Kudos to the JC Penney Board of Directors (www.jcpenney.com) for removing CEO Ron Johnnson from office. I’m practically euphoric over the news. It’s as if 17 months of aggravation are off my shoulders. My husband can stop whining about how he used to buy all his clothing -- from underwear to outerwear -- at Penney’s BJ (before Johnson).
I no longer need to go into teacher mode with friends and strangers, lecturing about how Johnson slapped his loyal customer base in the face with marketing tactics that threw them out of the store, along with basic marketing principles. Or, how he incorporated sales tactics that don’t work for many industries.
More on that in a minute. I want to vent my personal perspective and each of these comments play into the marketing rules flouted over the past year, completely ignoring the fact that some marketing rules are irrefutable.
Customer Loyalty Counts – in Any Business
I have been a loyal JCP customer ever since I can remember. Growing up in a small town, my parents took us to JC Penney to shop. That means I have had a JC Penney credit card for longer than I can remember. Not as long as my Macy’s account, but still a long time. I have shopped these two stores for virtually every outfit I wore. During the ‘80s, when women were wearing masculine-cut business suits with stiff blouses that sported a bow to show some femininity, I’d stop at JCP and know that they’d have the latest color and style in stock, in my size and probably on sale. And, most importantly, in a quality brand that would wear well through travel and trade show, not just the office.
Jump to 2012. A new dawn for JCP under Johnson management. Business is casual, I’m older (no – really -- I am), and “casual” means “classic” to me. But not to the newly revamped JCPenney. Over the past year, the store is geared to a what appears to be 18- to-25-year-olds. The clothing looks like it’s sized for skinny people who can wear a size 00 to 04, have long legs, and no shape. And I’m saying this from the perspective of a size 08! Worse, my go-to brands like Jones of New York and many others were thrown out, while still carried at stores like Macy’s and TJ Maxx. So where did I start shopping last year? I added TJ Maxx to my increased visits to that good, old, savvy marketer, Macy’s. (And, please note, ‘old’ is a good thing.)
Enough about me. Let’s get to the marketing lessons. Some marketing rules aren’t just rules. They are tenets. That means they are principles, doctrine, dogma. Whether your business and brand are big or small, these principles still hold. Here are the marketing tenets I saw shredded and tossed away in the past year.
Rule: Always protect your cash cow.
In retail, the cash cow is the moneymaking customer base. JC Penney had been successful because it has catered to every age group, from tots to totterers and every age in between. Teenagers could buy prom dresses designed in the newest styles, colors, and sizes next to women looking to be mother of the bride. And everyone could walk away happy.
Johnson changed this model. He tailored every brochure to young people. One online article I read said that he was trying to cater to young people and not ‘your great-aunt’. The commentator of the quote, I think some analyst, mentioned something about said great-aunt wearing suits with big brass buttons. I can’t find the quote, because I think the site changed it, but the point is this – AND TAKE NOTE – Great-aunts are not what they used to be.
Those of us who are at the age to be great-aunts are a strong, feisty bunch who will not be messed with. We’re the ones who marched for one side or the other during the Vietnam War. We’re the ones who fought for civil rights twice, in 1963 and in 1974. We’re the ones who helped end a presidency. We’re the ones who fought for women’s rights and protecting the environment. And we did it all while earning degrees, advanced degrees, getting married, having kids and becoming successful business people.
But Johnson forgot this rule. The choice JCP gave older women was this: buy what the young girls wear or buy Alfred Dunner. Now, I have nothing against Alfred Dunner. But I’m not ready for elastic waistbands yet.
Rule #2. It takes money, time, and more money to reinvent vocabulary and/or concepts.
Last year, the word ‘sale’ became verboten in Penney parlance. It was replaced with the term ‘best price’. You know what best price means? It can mean anything, from this is the best price we can offer to this is the best price you’ll find anywhere. But in 2012, at JC Penney, it became code for ‘sale’.
Months were color-coded. You could buy something in last month’s color at the best price. Now, I don’t know about you, but I have a lot to think about and remember during the day, without adding one store’s color code to the list.
So, what did we do when we scanned the newspaper ads? We scanned the JCP ad to see the latest teens wearing their skinny, short dresses, and then scanned the other stores’ ads, clipped the coupons and went shopping with our pockets stuffed with special codes and discount offers.
The word ‘sale’ is as basic to retail marketing as apples are to apple pie. Did I really need to tell you that??
Rule #3. Sell what you have. All of it.
A recent JC Penney ad showed towels and some household items in the back of the brochure. I can’t remember the last time I saw anything beyond clothing in their ads. Retailers need to feature all of what they have, even if clothing is what brings someone into the store. Remember, shoppers don’t know what they need or want until you show it to them. Anyone who’s browsing is looking for ideas.
Rule #4. Being ‘old’ doesn’t mean being stagnant, unsuccessful or, worse, a pinch-penny.
JC Penney had a successful business model. While they needed to reach out to new, younger customers, they needed to protect their primary audience of older shoppers, while attracting the younger base. Revamping the look of the store is one way. Hiring younger merchandise buyers and sales staff is another way. Trendy clothes are another way. There are lots of ways, too numerous to mention. But, throwing an entire formula away isn’t the way.
I admit to being the generation that advocated not trusting anyone over 30. But now that I am over-30, I am proud that we are an active, intelligent, and determined bunch of people. We know what we want and we’re ready and able to buy it. And we want it now.
With the change of leadership at JC Penney, I’m hoping that the Board of Directors realized that the drop in revenues/earnings at the retailer wasn’t just a financial blip on the screen. It was the voice of customers, who, in the end, are the real investors in the company, saying that things had just gone wrong.
JC Penney has the opportunity to fix their business and marketing model, because it has enjoyed a loyal customer base. I, for one, am ready to dust off my JC Penney credit card and return. If it is worth it.
~Barbara Kalkis, Maestro Marketing & PR(sm).
The above are personal remarks.