What Can Small Businesses Learn from the Mistakes of J.C. Penney?

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The past marketing troubles of J.C. Penney have been well chronicled. As an established advertising agency in Austin, we were fascinated to learn that it was a Dallas SEOcompany that landed the major retailer in hot water with Google. The early 2011 incident lead to a very public debate on white hat vs. black hat SEO, which was carried out over industry blogs for months.

So now, few experts are surprised that the company continued to make more big mistakes in the two years that followed – mistakes that required an apology via a major ad campaign. For those unfamiliar with the events, here are the errors J.C. Penney is presumed to be apologizing for in its current “come back” television ad campaign:

  • Hiring former Apple executive Ron Johnson to rebrand its stores and reshape the image of the company
  • Allowing that rebranding to be marked by total store redesigns, wherein the stores resembled more upscale department stores like Macy’s
  • Unpopular “denim bars,” which were in-store stations designed to help shoppers find the “perfect jeans”
  • Allowing the brand reshaping to be characterized by odd, Apple-esque touches such as arming store employees with iPod Touch devices

By most accounts, the iPod devices had some strange functions for such a traditional clothing retailer. For example, employees were trained to approach customers and offer to ring up purchases away from the checkout counter with the iPod. They were also instructed to offer to search for alternate styles or sizes on the company website using the devices. Another shift that consumers did not respond well to was a pricing structure that left most confused as to whether the store offered discounts, everyday low prices, both, or neither.

The culmination of these changes affected the company’s entire profile. Profits took a nosedive, with a $5.5 billion decline in revenue since 2009. Reports of dispirited staff in local J.C. Penney stores led to an overall demoralized company culture. All of this can teach small business owners some big lessons aboutcustomer loyalty, valuing employee feedback and taking baby steps when it comes to rebranding.

So now, J.C. Penney is changing – again. An interim CEO is filling in until a permanent replacement can be found, and hopefully the company’s worst mistakes are behind it. The “come back” campaign appears to be making a big impact, because it is telling consumers they were heard, and they are valued. In the eyes of this advertising agency in Austin, the mistakes of J.C. Penney are something that all small businesses can learn from.


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