How hard is it to reposition an established brand? Ask Ron Johnson, the former CEO of J.C. Penney. Johnson was recruited from Apple to make over the fading retailer in 2011. His bold vision for the new JCP included mini-stores or boutiques within the larger store. Most of these featured established celebrity brands such as Martha Stewart, Sephora, Michael Graves, and Gordon Ramsey. I decided to tour one of his remade stores to posthumously evaluate his strategy.
What I saw was really impressive. Colors were bold and vibrant. Signage was clean and crisp. The concept of moving from one boutique display to another made for an engaging shopping experience. I saw evidence of Target’s strategy of high design coupled with modest prices in the merchandising. That makes sense considering that Johnson was once a senior marketer at Target.
I also saw a genius bar, the concept he invented while at Apple. Unfortunately, this one was deserted and when I asked a sales associate what is was used for, she told me, somewhat sadly, they had planned to do cooking demonstrations there. Now, she wasn’t sure.
In case you haven’t been a JCP store recently (okay, that’s probably most readers), I snapped a few more photos from my visit to give you an idea of what Johnson’s vision looks like. I have to say that I was really impressed and would definitely shop there if the concept continued. Of course, that’s not going to be the case since new/old CEO Mike Ullman is purging everything from the Johnson era in an effort to go back to the future.
So what went wrong for Ron Johnson at J.C. Penney? Journalists, marketers, and business analysts are all weighing in. The mistakes cited most frequently include moving too fast to change the culture, not testing the new concept, failing to get employees to buy into his vision, and eliminating coupons and sales in favor of everyday low pricing. Any one of these could undermine a rebranding effort, but combined, they produced some terrible financial results in the 17 months that he led the firm.
My choice for worst mistake would definitely be eliminating the coupons and special offers that are common these days in retail. As a dedicated Macy’s shopper, I respond to these coupons and bundling offers. Just last week, my wife and I added two items to our purchase in order to hit a 25% discount level at $100. As a marketer, I understand why you don’t like to offer deep discounts on the great brands and products that you stock, however the reality for mainstream retailers is that consumers have been conditioned to respond to promotional offers especially in a weak economy. Swimming against this tide is okay for a company like Apple with its premier image. It didn’t work so well for J.C. Penney.
I left the store feeling that Johnson had created a unique retail experience that stands out in a conservative landscape. If JCP had been a startup company with no previous history or customer base, his concept might have been wildly successful. In the end, his vision didn’t resonate with the traditional Penney’s customer and he didn’t have enough time to attract new customers to his stores.