Jill Cataldo


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JC Penney hires new marketing executive – the guy responsible for “New Coke!”

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Oh, you just can’t write this stuff. Truth is truly stranger (and more humorous) than any fiction.

JC Penney’s “brilliant” CEO Ron Johnson is the man responsible for getting rid of sales and coupons at JCP last year. Who can forget him comparing coupon shoppers to drug users? Well, he relented last month and said that Penney’s would be bringing back sales in 2013. Apparently, the 4.3 billion dollars in JCP losses since he took over clued him in that the no-sales, no-coupons strategy just wasn’t working.

Well, today Ron Johnson announced that he’s hired a new marketing executive to help turn things around for JCP — and it’s the guy responsible for the rollout of “New Coke!” From Business Insider:

“I reached out to Sergio last fall based on his experience at Coca-Cola in the 90s,” Johnson said on the company’s Q4 earnings call…

What did Zyman do at Coke?

Zyman was instrumental in the launch of New Coke in 1985, a product aimed to turn around Coke’s lagging sales and put the company back at the top of the soda industry. The cola’s legendary formula was tweaked in secret to give it a “smoother, rounder yet bolder” taste and production on the classic brand stopped altogether.

But it didn’t work. New Coke went down in the books as one of biggest marketing flops of all time.

In the same call, Ron discussed what his shoppers want. From The New York Times:

“We worked really hard and tried many things to make the customer understand that she could shop anytime on her terms.

“But we learned she prefers a sale, at times she loves a coupon, and always, she needs a reference price,” he said, referring to items like “compare to” prices on price tags.

He said the company would be running sales “each and every week” going forward, along with offering coupons.

“We are highly confident that as we return to some level of promotion, we’ll get the customer back in the store,” Mr. Johnson said.

(Am I the only one who is annoyed that he always refer to his shoppers as “She?” I’m pretty sure men shop too.)

And, I want to point out I’m writing this post on the same night that I enjoyed a fantastic trip to JC Penneys — where I bought a bunch of things that were on clearance. I do love shopping sales. But the lack of traffic in the stores and the drop in sales is likely a contributor too as to why there are so many clearances going on at JCP too, no?

Comments

  1. How this guy keeps his job is beyond me! You lose a company 4.3 billion dollars and you still get to keep your job?

    Then he hires someone who is a proven failure at marketing? He must be a hypnotist! He has everyone around him in a trance.

  2. What a coincidence. I’m watching a story about their epic failure on the Today Show right now.

    And the sexism jumped right out at me, too, Jill. Especially in the full article, where he implied his shoppers were irrational (“While Mr. Johnson’s strategy makes “great intellectual sense,”…”. And he already has established that he thinks his shoppers are primarily female…

  3. JCP has totally gone downhill. I knew over a year ago things were haywire when I had ordered a pair of jeans online and received a pair of curtains instead, with a label on the bag saying they were jeans! Another online order I made with a gift card took over 3 months to straighten out before I got my money back. This past fall, we took our daughter in for her yearly pictures and it was a horrible experience. A couple of weeks ago, I received the $10/$10 coupon in the mail. I purchased a belt for $15 and a shirt for $6. When I returned the shirt, I was only given back about $3. I told the cashier that I understood that the register had split the $10 coupon between the 2 items (that’s what it showed on my receipt), but that since I had also bought a $15 item that I should get the full $6 back. She said she couldn’t do anything about it because that is what the register said. I am done with JCP!!!!!

  4. I forgot to mention that my husband and I were talking about JCP and we thought that instead of drastically changing every existing store they have and alienating their regular customers, they should have opened a new line of a few stores, calling them “J’s” or something, and trying out all of these new ideas in those stores.

  5. It’s only MARCH 1. You’re a whole month early for your traditional April Fools joke on your site.

    I mean, this is a joke, right? It’s gotta be a joke!

  7. A reader just sent me this link: https://www.mallseeker.com/jcpenney-forum.aspx

    I wasn’t familiar with this site, but there are an AWFUL lot of complaints about JC Penney, many of them recent. So many people are upset that they got rid of the St. John’s Bay brand of clothes too, which were “classic” JC Penney’s.

    I wonder, has Ron Johnson or ANY of the JCP execs read this site? Their shoppers are BEGGING for them to make better decisions and bring back some of the things they liked about shopping JC Penney’s, but nobody’s listening.

  8. Watching CNBC this morning, many on Wall Street think that Ron Johnson should join Andrew Mason, ex-CEO of Groupon, in a Wall of Shame. He should also take the same severance package-$378.36. Just two weeks ago Mr. Johnson said he wouldn’t change a thing that he did last year to JCP. Two days ago he was singing a different tune and maybe they’ll have to return to the old ways of getting shoppers in the store. With their Christmas foot traffic down 17%, large layoffs, and red balance sheets, he better have some fantastic ideas to please his shareholders and his shoppers.

  9. Some great points in a new article at Slate.com: A Truly Depressing Visit to JCPenney

    Penney CEO—and former Apple retail czar—Ron Johnson thought he could reinvent the department store. Instead he’s destroying it.

    JCPenney, the storied if unglamorous retailer, is in trouble. Big trouble. Fourth-quarter earnings results came out on Wednesday and they were terrible. The bad news starts with a quarterly loss of $427 million, but it doesn’t end there. Comparable store sales—meaning stores that were open this past quarter and also open in the same quarter of the previous year—fell by a mind-boggling 32 percent. Henry Blodget says it may have been the worst quarter posted by any retailer ever.

    It wasn’t supposed to be this way. JCPenney made a big splash in the retail world by hiring Ron Johnson, mastermind of Apple’s retail operations, as CEO. He immediately set about to reorganize the stores, and imported Apple concepts, most notably a “no discounting” policy geared around convincing customers that the everyday price is a great price. The results seemed to speak for themselves, but I was curious. After all, I’ve never given the “new” JCPenney a try. Perhaps Johnson is a visionary genius who’s reinvented the department store, and the world just isn’t ready for him. Perhaps he’s the victim of bad luck. Perhaps shareholders just need to hold on and have faith.

    So I took the Metro to the Maryland suburbs for a visit to the JCPenney in the Wheaton Plaza Mall to see if Johnson really is reviving the legendary chain. There is no evidence that Johnson has remade much of anything. Everything that I always find alienating and unpleasant about the basic department store experience is still there. The store is too big and too disorganized. Products are sometimes clustered by functional category and sometimes by brand, with a confusing mix of house brands and real ones. Right at the door a sign invites you to enjoy free Wi-Fi throughout the store, which really is a change. But why would you want that? There’s no place to sit in the store and no synergy between laptop use and shopping there. Just for kicks, I had my iPhone hop on the Wi-Fi network only to discover that the connection speeds were noticeably slower than Verizon LTE.

    Nobody was ever driven into bankruptcy by unreliable Wi-Fi, but that’s the Ron Johnson Era in a nutshell. Instead of building on what the people who like JCPenney liked about JCPenney, he undertook a series of essentially arbitrary changes that alienated some without drawing anyone new in.

    His now-infamous effort to wean consumers off their addiction to discounts by banning sales and coupons in favor of “fair and square” everyday pricing is a case in point. No major retailer works this way. Frequent discounting is an effective tool of price discrimination—the thrifty pay less, the careless or rushed pay more—that lets retailers maximize the value of their fixed real estate investments. Not discounting works for Apple because products become obsolete long before they stop working. Thrifty customers simply upgrade less aggressively. JCPenney customers hated the new arrangement, and not surprisingly Johnson started backing down. But now he has the worst of both worlds. For a no-discounting policy to succeed, it has to be credible. But lurking amid the signs touting the fair-and-square policy I saw a “limited time only” 25 percent discount on Stafford work clothes and various items marked “clearance.”

    A policy initially designed to imply that competitors were duping their customers has become the reverse. Here was JCPenney explicitly telling you that the list price is the real price and you shouldn’t expect discounts, then down the aisle—discounts!

    At best you could say that Johnson, who used to work for Target, has succeeded in making the stores a bit more like Target. He’s brought in Target-style special collections like the Cosabella Amore line of lingerie (oddly placed on the floor with children’s clothes rather than near apparel for grown women) and launched advertisements that seem geared to a cooler, younger, more urban audience than JCPenney’s traditional client base of somewhat square, lower-middle-class moms.

    But to what end? There’s already a Target and an H&M in the same mall for those seeking a slightly hipper experience. Meanwhile, value-conscious and practicality-oriented moms have hardly vanished from the planet. If anything, the economic difficulties of the past few years mean there are more of them.

  10. I’ve been married for 35 years, and during that time I’ve bought ALL of my draperies, bath towels, bath rugs, bedroom comforter sets, and sheets from Penneys. I’ve always loved their selection and quality. I have bath towels that are 15 years old and they still look great! I now have to replace my JCP Supreme drapes and sheer panels in the living room, and I went to JCP as usual. I was shocked to find out from a salesperson in the drapery department that they no longer stock the Supreme drapery items in the store — they are only available online. If you want to see the fabric colors in person, all they have now are fabric samples behind the counter. The salesperson then told me that I should order whatever I need right away because they are discontinuing the JCP Home brand items that will compete with the new Martha Stewart line that is coming. I can’t believe that Penneys would get rid of their own brand that they’ve been selling for as long as I can remember! I’m a fan of Martha Stewart, but I’m not happy with this decision! I wonder which other JCP Home items are going away because of this deal with Martha?

  11. I read an article online over the weekend that explains why the JCP Home line is being discontinued when their items compete with Martha Stewart products. Martha Stewart’s company is claiming that Macy’s stocked and priced Martha Stewart products in a manner that favors private-label brands. It sounds to me that Martha wanted to make sure JCPenney’s private label brand wouldn’t compete with her products, so she somehow convinced JCP to discontinue their brand on those items if she agreed to a contract with them. How Ron Johnson still has his job is a mystery to me! Talk about giving away the store…those home items were one of the things that kept me coming back to JCP over the past 35 years.

jillcataldoheadshotI'm Jill Cataldo, founder of Super-Couponing® workshops and author of the nationally-syndicated newspaper column and video series "Super-Couponing Tips" enjoyed by over 20 million people each week.

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