Many of the changes JC Penney’s CEO Ron Johnson announced on January 25, including a new pricing strategy, began rolling out in stores nationwide yesterday…and all eyes in the marketing industry are watching.
While some are anticipating, even cheering failure, I, for one, hope he makes it. What JC Penney’s is doing under Ron Johnson’s leadership, may have huge implications on the department retail industry as a whole.
The biggest overhauls are yet to come, but the changes in pricing and promotions mark a dramatic shift in focus from product to customer. For example, with fewer one-off promotions (more than 500 in 2011 alone), and more predictable sales and price structures, JC Penney is making it easier for customers to get the best deals on their schedules – something we’ve come to expect in our Groupon world.
Essentially, J.C. Penney is attempting to make the department store relevant to the customer once again. The customer experience isn’t something retailers have had to think about in the past – it used to be the visit to the department store WAS the experience.
The department store still holds a treasured place in our consumer culture. There will always be something special about wandering the different sections, trying on and trying out new things, and walking out with the shirt or the product that fits best. It’s an experience that online shopping just can’t offer.
But times have changed. We have more options as consumers than ever before, and we’ve come to expect different things. In today’s digital age – where people are shopping while juggling multiple mobile devices – to matter more, department stores will have to combine the emotional experience of in-store shopping with the convenience and customization online retailers are able to offer. That means more personalized stores, more options for social engagement, and competitive pricing.
Johnson appears to get it…he’s done it before leading Apple’s retail stores before coming to JC Penney in November 2011. (You can see his full resume here). Time will tell if the Apple store format can translate to the department store, but I think it’s worth the try.
Even if Johnson achieves overwhelming success, the reality is, online shopping is not going anywhere. Consumers will continue to look for the greatest value in both cost and time spent, no matter if it’s online or in-store…or both at the same time.
But the company’s $800 million bet that shoppers will take another look at the department store experience this year is worth the gamble. And if Johnson is right, the pay off could be huge.