The big day – post Thanksgiving Black Friday shopping – starts a holiday shopping season that makes or breaks many retailers’ year. Black is likely a better description of most retail leaders’ moods, as their market environment has only gotten harder year after year. From the days of Sears being the only store or catalog in town, we have moved to a world where the consumer is king. Expectations are merciless, prices are transparent, and consumers benefit from intense competition on-line and in-stores. Success will only come to brick-and-mortar retailers who have a clear view of their target customer, offer a brand promise that is relevant, high value and hard for others to copy, and create in-store experiences that make it worthwhile to go to the store. JC Penney (JCP) is a best-case example of what not to do. It added appliances—and subsequently…
Macy’s slow demise
P&G leader Arthur Jones once said, “All organizations are perfectly designed to get the results they get!” This truism should be tattooed on every leader’s chest so that one glimpse in the morning mirror reminds them of the CEO’s responsibility. If they don’t like their organizational results, they must change the underlying design that created them. After closing 40 stores last year, Macy’s recently announced it plans to shut down another 100 this year. Its CEO blamed a change in the retail environment, taking no responsibility himself for Macy’s poor showing. Hmm. A CEO that increased Macy’s borrowings to buy back its stock, as the corporation did last year, has a lot of explaining to do. Frankly, I am mad at Macy’s. The company pursued an acquisition strategy that rolled up iconic regional department stores to leverage advertising, purchasing power, and back…
What JC Penney didn’t understand about the role of price in business models
Wizard of Oz protagonist Dorothy captures the shock of her post-tornado world in the memorable line, “Toto, I’ve a feeling we’re not in Kansas anymore.” Ex-Apple retail wizard Ron Johnson, now CEO of JC Penney (JCP), must be saying “I’m not in Cupertino, California [Apple’s headquarters] anymore” as he discovers the challenges of transforming his new employer’s retail stores. The first head has already been chopped: merchandising and marketing leader Michael Francis left JCP after less than a year on the job. We’ll now see if Johnson, who created the “shabby chic” value promise at Target and the stellar shopping and learning experience at Apple, has the chops to fix a troubled company in a category with excess supply. I thought Johnson had a great idea – reinvent the department store, which had offered wonderful shopping experiences when local high-end stores dominated the…