J.C. Penney's (JCP) quest to rebound from the disastrous reign of ousted CEO Ron Johnson continued today when it apologized to its disaffected customers in a new ad.
Titled "It's No Secret," the 30-second spot acknowledges the various changes the retailer has undergone in the last year and a half and admits that not every change went over well with the retailer's customer base.
"Some changes you liked, and some you didn't," says the ad's narrator, in what can charitably be described as a massive understatement. See for yourself:
The ad promises that the company will learn from its mistakes, the most high-profile of which was the "fair and square" pricing scheme, which did away with coupons and sales. Shortly before his ouster, Johnson himself acknowledged that the pricing strategy was a mistake, noting that "we learned [our customer] loves a sale."
The apparel strategy was likewise unpopular. Johnson brought in jeans "bars" and stylish boutiques from new brands like Joe Fresh, but in the process did away with "basic" apparel and favored brands like St. John's Bay. That alienated the retailer's older customers, and the company recently said it would start bringing back those departed brands in an attempt to lure back the faithful.
The ad went up on Twitter and Facebook on Wednesday morning, and attracted thousands of comments from J.C. Penney fans alternately praising the company for its honestly and angrily demanding changes.
"Bring back St Johns Bay get rid of all the sleezy stuff you changed to," reads one popular comment on the Facebook post. Another commenter demands that the retailer abandon its mobile checkout system, which is intended to make the checkout process more convenient but has attracted complaints from some shoppers and employees.
J.C. Penney had been on a bit of a roll since Johnson was replaced by former CEO Myron Ullman, but shares have been trending downward since Moody's cut its rating Tuesday and declared that a new loan it had secured from Goldman Sachs "will not solve JCP's longer term performance concerns."
UPDATE: About three minutes after tweeting out the link to this story, I got a reply from J.C. Penney's Twitter account:
I've noticed that other users tweeting at J.C. Penney are receiving similar responses; in cases where a user has made a specific suggestion, the person manning the account thanks the user for his or her feedback. The company's Facebook account is likewise taking an active role in the discussion and thanking commenters for their responses. And the company's social media team is rallying the discussion around the hashtag #jcplistens.
One of the big criticisms of Johnson was his penchant for charging ahead with big changes without first testing them with customers. While we doubt the new management is reading each and every comment, they clearly want to give the impression that they're more responsive to their customers than the old boss.
Matt Brownell is the consumer and retail reporter for DailyFinance. You can reach him at Matt.Brownell@teamaol.com, and follow him on Twitter at @Brownellorama.
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It was repeated so often that it became dogma: Ron Johnson's greatest sin was ditching the sales and coupons. Johnson himself called it a "mistake," and one of his last acts as CEO was to abandon his pricing strategy and bring back the coupons.
While many commenters cheered the coupon comeback, a few were more skeptical of the return to the old regime. In fact, many noted that the retailer was obviously just jacking up prices just so they could lower them again with discounts.
Obviously J.C. Penney needs to bring back the sales and coupons if it wants to attract its wayward customers, but it should probably find a more subtle way to do it. Johnson was criticized for abruptly abolishing coupons without first testing the strategy; if the new management just slaps on higher price tags and then hands out coupons, it risks making the same error in the opposite direction.
One commenter identified herself as a sales associate for J.C. Penney, and said she hated the "dog and pony show" of the old coupon regime. Her comment got more than 300 'likes,' as well as comments from other sales associates who expressed how difficult it was to deal with price adjustments, extreme couponers and confusing sales.
"As an associate, I had Nightmares in Nov & Dec of 2011 when the coupons were out in Groves [sic]," said another commenter, who went on to suggest that the retailer should place limits on how many coupons shoppers can use.
The lesson for management? If you're going to bring back coupons, don't make a complete return to the "death by coupon" era -- it can be a huge pain for your employees.
In overhauling the retailer's apparel offerings, Johnson evidently wanted to transform its customer base into something more closely resembling Abercrombie's young and skinny crowd. Unfortunately, that meant that J.C. Penney's larger customers were left out in the cold.
Various commenters complained that plus-size offerings have dwindled significantly, and that they'd like to see all styles of clothing available in larger sizes. If the new management (which is mainly the old management) wants to win back customers, it will need to make sure customers of all sizes are accommodated.
Several commenters said that they missed being able to shop and order through a catalog.
Sure, most people who can't make it into the store will be inclined to shop online, which is more cost-effective for retailers than shipping out heavy catalogs and taking orders by phone. But members of J.C. Penney's older customer base may not be as technologically inclined, so it's likely missing out on sales by not providing it as an option.
The retailer has already made concession to its older shoppers by bringing back St. John's Bay and other "basic" clothing. Making it easier for them to shop from home would also be a good move.
One innovation that Johnson brought over from the Apple Store was the mobile checkout: Instead of waiting in line, customers could get checked out by a roving cashier toting a smartphone or tablet.
But much like the pricing strategy, mobile checkouts apparently don't play as well in a big department store as they do in the Apple Store (AAPL). We've heard from J.C. Penney employees complaining about the switch, and it looks like customers aren't thrilled either; a few commenters noted, for instance, that the process makes getting a receipt a hassle.
Maybe the system has been implemented poorly, or maybe it's just a case of an older customer base being confounded by innovation. Either way, this looks to be another change that J.C. Penney should scale back or reconsider.
Ron Johnson had a vision of a department store as a marketplace -- instead of just organizing clothes by department, he would have a collection of boutiques, each dedicated to one brand.
But the stores-within-a-store concept might be confusing some customers. One commenter pointed out that the layout makes comparison shopping difficult, forcing customers to visit multiple boutiques just to find a pair of jeans. Other commenters echoed that complaint, noting that they found the layout so frustrating that they left the store empty-handed.
The retailer has burned through a whole lot of cash remaking its stores, so we imagine management isn't thrilled at the prospect of undoing those changes. But if they want to get sales figures back up, they'll need to arrange their stores in a way that makes comparison shopping among its brands easier.