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JCPenney Needs To Focus On Product – Pronto!


Much has been written about JCPenney in the last week and a half since CEO Ron Johnson outlined his strategies to revive the ailing department store. New pricing standards, turning the stores into multiple boutiques within the larger shell and new marketing (which, in my view sports an obvious similarity to that of Target).

When Bill Ackman, the confrontational CEO of Pershing Square Capital Management whose hedge-fund owns 25 percent of JCPenney, is saying that in the future, going into a JCPenney store will be like going into an Apple store – I decided I could not bite my tongue any longer.

Ackman, like so many other non-merchants, fails to realize it all begins with the product. Creating the right product is difficult. Not impossible, but definitely difficult.

By “right” I mean – function, aesthetic and quality consistent with the customers anticipation of benefits and price expectations. But “right” also means – product the target customer desires, providing the benefits the target customer believes are essential and product that creates a connection between the brand and the target audience. If a retailer can nail all of those aspects, and believe me it is no simple task due to multiple moving parts, they may just sell a few widgets. And if they sell a few to customers who become brand advocates – the retailer may just be successful.

Consumers don’t flock to Apple stores because the shiny fixtures, bright lighting and knowledgeable staff – those factor in…but the product is the draw. Apple retails well-designed, functional products that consumers want. And talk about brand advocates!

Take a look at the Niketown stores. Essentially museums to the brand. Expansive space, expensive fixturing, displays and ambience but at the end of the day…it’s Nike product that can be purchased at hundreds of other retailers and other brands such as Under Armour offer essentially the same product. Shoppers want to see Niketown – once.

While possibly a simplistic view the truth is it’s the product that drives customers to stores. Not the “experience”.

I’d like nothing more than JCPenney to be successful. With Sears Holding Company mucking up its brands it’s entirely possible that JCPenney, Walmart and Target could remain the big guns left standing.

The other day Ackman said, “The answer is the department store hasn’t changed in 25 years.  This man (CEO Ron Johnson who is the former Apple retail genius) will completely change it and it’s going to be exciting.  You’re going to want to go there.” I hope Ackman’s right.


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