JCPenney’s Michael Francis Resigns
Yesterday it was announced that JCPenney’s President, Michael Francis, resigned immediately.
That’s tough news, in a difficult time, for the Company’s shareholders and CEO Ron Johnson as well as rank and file employees.
Just last month Johnson elected to walk back the “fair and square pricing” strategy launched in January of this year. I agreed with (and still do) Johnson’s concept of dumping inflated mark-ups only to support phony “sales”. But that strategy seemed to confuse consumers.
JCPenney Needs To Focus On Product – Pronto - that was the headline of my post on Feb 8th. I said, “Creating the right product is difficult. Not impossible, but definitely difficult.
By “right” I mean – function, aesthetic and quality consistent with the customers anticipation of benefits and price expectations. But “right” also means – product the target customer desires, providing the benefits the target customer believes are essential and product that creates a connection between the brand and the target audience. If a retailer can nail all of those aspects, and believe me it is no simple task due to multiple moving parts, they may just sell a few widgets. And if they sell a few to customers who become brand advocates – the retailer may just be successful”
JCPenney Marketing Must Focus On Product - was the headline of my May 17th post. There I opined that JCPenney suffers from the same malaise dragging on Best Buy. The majority of JCP’s product can be purchased elsewhere – and probably on “sale”. Just like Best Buy’s case, if consumers can buy what you sell cheaper or easier elsewhere – THEY WILL!
I also said this, “A clear path to winning back its coupon-cutting customers and boosting sales is to shift the emphasis of the marketing strategy from positioning the brand to selling the product. Sounds simple and it can be – but it may be difficult if the Targetesque marketing strategy continues to drive the bus.”
JCPenney’s Problem Is Product Not Pricing - was the June 8th headline. There I said, “JCPenney does not need to scrap its pricing strategy. Instead it should be communicating product attributes, benefits and virtues…even going so far as to create the perception that JCPenney’s products exist at the intersection of quality and value. Highlight the construction of a dress, the craftsmanship of a handbag or performance of a swimsuit – then connect a great price to that product. Feature the merchants who are charged with globe-trotting sourcing and negotiating the best price on every product JCPenney sells.
JCPenney has spent far too much energy on operational activities and perhaps not enough focus on product. There may be better product in the pipeline – but for now promotional pricing is about all they’ve got.”
Controversial Spokesperson – Ellen. Don’t get me started on this one.
Now JCPenney and Ron Johnson, in particular, are in a bind. Their much ballyhooed pricing strategy has blown up and Francis, the former favored son of Target Inc.’s marketing group, has hit the trail after just 8 months. Francis leaves in ok shape though. His $12,000,000 signing bonus amortizes to roughly about $75,000 per day worked. Not bad for having to live in Plano.