Monday, April 15, 2013
The turnaround that is not working (yet?)
So after losing money for more than a year, one of the biggest retail chains in the U.S. finally fired its CEO (who has been very successful before arriving to his new post). I am talking about JCPenney®, that big retail chain that has been lately getting hammered at the stock market and shunned by the consumers. The strategy that was being applied was to have everyday low prices instead of discounts and coupons. The core customers were not happy with the change as it was not adequately explained to them about the benefits or just plainly ignored by the company and that is how the retail chain lost so much money. I use to like JCP as my father had a store credit card with them like twenty years ago but it has now been several years that I have bought anything from them (DISCLOSURE: I don’t own or cover JCP stocks, bonds or whatever is out there so my opinion here is unbiased). As I was reading in one of the article, it was shown that how hard it is to change the habits of people which have been in place for several decades. Not everybody wants low prices every day since JCP is a store where you are not under any compulsion to buy every day or even every week. If there is a sale then you go once in a while and not every sale you rush into buy stuff. As a human nature (which clearly JCP did not understand or choose to ignore), we sense an urgency if we know that something is not going to last long. And this urgency you can see all year long at retail stores and especially Black Friday when people go literally crazy to get the best deals.