The lack of vision is what’s hurting the JC Penney and Sears brands.

Tom Dougherty, CEO – Stealing Share

9 October 2014

JC Penney and Sears. Case studies in blindness.

The news in the retail sector today focuses on the contrasts between two old giants in the US retail market: Sears and JC Penney. According to one report, JC Penney is doing better than Sears in its attempt at turning things around. What I find amusing in the report is the acceptance of the status quo as the end game.

As you recall, JC Penney fired Ron Johnson some time back as the former Apple executive tried to lead the retailer into a new model of pricing with a de-emphasizing of discounting and promotion. It did not work.

But according to new reports, JC Penney has turned things around by reintroducing in-store promotions and private label brands to bring in more shoppers. What a great model this is. Discount and promote so that more shoppers will be lured in and will spend money on products without deep margins. JC Penney has once again taken its earned position of just another run-of-the-mill retailer.

According to recent reports, JC Penney is doing better. But it's still blowing it.

According to recent reports, JC Penney is doing better. But it’s still blowing it.

Sears, according to the report, has tried to be a quasi-membership store. Hoping that what makes Costco so successful will bleed over into the Sears brand. This is visionary brand management at its zenith. Monkey the processes of another successful retailer without making real changes. A sure bet.

People choose Costco because it requires membership. Sears failed to notice that shoppers go to Costco because it promises retail discovery. Costco makes its money not on what I went there to buy but rather what I came home with as an additional and unplanned spend.

In both of these cases, reinventions of the brands are needed. As a result, they can reinvent the retailing market. Instead, both are relying on the same pool of retail experts that are responsible for the crazy mess the category finds itself in today.

I put it to you that Ron Johnson was almost right. He recognized that playing a “me too” game is a recipe for disaster. Eventually, it leads to failure.

The market needs reinvention. Sadly, the control resides with shareholders who have no stomach for investment in the future. They expect and get quarterly results. What we get is a market filled with vastly similar models and stores filled with vastly similar merchandise. The loser here is the shopper. Sears and JC Penney? Well, they lose because they have no vision.


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