

J.C. Penney Apologizes in TV Spot - petsos
http://www.businessweek.com/videos/2013-05-01/j-dot-c-dot-penney-apologizes-in-tv-spot

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ghshephard
Link to the actual ad: <http://www.youtube.com/watch?v=qKQAivS0xsE>

If you watch it, it's like they put the voiceover over random stock video
photography. It's rather bizarre.

\-- snip --

It's no secret, recently JCPenney changed. Some changes you liked and some you
didn't, but what matters from mistakes is what we learn. We learned a very
simple thing, to listen to you. To hear what you need, to make your life more
beautiful. Come back to JCPenney, we heard you. Now, we'd love to see you.

\-- snip --

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SoftwareMaven
After talking with my brother-in-law about what has happened on the JCP sales
floor, I don't see how they can survive. I think they were probably in death
throws before the new CEO and I'm not sure Johnson could have saved them, but
now, there's no stopping the death throws.

Johnson was trying to take JCP upmarket (not so much in price/quality as in
type of customer) because he knew they were going to be completely squeezed
out by the logistics capabilities of stores like Target. Unfortunately, that
kind of process takes years and a lot of courage because you will alienate
many, if not most, existing customers before new customers come.

But JCP did the worst thing: they stopped right after alienating their
existing customers. I think my brother-in-law will be looking for a new job
soon. I will have a great deal of respect for the new CEO if they can bring
JCP back to their previous level of "glory" and maintain it.

~~~
eclipticplane
Another major issue with going "up-market" for JCP was their retail space
situation. Many of their stores were in areas that didn't have a significant
market share of higher-income families. If they did have higher income
families, the market was already saturated with other higher-end retail
stores.

Many of their stores also suffered from high rent even in failing malls,
exacerbating their losses as suburban malls failed.

If JCP didn't have their retail lease obligations, they may have succeeded in
pivoting to higher market consumers and transitioning to smaller stores and
tighter, more informed staff. However, they have decade+ long leases on anchor
stores in malls with massive financial penalties for early withdrawal, so they
are stuck with massive amounts of retail floor. It's one thing to change your
business strategy wit 4,000 square foot retail spaces; it's entirely different
if you're locked into 40,000 square feet in hundreds of malls!

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thirsteh
What exactly did jcpenney do that they're apologizing for? Just had a
plummeting stock price?

~~~
JoshGlazebrook
Essentially, they were the victims of themselves. For years and years they
would mark up the cost of their clothing and other items, and send out coupons
to their members which really just brought the prices back down to what they
should have been in the first place. When the new CEO took over, he got rid of
these coupons, and instead of marking items up, he just left them at the price
they would have been had someone actually brought a coupon.

Now you all know how stubborn some older people can be. They want to hunt for
a bargain, and not getting that feeling of accomplishment from the feeling of
"fictitiously" getting a good deal deterred them from wanting to shop there.
They also have begun rolling out mobile payments on iPads/iPhones and many
older people think they're not as safe and that someone is stealing their
credit card info.

Now I happen to prefer the new store in a store concept as you can actually
find what you're looking for more easily as the highlighted brands are in
plain view with their own little section of the store and all the associated
products are near by. Much better than the old, everything mushed together
layout.

tldr: They tried to cater towards the younger generations, but failed to
realize their main customer base is still overwhelmingly the older generation
of americans who are set in their ways.

~~~
SoftwareMaven
_Now you all know how stubborn some older people can be._

Age (as is so often the case) has nothing to do with it. My brother-in-law is
a sales associate there. Even the teens/twenty-somethings he deals with we're
mad about the lack of sale prices.

~~~
JoshGlazebrook
You're right, age certainly isn't always the case.

I preferred the 'new', old square pricing. If I actually needed something from
JCP, I could just go and get it. I didn't have to worry about having to wait
for some stupid coupon sale to bring the price down to what it should have
been in the first place. But I guess you could counter that with the fact that
if everyone knows they can just pick 'x' up at a later time at the low price,
they would have no incentive to buy it in a timely manner.

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phil
J.C. Penney Shoots Self in Foot

