Watching JCPenney’s fall from grace has been like watching a car wreck. Like others, this wreck could have been avoided with more focus and less hubris.
Here are some nuggets of wisdom a (highly compensated) CEO is learning the hard way as expressed in their earnings call:
“…we learned she prefers a sale. At times she loves a coupon and always, she needs a reference price. …she needs to feel she added value to her family through the saving she got from being a savvy shopper.”
Lesson Learned(?) – Even though you may think you are selling a product, customers are actually buying the whole ‘experience.’ Why didn’t JC Penney know this to begin with?
We “tried many things to help the customer understand that she could shop at any time on her terms.”
Lesson Learned(?) – If you innovate around customer goals you can dominate the market. If, instead, you fall victim to your own hubris and try to help the customer understand that their goals are all wrong, bad things happen.
“Our return to growth will be dictated by our customer and how we connect with our core customer.”
Lesson Learned(?) – Connecting with customers is the only way to grow. Interestingly, this is a lesson that JC Penney seemed to know on some intellectual level. In an earlier post I wrote both JC Penney and Home Depot said they would focus on serving customers to grow their business. Stock performance since the time of that post? Home Depot: +96% and JC Penney: -45%
The pivot point is that despite guidance to the contrary, JC Penney may still not understand how important their customers are to their business. For a business, it doesn’t get much more dangerous than that!