J.C. Penney’s board has ousted CEO Ron Johnson. The move wasn’t a surprise: Dissatisfaction with Johnson and his attempts to reinvent the struggling retailer had been growing for months. What’s interesting are the similarities between Penney’s path and the trajectory of many regional media.
Johnson arrived at Penney’s with the purest intentions, trailing the scent of success from Apple’s retail stores. Starry-eyed board members no doubt expected Johnson’s digital magic would disrupt and revolutionize the dowdy look and disappointing performance of Penney’s.
But as with regional news operations, J.C. Penney was viewed as out of touch not because of its color scheme or store layouts but because of the content (its inventory). The audience had moved on.
Rather than meet customers on their terms, Johnson fought battles on the margins, eliminating coupons and blowout sales and focusing on cosmetic issues like the corporate logo. Meantime, he alienated the core audience. Value-conscious shoppers who really liked clipping coupons and feeling like they got a good deal at this week’s sale were left wondering what happened.
In truth, Penney’s never had a reputation for trend setting. It was a good place to find underwear, socks and sensibly-priced basics. It was the daily newspaper of clothing. But as better stocked, more diverse shopping options opened up, Penney’s lost its niche of non-nicheness. Ultimately, Penney’s fell out of touch with its most passionate fans and couldn’t or wouldn’t do what was needed to win over new ones.
Changing any traditional business is hard. Numerous media clients now know this – some with the benefit of research, others with 20/20 hindsight. Whether selling handbags or pushing data, you need to constantly engage and connect with your consumers.
J.C. Penney could have used social media and other techniques to reach out to shoppers and would-be shoppers. Instead, it tried to razzle-dazzle investors with eyewash about all the revolutionary things they were doing. In the end, shoppers didn’t buy, the stock market didn’t believe the fairy tale and the company wound up with a revenue slump and declining share prices.
In the wake of Johnson’s departure, a spate of stories have featured erstwhile Penney’s customers looking hopefully toward a return to the old way of doing business. This might seem comfortable, but it’s wrong. Going back to what you were doing won’t help win back your customer base, for retail nor news. Those customers found better solutions while you were pissing them off.
A better strategy is to embrace change and dedicate yourself to finding and recognizing your audience, now and for the future. Take the risk – find new customers. Use social media to connect, initiate dialogue and listen to what your community is saying. It won’t always be pleasant, but it provides insight about who cares and wants to connect with you and your brand.
One ill-fated update for Penney’s was trying to rebrand itself as “JCP.” That three-letter acronym was supposed to convey post-modern hipness and distance from historical roots, I suppose. Instead, it just underlined how out of touch Johnson and the rest of his commuter executive team had become.
The takeaway from the decline and potential fall of Penney’s: You can leverage all the technology and tools at your disposal, redesigning websites and revamping marketing messages, but if you lose touch with your community, you’re toast. If you value meaningful communication and keep an open mind, you’re a treasure. That’s where regional media still have an edge.
The community is changing: Customers are evolving and new arrivals don’t know the history of your brand. But you still have an advantage – you know your own history and your place in the community. Your challenge is to keep up with changes in the marketplace and deliver content that will be valued.
It requires dedication. It requires commitment. Sometimes, it requires new partnerships and alliances that would have been heresy a few years ago. Most of all, it requires open, honest communication with the community in every way possible (including social media). It’s how to thrive, not merely survive.