It made the lead column in London’s Financial Times. It should be on your radar too. One of America’s iconic retail brands, employer of tens of thousands, a brand that appeared to be doing everything right — including the hiring of the most vaunted “genius” in retail, Ron Johnson supposed creator of the Apple Store, is tanking. Big time. Big Big time. Sales off 31.7% DURING THE CHRISTMAS QUARTER! Publicly eating crow. Sales down $4.3 billion over the previous year. That’s billion with a ‘B.’ Wow. But more than just the potential schadenfreude seeing this dude fall, of which I have no interest, the real story here is the basic stupidity of his decision making. DID THE MAN DO NO QUALITATIVE RESEARCH? 4.3 billion dollars can pay for a lot of focus groups. One on ones. Projective techniques. How is it possible that Mr. Johnson, and his patron saint, Bill Ackman, hedge fund genius and owner of Pershing Square (who owns 18% of Penney’s) could have gotten it so so so wrong? And here’s where the tragedy gets really bloody. Johnson famously ridiculed the “sale driven” marketing techniques that have fueled Penney’s (and just about every other retailer since the dawn of time). He introduced an EDLP (every day low pricing) concept that supermarkets have toyed with over the years. But he missed out on one crucial aspect. He didn’t, it seems, bother to talk to any of Penney’s customers. Maybe he talked to Apple Store customers — which, imho, don’t seem to be Penney customers. Maybe they are. But $4.3 bill would seem to indicate otherwise. And, in the crowning admission of humble ‘learning,’ Mr. Johnson said, “We learned that she (the customer) prefers a sale. At times she loves a coupon.”
Loves = Emotion = Qualitative truth.
EDLP = Rational = Qualitative yawn.
I just hope they can get smart and start listening to the right people, and finding their true emotions, and fast, before there are massive and debilitating layoffs all across JC Penney country.
Kerfuffle? I have another word for it.