Eye on Retail: Ask First, Launch Second
Poor J.C. Penny. First, things are really looking up when they hire a true Big Gun to take helm as CEO – none other than former Ron Johnson.
Small retail business owners may not be able to recite the “Who’s Who” of top big box executives, but all (OK – most) small retail business owners are well aware of Steve Jobs and his Apple stores. But it wasn’t Jobs that came up with Apple retail stores. Rather it was Johnson, then Senior Vice President of retail operations for Apple. He is also credited with branding tech support within Apple stores as the now ever so famous “Genius Bar.”
Likely the hire was prefaced on the notion that Johnson was going to transfer his genius over to J.C. Penny. After all, isn’t being a retail genius at Apple a transferrable skill?
It appears the answer to that question is: not always.
The Buck Stops Where?
The webosphere is replete with oodles of articles and posts conducting a post mortem on what went wrong with J.C. Penny’s launch of their re-brand. Including the fact that President of Branding at J.C. Penny, Michael Francis, has left the building – and Francis was no small fry. He’s the man whose branding expertise took Target from “cheap stuff” to “cheap chic.”
Hard to tell from the floor of your small business retail store whether the buck should have stopped at Johnson’s desk rather than Francis’s – but this post isn’t about playing the blame game. Nor is it to dazzle with statistics and charts explaining J.C. Penny’s misfire using cool graphics and confusing corporate-speak commentary.
Complicated analysis or graphics have their place, but it’s pretty simple to explain what went wrong with the J.C. Penny brand re-launch:
- They re-branded on price.
- They re-branded on price before talking to their customers about it.
- They re-branded on the basis of what worked at another company.
- They re-branded on the basis of what worked at another company without asking their customers what they thought about the idea.
As for #1, you never re-brand on price. Bad idea no matter how you look at it, but what is interesting in the case of J.C. Penny is that their message wasn’t “We’ll beat the competition’s price.” The message was more “We won’t confuse you with exactly how much things cost.” This backfired as it turned out to be a rather confusing message for J.C. Penny customers. What happened? After all, it worked at Apple.
Apples and Oranges…IPod’s and Lingerie
Apple customers ate up the “no haggle, the price you see is the price you get” approach to pricing – but what Apple was selling is likely the reason why.
Apple stores sell different kinds of technology product – but it is ALL technology. Deciding which type of technology you want to purchase is difficult enough – simple, straight forward pricing met a customer need to streamline a complicated buying decision and motivated them to buy.
J.C. Penny sells all sorts of things. This might have been their first clue to take a harder look at the “simplify pricing” scheme. Different types of products mean different types of customers. What worked for an apple might not work for an orange. Simplest way to find out whether it could work? Ask the orange first.
So the moral of the J.C. Penny fiasco isn’t “Even when you have the best team at the helm you can still make mistakes.”
The moral of this story is one every small retail business owner already knows –
“The customer is always right.”