Jill Soltau was appointed CEO of JC Penney in October of 2018. Her retail background is Sears (ouch!), Shopko (oops-just filed for bankruptcy) and, most recently, President and CEO of Joann Stores (a privately held fabric and craft chain with sales of about $2.5 billion). Her background in those department stores, hopefully during better days, is in merchandising.
Here’s what she faces at JCP:
“The company says comparable-store sales for the nine-week period ended Jan. 5 fell 3.5% on a shifted basis; on an unshifted basis, comp sales fell 5.4%. “(Seeking Alpha, January 8, 2019)
This while the rest of the retail world (or most of it, anyway-see Macy’s) is reported to have increased sales for the Holiday 2018 season by 5.1% and online sales reported to have increased 16.5%. (Seeking Alpha)
2017 revenue at JCP was about $12.5 Billion with a net loss of $116Million. By contrast, Amazon Cyber Monday sales were about $7.9Billion.
The above is not intended to inflict pain or rub salt in the wound, but to highlight the question: What is the current position of JCP in the consumer’s mind? Answer- forgotten. Or at least an afterthought. Or an after-after thought.
Why? As I have pointed out many times about the big losers at retail in my blog www.isourcerer.com, and most recently in the 2018 article, “JC Penney and Sears: The Hollow Men-An American Tragedy,” (read it here), it has lost its relevance, its identity in the consumer’s mind.
So how to get it back and not only survive but grow in today’s dynamic retail environment?
Here’s my two cents for JC Penney (pun intended):
First- JCP needs a Strategy. Taking a lesson from my class on Competitive Strategy at NYU, let’s paraphrase Michael E. Porter’s definition: The core of a strategy is a value proposition that makes you unique. What do you offer your customer that nobody else does (the answer is not price-only).
This unique value proposition is your identity. So what is JCP current identity? What makes them unique? Clearly, not enough people know or think they know. Then, what can JCP do to create an identity that everyone will remember? To me, the most valuable thing about JCP is its name and what it represents in the history of American retailing. Nobody else can match that, so here is the beginning of unique.
JCP needs a new story. Rebuild the brand on the images of what made American retail great. The catalogue, the early stores- THEN, fast forward to today.
So, what about today? From a merchandising and process standpoint, JCP needs to reinvent itself.Buying more of what is selling now in the stores won’t do it. Find a niche in the customer’s shopping map. Clearly, not as a luxury brand and hopefully not as a price monger (Walmart, TJX, etc. are deeply imbedded there).
So where? Look at Zara and those disruptors that are successful now, such as Untuckit and Everlane. Based on their sales increases, they are filling a need that is not nearly maxed out. Value Fashion Merchandising.
Then how? First, completely redo your value chain to gain speed to market, and don’t be satisfied with four seasons a year. Newness. Give the customer a reason to come back.
Second, redo the store experience. There is lots of history to draw upon. Maybe, for example, redo the stores with the trappings of the past-wood, fabric, lighting that would suggest that, when you shop at JCP, you are a part of history that has updated itself to the present day.
Most important, hire the right people. Not consultants- like hiring a head football coach from baseball. People who have walked a mile (or, like some of us, hundreds of thousands of miles) in retail and wholesale shoes.Merchants. With battle-hardened Experience.
Finally, for my advice today (there is so much more to this), update your process. Your web site needs to reflect merchandise you want that you can order online or try on/pick up in store. Not this.For those of you who didn’t click the link, here are some highlights:
From the comments on LinkedIn, it seems Jill is a great people person, and she acknowledges that her success rests on finding the right people. Good- but which people and to do what? To paraphrase another marketing guru, Peter Drucker, in his iconic concept Management by Objectives, everyone needs to buy in and be passionate about the mission (learn more here).
I also wish you the best of luck and hope for your success, Jill. As a former retail merchant who watched Macy’s singlehandedly destroy the nation’s regional retail, I am rooting for a revival. Macy’s is kindly stepping out of the way.
More sense of urgency, I think. You don’t have years to solve this problem.