“The number one competitor is ourselves. It’s our ability to change. The number two competitor is everyone else. It’s not Macy’s, it’s not Kohl’s, because if you look at it, every one of our customers shops Amazon, Target, Macy’s, Kohl’s, specialty stores, The Gap—they all shop around! Everyone shops everywhere. So if you look at your competitor as a competitor, you’ll make a mistake. Your competitor is yourself and they way you unlock potential is to unlock a new way to compete. And ideally in a way that’s never been done before, so it’s seen as new.”
As JCPenney CEO Ron Johnson has discovered, trying to force a brand into an Apple-shaped mold doesn’t ensure success.
At Apple, Johnson’s claim to fame was being the father of the Apple retail outlets which were a raging success, selling leading-edge, premium priced products in a very simple but contemporary setting. Unfortunately, when he arrived at JCPenney, he immediately concluded he needed to turn JCPenney stores into something akin to an Apple store. He eliminated all notion of a sale and secondly, began forming independent boutique’s within each JCPenney store. Each of these boutiques was focused on a fairly well-known name brand such as Levi’s.
This rapid and dramatic change at JCPenney totally baffled JCPenney’s loyal customers. He was trying to take JCPenney upscale while their shoppers wanted a respectable but low-price alternative that offered some terrific deals each and every week.
As you’ve been reading, the results have been a major catastrophe for JCPenney. Sales are down over $4.0 billion versus a year ago and the stock price is off 55%. While the holiday season is typically a major boost for retailers, for JCPenney, same-store sales for the recent holiday season declined 32% versus a year ago.