How An Apple Star Lost His Luster At JC Penney
nytimes.com
nytimes.com
They were always good at stocking good quality stuff at decent prices. I happen to be big & tall guy and have a terrible time finding clothes -- I can't shop at most mall retailers at all.
The problem with the transformation is that they did too much, too fast, and didn't understand the business. Johnson didn't just stay away from HQ, he never went to a store. THe shining halo of Apple conceals a lot of problems at the Apple store as well... The place is packed, but people have no idea how to actually check out. I usually see one or two frustrated shoppers give up whenever I am at the apple store.
They did things that were great ideas, like not stuffing racks into the aisles and getting rid of the cheap gizmos and merchandising. But they did everything overnight and didn't replace the dingy old carpets that were concealed by the racks. Good ideas implemented in a vacuum don't always work out well.
And, since tall guys aren't cool enough, they slashed the inventory of clothes that fit me.
I felt bad when I bought a bunch of shirts for $10 on,ine that are priced at $40 elsewhere in the big fire sale last week.
I discovered Land's End recently. My mom bought me some clothes for a gift and I found them to be simple and decent quality. I always thought it was a catalog business for old people to shop but I guess I got old enough to no care about brands, I just like it when clothes don't fall apart at the seems after a wash or two.
> “Ron’s response at the time was, just like at Apple, customers don’t always know what they want,” said an executive who advocated testing. “We’re not going to test it — we’re going to roll it out.”
Uh, OK...as others have pointed out, it's a far different game selling top of the line future-thinking tech products and selling affordable clothing...and this difference would be especially pronounced in the context of this "customer doesn't know best" philosophy.
I mean, that's partially true no matter what the price point of the product is...but the difference is that when you're selling expensive products with high profit margins, you have much more runway to deliver that special thing/innovation that customers don't yet know they want. How was that not obvious to Johnson?
There is something to be said about drinking your own kool-aid (marketing). It only works for a top/luxury brands. Apple devs can keep believing they work the for the greatest company and they would be right. In most other cases it is important to not drink your own kool-aid. Keep telling customers about all the cool and hip features and products, but always be looking over your shoulder, always test, always doubt.
Johnson tried to do that, and ran into two problems.
1 - He's not Steve Jobs, nobody is. He simply didn't have that 6th sense to make business decisions blindly and almost always be right.
2 - He didn't have that much freedom. Jobs would have stayed in power until Apple went bankrupt. They were that desperate and he had that much power.
Johnson just seemed to think he could change stuff he didn't like with no iterations and no need to think it through. Plus he had no special focus, unlike Jobs with one key product at a time.
How did this make it into the article? Was it a company-wide mail headed, "Open Letter To Me"? Is this his personal note-taking strategy, and he let the Times read it?
This story again proves that flexibility and desire to learn matters much more than hard skills and experience. Apple approach only works for Apple.
This sounds like armchair quarterbacking. It's easy on the surface to criticize, but we don't really know all the factors that lead to Johnson's decisions. I don't think it's fair to try to boil it down so much.
It's like someone criticizing a development project without knowing the budgetary or time constraints. Yeah, it would have been better to do it _this_ way, but _that_ way assumed an infinite budget and time.
Have you been in a Pennys? It's about as upscale as Dennys, and as hip as the dentist. On the other hand, it did offer consistent value and a consistent shopping experience. He tried to do in a year, what needed ten years or more to do, and failed. His failure is not unsurprising to any of us who have been in the store. Pennys, was so un-hip it almost became hip, but it rightly so had a image of dowdy women wearing housecoats shopping on a Tuesday.
I don't know the guy, but I assume he's not stupid, so if what you believe is so obvious, it must have been obvious to him too. But, for some reason he chose a certain strategy and we don't know exactly why. We don't have all the data.
All I'm trying to say is that it is easy to criticize, but I don't feel comfortable criticizing someone who knows a lot more than me in a certain area.
It's fucking hard to be CEO and I don't feel comfortable being an armchair CEO.
It didn't seem like he knew what he was doing. Most people knew that he was going to land on his ass. He duly did. Criticism fully warranted, armchair or not.
Also, it's actually very common for someone who has considerable knowledge in a certain area to be wrong. The market/technology/customers/etc can all pass them by, while their thought process remains stagnant.
Uh, are you suggesting that Johnson was forced to conduct actions that are consistent with moving JCPenney's to an upscale bracket? Because usually that kind of move costs much more money than maintaining the status quo.
It's fair to sympathize with a CEO had no options but to keep a slowly sinking ship from sinking faster. However, I when a CEO accelerates the sinking by his own initiative, it's fair to scrutinize his decisions.
> How do these CEOs make the noobest mistake?
To me it sounds unfair. It sounds like the OP thinks he/she could be a better CEO. That feels like armchair quarterbacking to me. (But I'm wrong if OP is Tom Brady or an expert in the field.)
As far as I can tell, at least.
Pennys was more middle of the road, more like Macy's for the lower middle class.
It is a segment that is declining overall. I think that has more to do with the legal/tax/financial framework that makes big box retail grow like a weed.
There's plenty of profit to be had in the higher end, selling "the experience". Nordstrom, for instance, is doing just fine. Being able to walk into a store, talk with knowledgable salespeople who can get a feel for your style and desires, then recommend products that suit them is a value that some customers are willing to pay for.
Johnson's background with Apple was in creating the latter sort of experience, but it simply did not match with the priorities of the JCP customer, and was driven by the notion of "build a better store, and the customers will come", without enough research into where potential gains and losses were.
There's nothing wrong with getting into a logistics competition. You just have to win.
Personally, I do not buy any clothes at all from "luxury" stores like Nordstrom's. I buy some clothes online, and basic clothes like socks from Target. I just don't enjoy feeling like a rat in a maze, which I inevitably do at clothing stores. And I don't want salespeople bothering me. The value of all this stuff is pennies in China, so I feel like we are really getting overcharged in many cases.
I think that in JC Penney's case, excessive discounting may not have been a merchandising strategy but rather a symptom of allocation mismatches in their supply chain, leaving them with excess inventory (and associated costs). Their mistake was hiring a merchandising guy who didn't get this and tried to eliminate the discounts without fixing the underlying allocation problems.
"He revoked access to Penney’s sales data for all but the top executives. But that took away valuable information: the buyer for, say, men’s big and tall could not see how women’s plus size was performing."
I'd rather risk having my competitors occasionally get some of my data, than risk not sharing data freely within my own team.
The competition is likely already getting those signals anyway, and the larger your organization, the more likely that you've got many internal blind spots that you really need to address.
Can you change one of these beasts? I maybe just attempt to rebrand them?
SV is all about show and lights? The article is sensationalizing. Most SV companies I know are about knuckling down and delivering. Parties about a CEO? Maybe circa 2000.
Now let me see where else I can buy some decent clothes, dishes and sheets...
Actually an interesting question. I remember going to department stores, and malls more often. But thinking about it, I haven't been doing that lately. So where to do people get their clothes, dishes and sheets?
I pick stuff up on Amazon often. That would be tough with clothes having to send them back many times when they don't fit. Maybe I just reached a point when I could afford to get more quality stuff that doesn't need replaced so I just don't shop for it as much.
Is there a website for example that if I send my measurements, they can show me a couple of models dressed in a few styles, and I would pick which ones I like (like Netflix does with movies). It would figure out my style, then the would just filter or sort clothes I would like and would fit me. I would pay for that. It would save me time for example.