousted after only 17 months on the job and is being replaced (for now) with the man he replaced!

Johnson made a lot of changes in his short stint at JC Penney, including rebranding the company as jcp. But his elimination of all sales and discounts in favor of “everyday low prices,” combined with a boutique store-within-store model for trendy designer brands, fell flat with the company’s traditional customer base.

That started us wondering if the online site, jcp.com, might play a role in resurrecting the brand. In this Customer Experience Audit of jcp.com’s capabilities to let customers find and buy what they want and manage their relationships, we look at how well it meets a customer’s scenario.

Unfortunately, although the site has some high points, jcp.com is as limited and stodgy as the outdated stores that carry the same brand.

Jcp.com Home Page

© 2013 jcp.com and Patricia Seybold Group Inc.

1. The jcp.com home page provides scrolling ads for discounts, sales, and featured brands. Note the navigation bar (circled in red) for “Brands We Love.”

BOOMERANG JCP EXECUTIVES

Some History

Founded in 1902 by James Cash Penney as a dry-goods store in Kemmerer, Wyoming, and was incorporated as JC Penney in 1913, a chain of American mid-range department stores based in Plano, Texas. The company introduced its online store (now, jcp.com) in 1998.

Like many retail chains and brands that appealed to middle Americans during the 20th century, the former retailing heavyweight is now floundering as people stopped going to malls as frequently and as ecommerce has exploded. The company was losing money and stock prices were going down. Something had to be done to turn things around.

Ullman Out: AppleStore Superstar In

On November 1, 2011, JC Penney kicked its seven-year incumbent chief executive, Myron “Mike” Ullman, out and replaced him with Ron Johnson, the hero who, according to UK’s The Guardian, “made Apple’s stores cool places to shop, and before that, pioneered Target's successful ‘cheap chic’ strategy.” Recruited by hedge fund manager Bill Ackman, a Penney director and the company's largest shareholder, Johnson was brought in to revitalize “a chain that had gained a reputation in recent years of having boring stores and merchandise.” The Guardian went on to say

“Few questioned Johnson's savvy when it was announced in June 2011 that he was leaving his role as Apple's senior vice-president of retail to take over the top job at Penney,

Under Ullman the chain brought in some new brands such as beauty company Sephora and exclusive names like MNG by Mango, a European clothing brand, but he didn't do much to transform the store's stodgy image or to attract new customers…"[Ullman] did nip and tuck surgery," said Craig Johnson, president of Customer Growth Partners, a retail consultancy. "But this was a place that needed radical surgery."

~ The Guardian

The introduction of Johnson as JC Penney’s savior was impressive, as reported by Financial Times:

“In front of a glowing blue video wall set up to evoke fresh air and clear skies, Ron Johnson made the case for why he was the man to revitalise JC Penney, the fusty US department store. “I feel like this is the exact time at JC Penney as when I joined Apple,” he said, recounting his explanation to Steve Jobs when he announced he was leaving the technology company. To the 700 or so in the audience, the message was clear: Apple came back from a death spiral, and JC Penney could do the same.”

~ Barney Jopson, The Financial Times

Johnson’s Strategies for Change

During Johnson’s tenure at jcp (the rebranding of JC Penney that he introduced), he focused on two strategies:

• Eliminating the retail chain’s coupon and sale event heavy pricing model touting everyday low prices (famously promoted on TV by Ellen Degeneres)
• Attracting a younger customer base by introducing shop-in-shop (in-store boutiques) of trendy designers

But his strategies didn’t result in the improved sales and younger audience he had hoped for. And, earlier this month, Johnson was let go in favor of bringing back former company leader Ullman.

Customers React to JCP Changes

The big problem was that Johnson’s changes didn’t take into account the loyal JC Penney customer base. It is an older audience who remembers the brand’s heyday, and who are now in their 40s, 50s, and 60s; they are middle class or lower who are looking for good, but not trendy, products at great prices.

In a terrific article in Forbes, entitled JC Penney Shoppers React to CEO Ouster, customers let their thoughts be known:

“I’m a Mom of two boys, now grown, who were raised on J.C. Penney shopping sprees. We went to all the back-to-school, holiday and post-Christmas sales, and I’m a J.C. Penney cardholder. I was raised on J.C. Penney, too.

While J.C. Penney needed a change, pulling the rug out from under their promotions that we, the customer, were used to, was a big mistake.

That’s what drew me in. Plus, I never believed the ‘everyday low price’ when Ellen Degeneres was touting it in their commercials.

Then, the upscale mini-shops were not appealing to me. Why? Because the J.C. Penney brand, to me, meant that I could find my basic things — t-shirts, jeans, kitchenware and more — in the right size/color, virtually all the time. I don’t want Martha Stewart-looking stuff.”

~ Dana Manciagli, 52, career coach, Seattle, Washington

“I’ve been a customer of J.C. Penney for 34 years.

At 19, it was the very first credit card I received to help establish my personal credit rating. To say I am pleased with Ron Johnson’s departure is an understatement. I am thrilled he’s gone and Mike Ullman is back at the helm as CEO.

In his quest to cater to younger shoppers, Ron Johnson alienated the primary age group that was Penney’s loyal customer, the over 40 woman...

~ Cecile Reszka, 53, retired accounting clerk, Buffalo, New York

Downoad the PDF to continue reading Cecile's comment and the entire article.