The Grand Plan to Save J.C. Penney

What do J.C. Penney and Apple have in common? Not much. They both have retail stores. One is high-tech; another is “old school.” They may be very different in product and style, but they both had (or have) ties to Ron Johnson, formerly Apple’s head of retail and now the CEO of J.C. Penney. Fresh from Apple’s successful retail stores, he was hired to turn around J.C. Penney’s tired brand and retail stores.

You can see the influence in J.C. Penney’s new logo and advertising concept. But after 15 months on the job, Johnson and J.C. Penney are still struggling.

A Forbes.com article, “J.C. Penney And The Future Of Retail,” revealed Johnson’s grand plan to revive the J.C. Penney’s brand. The news is there isn’t really anything new about the strategy. Many retail “big box” stores are already doing the same things. In addition to grouping merchandise by gender or age group, retail stores are creating boutiques featuring designers or manufacturers within the stores. The article refers to the central area in many department stores that contains cosmetics and perfume brands like Estee Lauder or Channel. Even within gender-specific departments like menswear, you’ll find areas dedicated to brands like Polo or Tommy Hilfiger. 

While many stores have had this concept for years, the difference is J.C. Penney’s strategy extends these “stores within a store” to the entire store. It’s the same concept used in selling real estate. Take a house that has been on the market for a while. The house has no excitement. Prospective buyers come and go without making an offer. It may not be the house at all, but the way it’s presented. 

In come the home stagers—those creative designers and decorators who paint the walls, clear the clutter, rearrange the furniture and add a few accent pieces. Suddenly, the house is the hottest one on the market. J.C. Penney is counting on a form of staging to increase excitement and draw shoppers into their retail stores. Unlike other brands that have a few boutique areas, J.C. Penney is going to apply the concept to the entire store.

If you’ve ever been in an Apple Store, you know the feel, the vibe. New York City’s Apple Store in Manhattan is a glass cube, full of all the latest Apple products that everyone can’t live without. Even Johnson couldn’t turn J.C. Penney into the next Apple retail-type giant, but he believes that he can use his experience to make a substantial difference.

Another benefit of bringing in retailers to sell merchandise within the J.C. Penney store is cost-savings. Leasing space to retailers is one way to bring in revenue. These retailers often hire and pay their own employees, with a cost savings to J.C. Penney, who doesn’t have to hire (and pay) employees in these areas. 

Apple is known for its electronic and digital product lines. The branding is far from J.C. Penney’s reputation as a low-cost retailer. With competition from online retailers, it will be more difficult to keep big-box stores open and profitable. Johnson’s experience with large retailers like Target and Mervyn’s should give him credibility. Only time will tell. Penney’s is rolling out the new concept gradually, so though people may have heard about it, they may not see it in their locations. To work, the new concepts need to be experienced by shoppers who can get as excited about the merchandisers J.C. Penney brings into their stores as the launch of the latest version of the iPhone.  

Photo Courtesy of Wikimedia