I have to admit that it’s a lot easier to be critical about an ad and marketing campaign when you are a thousand miles away from making the decisions. But, this is our blog so we get to write whatever we want (within reason).
So, today’s story is about one of America’s storied brands, JC Penney. JC Penney has been around for a long time. It started as a single “dry goods” store in Kemmerer, Wyoming in 1902. And it still carries the name of its founder – James Cash Penney, although that didn’t happen until the 1920′s. His stores originally bore the name “The Golden Rule.”
Less than a year ago, JC Penney brought in Ron Johnson as their new CEO. He was hired because of his experience with two of the most successful retail stores in recent memory: Target and The Apple Store. He and his handpicked president, former Target executive Michael Francis set about to recreate JC Penney. New logo, new store design, new ad campaign, new pricing structure.
Well, things haven’t turned out that well. Amid slumping sales (down more than 30 percent by some accounts), Francis abruptly resigned yesterday. His departure has sent the JC Penney stock into the tank too, dropping to less than $22 a share yesterday after hitting $40 in February.
You can listen to the NBC News report below for all of the gory details about Francis’ departure.
What’s the bottom line of all of this? I think there are three really important lessons learned here in this very painful, (for JC Penney and their shareholders) teachable moment.
1) Good marketing doesn’t have to be complicated. The new pricing structure, which eliminated coupons, just confused people. To prove that point, JC Penney launched an ad campaign called “Do the Math” in April. The goal of the campaign was to explain that the new pricing structure, minus the coupons, was actually cheaper for consumers than before. It’s usually not a good sign when you have to run a campaign just to explain your pricing.
2)Know your customers and give them what they want. JC Penney customers loved their coupons. Period. They looked for them every month and when they went away, so did they. No amount of ‘splainin’ was going to bring them back.
3)Brands take time to develop. To be fair, redefining a brand that has evolved over a 100 year period isn’t easy. Even in this day and age with a myriad of advertising channels available, people are still slow to change. Brands like JC Penney are like big boats in the water. It takes a LOT of energy and time to turn them around and change direction.
I hope they are successful in turning JC Penney around. Their business, and the legacy of a great brand hangs in the balance.