JC Penney CX flop

JCPenney’s CEO Ron Johnson was recently ousted after 17 months on the job. He had tried to overhaul the struggling retailer’s CX by simplifying pricing, replacing cashiers with roving check-out staff, introducing designer and upscale products, and changing the name and logo. See the changes since 2011:

JC Penney logo history on Wikipedia.org

JC Penney logo history from Wikipedia.org

The problem? The customers didn’t like it.

I came across a LinkedIn post that eloquently describes how JCP customers failed to respond to ideas that had been “rousing successes” at the Apple Store. In my Change Management class at Stern, we’re discussing this topic as part of a broader conversation about why change initiatives often fail. In the case of M&As, too heavy a focus on spreadsheets, financial statements, and calculations at the expense of psychological and cultural considerations is often to blame. A similar story seems to have played out at JCP.

The problem? The customers didn’t like it.

They didn’t want to give up sales or the thrill of the hunt for the sake of predictable prices. They didn’t want to change their check-out behavior for the sake of revolutionizing retail. They didn’t want upscale products at high-end prices. JCP underestimated both the psychological and cultural resistance to change among existing customers and the difficulty of wooing customers from the Apple Store set. (Of course, the lawsuit from Macy’s over Martha Stewart didn’t help matters. An LA Times journalist called it Johnson’s Waterloo.)

JCP’s CX flop illustrates two key ideas. The first is to know your customers. Not the Apple Store’s or anybody else’s – yours. The second is to understand that your customers own your brand, not you. That reminds me of my prior post about logo changes Gap and Starbucks. JCP had the same logo for 40 years, then two new ones (including a name change) in 2 years. Too much change, too fast? Maybe so. What’s obvious is that the customers didn’t like it. What else matters?

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This entry was posted in Customer behavior, Customer service, Marketing, Pricing. Bookmark the permalink.

2 Responses to JC Penney CX flop

  1. mindwear says:

    I kind of liked the idea the JCP put in place. Personally, maybe as a guy, I did not want to wait for a sale to go buy something. I want to get what I need to get at the lowest price when I need to get it. I guess I am not a typical JCP shopper. Also what is different about the roving check-out staff, never once have I walked up to the check out at JCP or any other “department store” and found a checker waiting for me. I always have to look around like a lost puppy to get anyone to check me out.

    • Thanks for chiming in, Ed! I’ve had the lost puppy experience many times and have even set down my intended purchases and walked out because of it. However, for better or worse, there aren’t enough people with your no-nonsense M.O. to make up for the bargain hunters who lost the scent.

      It’s hard to know what customers will respond to. Target successfully positioned itself as an “upscale big box store”, when one can easily see that strategy flopping. And JCP’s strategy could have been a huge success; it was a big bet, so management clearly thought it would be!

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