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JCPenney Issues Mea Culpa and Tries to Repair the Brand

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JCPenney Issues Mea Culpa and Tries to Repair the Brand


A few weeks after CEO Ron Johnson’s exit from JCPenney, attempts to repair the brand and regain customers are already in motion. One of the first salvos in the battle to regain market share started occurred today with what amounts to a “We’re Sorry” video asking shoppers to come back. It’s an interesting approach this already getting buzz on the news networks and social media. The next step is to see if it draws more foot traffic and then sales. Still, it won’t be the only driver. Under Ron Johnson, JCP went to an Everyday Low Prices model like Wal-Mart to alleviate margin pressure and some of the cyclical nature of the retailing model. They also started adding new experiences to the stores for both celebrity and house brands that drained lots of capital to create. None of it improved traffic or sales and Mr. Johnson lost his job in less than 2 years. Now that Mr Johnson’s predecessor has been reinstated as CEO, the company has moved back to the old promotional model and is reaching out to customers they lost or disappointed during the Johnson years with this video:

Will it work to heal the brand and get people buying again? History suggests it probably will. At least with some customers, since many shoppers want the company to simply “fix it” so they can come back and be even more loyal than before. You can already see that sentiment in the comments on social media. The larger challenge will be that JCP saw loyal customers leave due to the change in inventory and shopping experience. With the company’s finances and crushing debt load, it seems like it will be hard pressed to bring back the inventory and experience they loved anytime soon without major expenditures that the company really can’t afford. So what can small business owners and entrepreneurs learn from all this?

First, even the big guys make mistakes. Second, if you find yourself in a situation like this, it doesn’t take a lot of money to replicate what JCPenney did here. Basically, they created a video, pushed it out via social media and let the web take it from there. Finally, what you can do that they appear to have missed is add an incentive for these wayward customers to return. It’s very interesting that there is no mention of a loyal customer or apology discount involved with this video. Given that JCP has already started increasing prices (up to 50% in some areas) to make the promotional model work again, this would be the perfect opportunity to drive guests to Facebook or the JCP website to download a coupon tied to this campaign. It would give them the ability to truly track ROI and grow their ability to listen to customers online, which according to the video, is kind of a big takeaway from all this. Don’t make that same mistake. Give your customers more of a reason to return than just a warm feeling and the lifetime value of each of those customers will far exceed the short term margin pressure.

Is your brand in need of a tune up? Click to send us a note and one of our strategists will be happy to follow up with you.


Image copyright JCPenney

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