Watch Your Penneys
By Mark Kalaygian
May 2, 2013

A few days ago, JCPenney introduced the commercial below, which basically apologizes to shoppers for the department store retailer’s misguided machinations over the past two years. 



 

 

The new ad comes on the heels of the ouster of embattled JCPenney CEO Ron Johnson, who is widely blamed for the company’s recent struggles. And while Johnson’s nearly two-year tenure turned out to be disastrous (and possibly fatal?) for what was once a strong retail competitor, it can serve as a valuable cautionary tale for retailers everywhere, including those in the pet care channel.

 

Now, let me be clear: JCPenney was having trouble before Johnson joined the company in June 2011. Earlier that year, for example, it announced that it was getting out of the catalog business and closing all 19 of its catalog outlet stores, as well as seven other locations. However, Johnson’s strategies for returning JCPenney to its former glory were tantamount to throwing gasoline on a fire.

 

Coming to the department store retailer from Apple, where he was credited for the idea of Apple Stores and the Genius Bar, Johnson’s pedigree seemed indisputable. But it is likely that his reputation as a retail genius ultimately doomed the executive to failure. It seems that nobody, including Johnson himself, ever took a moment to openly question his strategies, even when he decided to roll out significant changes with little or no testing with the chain’s customers and store staff.

 

The lesson that Johnson’s experience at JCPenney offers to other retailers isn’t necessarily about the specific strategies that he implemented—although his concept of eschewing sale prices clearly did not strike a chord with shoppers, who are increasingly looking for special deals in today’s troubled economic times. The real lesson comes from Johnson’s rush to reinvent the chain without taking the time to make sure that the changes he was instituting were the right changes. Making matters worse, whenever one of these changes failed, the response was a similarly heavy handed and untested.


Now that the Johnson era is over at JCPenney, there are all sorts of stories coming out about how his approach not only drove away customers, but also alienated the company’s staff. And retailers who follow his example can expect similar results.

 

Of course, when your retail business is in trouble, instincts will tell you that changes must be made—and the worse the trouble, the more tempting it will be to make those changes bigger and implement them faster. But changing a retail business isn’t a process that should be rushed, and the undertaking should be closely evaluated for its chances at success.

Like Johnson, a storeowner may be prone to feeling that past success means that his or her opinion is the only one that matters. But while the owner of a business should ultimately be the one making decisions that will significantly impact its future success, listening to customers and employees opinions on changes being considered can and will be invaluable in ensuring that they will produce the desired results.