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This article over-generalizes from one visit to a single store without providing sufficient information to judge whether the author's conclusions are valid for

by cs702 14y ago

This article over-generalizes from one visit to a single store without providing sufficient information to judge whether the author's conclusions are valid for all or most of the company's stores. According to the company's recent presentations to investors, over the next few years JCPenney is converting its locations from traditional department stores into 'mini malls' with small independently-operated stores and a 'town square' with amenities like coffee shops. Recent data provided by the company shows that those stores that have been converted into the new format are generating TWICE the sales per square foot of stores with the traditional format.[1] The author doesn't say if he visited a really old off-mall store, or an on-mall store that has not yet been converted to the new format, or an on-mall store in the midst of converting to the new format, or a store that has already been converted to the new format. How can he generalize without specifying which kind of store he visited? Shame on him for not doing his homework. -- [1] See slide on page 41 of this presentation: http://phx.corporate-ir.net/External.File?t=1&item=VHlwZT0yfFBhcmVudElEPTQ4NTA2NTh8Q2hpbGRJRD00ODUzMDk= http://phx.corporate-ir.net/External.File?t=1&item=VHlwZ...

astrodust 14y ago
Sample size of one! That's reporting. Just like the New York Times review based on a single drive with the Tesla.
smackfu 14y ago
This just reflects the dilemma of the "new" JCPenney. They have a new brand strategy, but can only roll out physical changes slowly. So I go to my local mall and the only differences in the store are new signage and nothing on sale anymore. Is that supposed to be appealing? Is it any surprise they lost sales in those stores?
- mixmastamyk 14y ago
  I thought the important part of the "no-sales" strategy was to have lower prices every day. Author doesn't mention it. Doesn't seem like such a bad idea? What might be happening is the same squeeze that happened to (now lower-end) stores like Sears and Kmart as well ... they can't compete on pure price against Walmart, Costco, et al. They can't move into the high-end because of historical baggage and lack of credibility, etc. And of course, the retail world has changed. Much business has moved online, and the widening gap of rich and poor (and their associated tastes), are a double-whammy to the solar plexus of the midrange retailer.
  - smackfu 14y ago
    Shoppers are pretty jaded about retailers telling them they have "low prices every day". OTOH a sale where it really does cost $10 less this week than last week is concrete evidence.
  - bradleyland 14y ago
    I think you pretty much nailed it. It looks like Johnson's strategy is to go after the customer that is more focused on experience, and less on getting the absolute bottom-dollar price. I think that has potential, but it's going to take a sharper eye than mine to identify the correct "experience" elements that will draw in that niche. What's odd is that this is JCPenny. As a brand, JCPenny is starting from the opposite end of the spectrum. That is to say, JCPenny shoppers aren't traditionally "experience" focused. We grew up poor. Pretty much all of my dress clothes growing up were Stafford (JCPenny's house brand), because they were inexpensive. My sister is a stereotypical frugal accountant; she's a JCPenny shopper. If JCPenny's goal is to convert their current customer base to an experience-oriented shopper, they're doomed to fail. If their intention is to attract new, experience-oriented shoppers, they might succeed, but they've got a tough road ahead.
brucehart 14y ago
I think their "mini mall" strategy is interesting, but I have my doubts if it will work beyond being a novelty to buyers in the short term. If a brand is strong enough to support having its own store, why wouldn't they just open up a store in the adjacent regular mall and cut out the middle man?
- bunkat 14y ago
  This mini mall department store strategy is actually prevalent in Taiwan. Basically there is a big department store with a bunch of these mini-stores inside of it. The big difference in Taiwan is that when you want to purchase something you purchase it at the mini-store - they are all completely independent operations. I'm not sure if the idea translates as well when the stores aren't independent, because then you are right that getting their own storefront might make more sense.
- a3camero 14y ago
  You can find these types of department stores in Japan: http://www.japan-guide.com/e/e2072.html http://www.japan-guide.com/e/e2072.html This 2011 article about JCP's new strategy also discusses Japanese department stores: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2813 http://knowledge.wharton.upenn.edu/article.cfm?articleid=281... (ctrl-F "Japan")
- prostoalex 14y ago
  If you're selling $200 jeans (Diesel), you probably want to control the experience down to fine details. But if you're selling $40 jeans (Arizona, Urban Star), smaller presence is cheaper and allows for faster iteration.
3minus1 14y ago
I agree. I happen to know the Wheaton Shopping Plaza he's talking about and that whole mall is pretty run down. I doubt JCPenny would choose that location for their experimental new store design.

by cs702 14y ago

astrodust 14y ago

Sample size of one! That's reporting. Just like the New York Times review based on a single drive with the Tesla.

smackfu 14y ago

This just reflects the dilemma of the "new" JCPenney. They have a new brand strategy, but can only roll out physical changes slowly. So I go to my local mall and the only differences in the store are new signage and nothing on sale anymore. Is that supposed to be appealing? Is it any surprise they lost sales in those stores?

mixmastamyk 14y ago
I thought the important part of the "no-sales" strategy was to have lower prices every day. Author doesn't mention it. Doesn't seem like such a bad idea? What might be happening is the same squeeze that happened to (now lower-end) stores like Sears and Kmart as well ... they can't compete on pure price against Walmart, Costco, et al. They can't move into the high-end because of historical baggage and lack of credibility, etc. And of course, the retail world has changed. Much business has moved online, and the widening gap of rich and poor (and their associated tastes), are a double-whammy to the solar plexus of the midrange retailer.
- smackfu 14y ago
  Shoppers are pretty jaded about retailers telling them they have "low prices every day". OTOH a sale where it really does cost $10 less this week than last week is concrete evidence.
- bradleyland 14y ago
  I think you pretty much nailed it. It looks like Johnson's strategy is to go after the customer that is more focused on experience, and less on getting the absolute bottom-dollar price. I think that has potential, but it's going to take a sharper eye than mine to identify the correct "experience" elements that will draw in that niche. What's odd is that this is JCPenny. As a brand, JCPenny is starting from the opposite end of the spectrum. That is to say, JCPenny shoppers aren't traditionally "experience" focused. We grew up poor. Pretty much all of my dress clothes growing up were Stafford (JCPenny's house brand), because they were inexpensive. My sister is a stereotypical frugal accountant; she's a JCPenny shopper. If JCPenny's goal is to convert their current customer base to an experience-oriented shopper, they're doomed to fail. If their intention is to attract new, experience-oriented shoppers, they might succeed, but they've got a tough road ahead.

brucehart 14y ago

I think their "mini mall" strategy is interesting, but I have my doubts if it will work beyond being a novelty to buyers in the short term. If a brand is strong enough to support having its own store, why wouldn't they just open up a store in the adjacent regular mall and cut out the middle man?

bunkat 14y ago
This mini mall department store strategy is actually prevalent in Taiwan. Basically there is a big department store with a bunch of these mini-stores inside of it. The big difference in Taiwan is that when you want to purchase something you purchase it at the mini-store - they are all completely independent operations. I'm not sure if the idea translates as well when the stores aren't independent, because then you are right that getting their own storefront might make more sense.
a3camero 14y ago
You can find these types of department stores in Japan: http://www.japan-guide.com/e/e2072.html http://www.japan-guide.com/e/e2072.html This 2011 article about JCP's new strategy also discusses Japanese department stores: http://knowledge.wharton.upenn.edu/article.cfm?articleid=2813 http://knowledge.wharton.upenn.edu/article.cfm?articleid=281... (ctrl-F "Japan")
prostoalex 14y ago
If you're selling $200 jeans (Diesel), you probably want to control the experience down to fine details. But if you're selling $40 jeans (Arizona, Urban Star), smaller presence is cheaper and allows for faster iteration.

3minus1 14y ago

I agree. I happen to know the Wheaton Shopping Plaza he's talking about and that whole mall is pretty run down. I doubt JCPenny would choose that location for their experimental new store design.