Steven Dennis made some interesting observations about JC Penney on his blog. He might very well be proved right – the JCP turnaround is no sure thing – but I thought I’d like to react to some of the points he raises, which I’ve placed in bold.
No doubt Ron Johnson learned much from his Apple experience, but little of it is directly translatable to JCP.
Johnson has success at both Target and Apple. I’m going to start from the basis that he knows a thing or two about retailing. Having seen Guy Kawasaki’s , I am convinced that there are many many transferrable skills that can be learnt be transferred to JCP. In fact, it’s Johnson’s approach to the turnaround looks to me a very “Steve Jobs” way of transformation, rather than a conventional approach.
It’s too early to say. Either Johnson will bankrupt JCP, or else he really will transform the way people think about shopping. We need to wait for two years to find out which one it is going to be. If I’m being optimistic, then Ackman’s choice of Johnson is total genius, and he will approach things in a way nobody else would ever dream.
JCP’s products serve a more diverse demographic, are in totally different pricing segments, serve a wide variety of purchase occasions and, by and large, are frequently purchased.
What, you don’t like it that people make frequent purchases?
JCP has many poor, under-maintained locations and most are multiple levels with multiple entrances
The under-maintained locations might pose a problem. What’s the problem with multiple entrances?
Apple stores are supported by hundreds of millions of dollars in parent brand advertising; JCP must fend for itself
He makes it sound like JCP doesn’t spend any money on advertising.
Mall-based department stores have been losing share to general retail for decades. The competition is intense. For Penney’s strategy to work they basically have to double their share on the mall.
This will be the challenge for JCP, and a test of Johnson’s creativity. He has to figure out a way to make JCP both unique and valuable. They don’t have to double their share on the mall, what they have to do is make a unique offering that others wont or can’t copy. Will he do this – nobody knows for sure – but there are signs that Johnson is on…
