4 ms·

I wonder if he did the same thing at JC Penny when he was running it into the ground.

by tssva 4y ago

wnevets 4y ago
In his defense shoppers wanting stuff to appear to be on sale is pretty dumb.
- lotsofpulp 4y ago
  Using an incorrect model of your clientele’s behavior and emotional responses is even dumber. Of course, I would have made the same mistake as Johnson. But it is always a good reminder of how differently people’s brains work.
- agloe_dreams 4y ago
  The hardest thing for that was that for him to succeed he really needed to play the long game. JCP was and still is eternally screwed. Mall retail is pretty much doomed to die and the ever increasing sale ratios are a side effect of attempts to 'growth hack' their way out of the inevitable. The fact of the matter was that JCP was more expensive than Walmart for, effectively most of their main brands, the same product. Sales allowed JCP to pretend their product is 'worth more'. The problem became a race to the bottom though. Once you say a store-brand Polo should cost '$69.99' but is on sale for $24.99, you start to tell your customer "Our products are overpriced." As ultimately, your product still is more expensive than the $14.99 Walmart product. By removing the price war, pricing their product at value. You now can compete on a more simple message of quality: "Our product is worth $10 more because X". The best part of this is...that's exactly what Walmart is actually doing. Walmart is actually rather sale-resistant and they frame it as a 'rollback' rather than X% off. Walmart's message is purely the regular price, not the value. The issue you of course run into for JCP though, is in the interm, as the market changes, you need to throw a bunch quarters made up of that built up growth hacking debt of ever increasing sales in the trash. That just won't fly on Wall st. What JCP really need is a reboot though, they are doomed either way due to their leases. Organizationally, I would be trying to get rid of those as fast as possible and get into outdoors small-medium retail. They have a great brand but have insanely expensive locations.
Brendinooo 4y ago
I didn't see it that way. He took a big swing to do something different and was fired less than two years into it. Maybe you could argue that he was straining against something too strong to overcome or misapplying his lessons from a higher-margin brand, but it's also possible to say that he wasn't given enough time to see it through. It's like if someone would have taken over Kodak at the turn of the century to go all-in on digital. It would have hurt the company in the short term and kicked against their core business but maybe they would have come out on the other side better off. Impossible to say if the scenario isn't allowed to happen. His tenure coincides with the beginning of the decline of department stores in general, so you'd have to show that JCPenney fared uniquely worse to say that he ran it into the ground. It still exists, unlike Lord and Taylor and Sears. Doesn't seem to have fared much worse than Macy's, though I didn't do a ton of research here.
- KerrAvon 4y ago
  Yes, we don't actually know whether it would have worked. He said upfront that it would need more time; apparently he didn't manage upward effectively enough and for some reason the board didn't feel desperate enough to give him more runway. Department stores had already been declining for a long time before he came along, though.
whoopdedo 4y ago
Was he the guy who promised to make their pricing easier to understand with clearly labelled discounts without coupons? He is. Then he probably did spend time in a store because confusion over sales and extra time at checkout were common at JC Penney. His plan would have made the shopping experience less complicated. The problem is it didn't translate into improved performance. The opposite actually. Because what customers say and what customers do aren't always the same thing. They may complain that there are too many coupons. But when given the choice they preferred using coupons. So he got sacked and JC Penney went back to the old pricing scheme. By becoming even more risk-averse no one after him even tried to pull the company out of its death spiral. In hindsight the plan would never have succeeded because the customers who would have appreciated the simpler pricing had already left. The JCP shoppers at that time were coupon hunters who resented the changes. He ignored the existing customers while chasing ex-customers who didn't want to return.

I wonder if he did the same thing at JC Penny when he was running it into the ground.

by tssva 4y ago

I wonder if he did the same thing at JC Penny when he was running it into the ground.

wnevets 4y ago

In his defense shoppers wanting stuff to appear to be on sale is pretty dumb.

lotsofpulp 4y ago
Using an incorrect model of your clientele’s behavior and emotional responses is even dumber. Of course, I would have made the same mistake as Johnson. But it is always a good reminder of how differently people’s brains work.
agloe_dreams 4y ago
The hardest thing for that was that for him to succeed he really needed to play the long game. JCP was and still is eternally screwed. Mall retail is pretty much doomed to die and the ever increasing sale ratios are a side effect of attempts to 'growth hack' their way out of the inevitable. The fact of the matter was that JCP was more expensive than Walmart for, effectively most of their main brands, the same product. Sales allowed JCP to pretend their product is 'worth more'. The problem became a race to the bottom though. Once you say a store-brand Polo should cost '$69.99' but is on sale for $24.99, you start to tell your customer "Our products are overpriced." As ultimately, your product still is more expensive than the $14.99 Walmart product. By removing the price war, pricing their product at value. You now can compete on a more simple message of quality: "Our product is worth $10 more because X". The best part of this is...that's exactly what Walmart is actually doing. Walmart is actually rather sale-resistant and they frame it as a 'rollback' rather than X% off. Walmart's message is purely the regular price, not the value. The issue you of course run into for JCP though, is in the interm, as the market changes, you need to throw a bunch quarters made up of that built up growth hacking debt of ever increasing sales in the trash. That just won't fly on Wall st. What JCP really need is a reboot though, they are doomed either way due to their leases. Organizationally, I would be trying to get rid of those as fast as possible and get into outdoors small-medium retail. They have a great brand but have insanely expensive locations.

Brendinooo 4y ago

I didn't see it that way. He took a big swing to do something different and was fired less than two years into it. Maybe you could argue that he was straining against something too strong to overcome or misapplying his lessons from a higher-margin brand, but it's also possible to say that he wasn't given enough time to see it through. It's like if someone would have taken over Kodak at the turn of the century to go all-in on digital. It would have hurt the company in the short term and kicked against their core business but maybe they would have come out on the other side better off. Impossible to say if the scenario isn't allowed to happen. His tenure coincides with the beginning of the decline of department stores in general, so you'd have to show that JCPenney fared uniquely worse to say that he ran it into the ground. It still exists, unlike Lord and Taylor and Sears. Doesn't seem to have fared much worse than Macy's, though I didn't do a ton of research here.

KerrAvon 4y ago
Yes, we don't actually know whether it would have worked. He said upfront that it would need more time; apparently he didn't manage upward effectively enough and for some reason the board didn't feel desperate enough to give him more runway. Department stores had already been declining for a long time before he came along, though.

whoopdedo 4y ago

Was he the guy who promised to make their pricing easier to understand with clearly labelled discounts without coupons? He is. Then he probably did spend time in a store because confusion over sales and extra time at checkout were common at JC Penney. His plan would have made the shopping experience less complicated. The problem is it didn't translate into improved performance. The opposite actually. Because what customers say and what customers do aren't always the same thing. They may complain that there are too many coupons. But when given the choice they preferred using coupons. So he got sacked and JC Penney went back to the old pricing scheme. By becoming even more risk-averse no one after him even tried to pull the company out of its death spiral. In hindsight the plan would never have succeeded because the customers who would have appreciated the simpler pricing had already left. The JCP shoppers at that time were coupon hunters who resented the changes. He ignored the existing customers while chasing ex-customers who didn't want to return.