Editor's View - March 2012

In Praise Of Fresh Thinking
By Wanda Jankowski, Editor-in-Chief

The “transformation” of jcpenney has just begun and already some pundits have started to question whether or not it will work and wonder how long the powers that be will wait to see financial payback before pulling the plug.

You can read about the four-year plan to recreate the jcpenney stores on p. 12 in the “For Retailers Only” column and glean further details from “Industry Views” to the right of this column. At press time, the “In Praise Of Fresh Air” presentation that mapped out the transformation strategy delivered in January by Ron Johnson, J.C. Penney ceo and Michael Francis, J.C. Penney president, was still available online at jcpenney.com (click on Media at the bottom of the home page).

In the presentation, you’ll see Johnson starting from scratch in explaining why and how he’s revamping the department store. In his homey, folksy way, he reveals his own good feelings about his hometown department store when he was growing up.

He points out what has come to be a widespread way of doing business: that stores—and many corporations in most industries today—consider the bottom line first, rather than thinking first about the customers they serve.

Quick-fix thinking, price raising then slashing and cheapening the quality of goods in the hopes of increasing margins—approaching business as if it’s just all about the numbers—is what got many businesses into the mess they are in today. Now, along comes Johnson with a long-term plan not based on short-term, superficial changes, but on a thought-through, “let’s treat the customer fair and square” strategy that begins at its roots by answering questions all too easily pushed aside today: What does the customer want? What’s good for the customer? How can we please them?

Instead of watching from the sidelines waiting for a slip-up, we should be glad Johnson has taken on the challenge of transforming his department store. If his plan succeeds, it means there’s hope for others to evolve to a better place in retailing than we have been in the past few years.

In the Harvard Business Review blog on Nov. 21, 2011, Johnson, who formerly was senior vice-president for retail at Apple, wrote, “People come to the Apple store for the experience—and they’re willing to pay a premium for that. There are lots of components to that experience, but maybe the most important—and this is something that can translate to any retailer—is that the staff isn’t focused on selling stuff, it’s focused on building relationships and trying to make people’s lives better. That may sound hokey, but it’s true.”

He admits the revolutionary Apple store concept met with difficulties along the way, with three years passing before the Genius Bar grew so popular a reservation system had to be established for it.

Johnson also writes, “There isn’t one solution. Each retailer will need to find its own unique formula. But I can say with confidence that the retailers that win the future are the ones that start from scratch and figure out how to create fundamentally new types of value for customers.”

An advantage for Johnson in his “from scratch” rebuilding of jcpenney is that it doesn’t have to transform retailing at large. It just has to work for jcpenney. Whether it does or not, kudos to him for responding to the challenge with fresh thinking!

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