Playing the JCPenney blame game
No, it's not a new promotion, but the latest excuse for holiday losses. OK, sure, the market hasn't been at its best, but shares of JCPenney tumbled last week after the ever-struggling retailer posted a loss for the holiday quarter, despite improving category sales trends.
Interestingly and/or astonishingly, people were actually surprised about the results — or at least it was spun that way in the press — but we weren’t. JCPenney had been at the bottom of our 2014 Customer Loyalty Engagement Index, which while not quite a market model, correlates highly with positive (and negative) consumer behavior toward a brand. And, being at the bottom of the list means that it isn’t likely consumers are going to swarm to the store in the coming months. And, they didn’t, a kind of retail version of the old Yogi Berra observation, “if the shoppers don’t want to come to the store, you can’t stop’em!”
But you can blame someone! Despite the improving sales trends seen by other retailers, CEO Mike Ullman noted in a conference call last week that the company is “still trying to recover from the self-inflicted wounds of the previous strategy.” The wounds Mr. Ullman was referencing were those of ex-Apple VP Ron Johnson, who, to be sure, made a muck of things, and who we blamed for the JCP debacle back then. But to be fair, that was more than two years ago, and in a marketplace that moves at the speed of the consumer, Mr. Ullman hasn’t managed to make many inroads. Maybe a tiny in-path, but not much more than that.
According to the 2015 Customer Loyalty Engagement Index, JCPenney, which had been perennially ranked last in the Department Store category, moved up to next-to-last, just ahead of Sears, a dubious achievement, but any increased level of engagement is not something to be discounted.
Full 2015 category rankings look like this:
1. Marshall’s / TJ Maxx
For the quarter, JCPenney said it lost $59 million, or 19 cents per share and shares slid almost 10 percent in aftermarket trading to $8.20. So the change of rank on the list should be a precursor of progress as regards consumer engagement with the brand. So a tiny glimmer of light at the end of the tunnel.
But as writer and social commentator Havelock Ellis noted, “What we call ‘progress’ may just be the exchange of one nuisance for another nuisance.” And when your brand is wracked with the nuisances of consumer disengagement, problematic product mix, confusing pricing strategies, and undistinguished and indistinguishable brand positionings, odds are six to five that the light at the end of the tunnel really is an oncoming train.
(Photo by Sam Howzit.)