As the Holiday season gets under way, one iconic retailer has more worries than most. J.C. Penney has suffered three consecutive quarters of losses despite, or perhaps because, of attempts to reinvent the brand. Last November, new J.C. Penney CEO Ron Johnson started making changes to combat historically sagging sales. Johnson had great success with innovative work at Apple and Target, but things aren’t working so well with J.C. Penney. How long will the company have faith in his leadership? Today’s roundup looks at J.C. Penney’s efforts and what other business owners can learn about improving sales and turning a brand around.
Shop ‘Til You Drop
Priced to move. For about a year, J.C. Penney has been making changes. The boldest move, according to observers, was Johnson’s decision in February to radically change the price structure at 1,100 locations. Johnson planned to eliminate about 600 sales a year that were popular with shoppers but tough on profits. Instead, the store put in place a three-tiered pricing structure that permanently lowered prices on all items in the chain by about 40 percent and offered month-long sales on select items and occasional clearances throughout the year. Bloomberg Businessweek
Everything must go. Johnson’s unorthodox moves and the resulting plummet in retail sales have led many to question his strategy. One blogger suggests there are at least five lessons other entrepreneurs can take from what some already call a “pricing strategy failure.” From the beginning, Johnson has admitted his approach is unusual but insists he still believes it will pay off. The question remains whether changes instituted to reverse declining sales will do irrevocable damage to the chain instead. Hammad Siddiqui Blog
Lessons in Leadership
Project your values. A big part of the changes at J.C. Penney, whether right or wrong, have to do with the faith placed in Johnson as a leader. Certainly, some of this faith is based on his past successes. Johnson was the force behind Apple’s revolutionary retail stores and Target’s “cheap chic.” But there’s much more to leadership, explains entrepreneur and consultant Gary O’Neil in this video. Real leadership is about how you embody your values, not simply the systems you put into place. N2ITIV Solutions
Be authentic. There are many qualities that go into great leadership. John Twohig, co-founder at social media marketing agency the Ahain Group, gives a rundown here of some of the basics. They include connection, vulnerability, courage, authenticity, and more. All small business owners are leaders in a way. How you incorporate the elements of leadership in the decisions you make each day is extremely important. Your leadership shapes your company and determines its ultimate success or failure. Tweak Your Biz
X marks the spot. Early reports on J.C. Penney’s losses have focused on how customers are clearly rejecting the changes in the company’s pricing structure. Regardless of what the end result may be, customers are crucial to any business. Know every segment of your customer base and the preferences of each when it comes to the products and services you offer. For example, Rieva Lesonsky warns businesses in general not to leave generation X out of the picture. This crucial group sandwiched between the Baby Boomers and the Millennials is a force to be reckoned with. Ultimately, make sure you are not leaving anyone out when considering your marketing, pricing, and overall strategy. Grow Smart Biz
Loyalty works both ways. A company can get along very well if it always pays attention to its customers and always treats them well. But, as business owner Anthony Karibian explains in this post, when a trusted business stops being competitive and treating you right, all bets are off. Karibian tells the story of how a trusted cab company opened the door to a competitor simply by letting its prices slowly increase while at the same time decreasing value. bOnline Blog
Pay attention to marketing. Marketing is another key to success, particularly if that marketing communicates effectively with the customers you are attempting to reach. Effective marketing also requires creativity, but don’t worry if you’re not the creative type. Check out these tips for effective and innovative marketing. You don’t need a big budget or a genius for promotion says guest blogger Lance Trebesch. If you have some suggestions for effectively marketing a business, please share them with our community below. The Frugal Entrepreneur
Get the latest headlines from Small Business Trends. Follow us on Google News.