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In Between the Numbers: Penney’s Big News

June 15, 2011 - 1 Comment

 Thinking about the hiring of Apple’s Ron Johnson as the next CEO of J.C. Penney Co.

 I think it’s a brilliant move. for these reasons:

 Because – most of all – it signals that  J.C. Penney has determined that its future will be more dependent  upon its ability to create value through the  delivery of a differentiating, sustainable, and omni-channel brand experience than by the differentiation of its products.

 It signals an acknowledgement that apparel and domestic product is largely commoditized.

 It signals an acceptance of Wall Street’s insistence that the same-old merchant prince approach to the business is not going to move the dial.  

 Bravo, Penney’s.

 Johnson inherits a business that has declined some 11% in revenues since 2006, that doesn’t have iPhones and iPads to dazzle shoppers and drive traffic, and which has a brand aura more akin to Sears than to Apple. 

  He has huge challenges in front of him.   Like – it should be said – most of US retailing.

 But I like the odds.

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  1. What will be very interesting is to see how well JCPenney adapts to some of the lessons Apple has learned BEYOND the amazing brand, customer experience, store design etc. that it is famous for.

    One of the biggest impacts of Apple’s launch into retail was to absolutely shatter its existing distribution channels. Almost overnight, the number of independent Apple resellers diminished greatly and the relationship with big boxes like Best Buy, CompUSA and Circuit City was dramatically changed as well.

    It will be truly fascinating to see if Johnson can bring the same willingness to disrupt the channel to JCPenney, whose “discount department store” format is just as ripe for channel upheaval.