Ok, that might be a little harsh, but JC Penny deserves it. After they tossed Ron Johnson who was repositioning the stores really and brought back the guy they fired for unacceptable performance; they then hired a home improvement CEO to fix their situation. He has now hired a home improvement CMO to help him. Her job is apparently to use digital wizardry (social media etc) to drive more sales, which will either be online or in-store.
How is that going to work out well? Are they trying to attract Millennials to a store those kids think their grandmother’s shopped in? (Who else is social media focused on? Gen-X, ok they think Penny’s is their boring parent’s store), and if they get into the store is it not going to confirm their every expectation that it is their grandmother’s retailer? And if they instead get them to shop online, why will they like the merchandise selection? Ron Johnson’s plan, which really did change the store, might have benefited from a stronger social media push to get new customers faster as their old ones fled the new store. But how on earth is the root cause of JC Penny’s continuing decline a social media failure?
How stupid is this? Pretty stupid in my opinion. But let’s look at who they hired, as the Board continues to amaze me at how many mistakes they can make. Though this set may finally do them in.
The hired a guy that supposedly turned around Home Depot by focusing on supply chain. Indeed Home Depot has managed to bully their vendors into many concessions for the privilege of continuing to sell through Home Depot. But Home Depot has a dominant position in the category. Exactly what leverage is Penny’s going to use to abuse their suppliers?
They hired a CMO who lasted less than a year and a half at Lowes (another home improvement retailer) whose expertise is digital marketing. How does that really help an also-ran retailer like JC Penny break out. Oh wait they fired the guy that tried to do that. So what do they want? More sales. When do they want it? Now. Will this work. Not in my opinion.
The JC Penny Board of Directors is clearly approaching legendary incompetency status as did the GM and HP boards before them.
And we shall see. As I said in my post two weeks ago, these bigger retailers can last a long time on their glide path to extinction.