JCPenney Disappeared

Ron Johnson built Apple's retail world. In 2011 he left to join JCPenney as CEO with a mandate to save a dying brand. His diagnosis was that JCP's customers were being manipulated by fake sales and endless coupons. He set out to fix that. No more manufacturer discounts. Everyday low prices. A clean, honest retail experience. In-store boutiques. Essentially, an Apple store sensibility brought to Middle America. It was visionary on paper. It was a catastrophe in execution.

What was missed was who JCP's loyal customers really were. She wasn't an Apple store browser excited by clean design and premium experience. She was a value-driven, coupon-clipping, sale-hunting loyalist who had shopped JCP for decades because of exactly the promotions being eliminated. The "fake" sales weren't manipulation to her. They were the whole point. They were the thrill of the hunt. They were why she came. When the coupons disappeared so did these loyal customers.

Sales dropped 25% in year one. Nearly $1 Billion in losses followed. Johnson was out in 17 months. JCP never recovered and filed for bankruptcy in 2020.

Bottom line: The customer is king and queen. Understand your customer. Johnson arrived with answers before he took the time to understand the JCP customer. He fixed a customer experience that wasn't broken. He confused his own taste for customer insight, and a century old American brand paid the price.

We find the breaks. Fix them. Then move on.