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Searching for Fresh Air

Can JCPenney’s transformation plan really work?

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We’ve all been watching and waiting for months now. Ever since dowdy department store chain JCPenney announced it hired Apple executive Ron Johnson as ceo, the industry has been holding its breath to see what changes or fresh ideas Johnson would bring to JCPenney, and possibly the department store sector as a whole.

That waiting ended last week when the retailer hosted a media event in New York to reveal a host of new ideas that some might call crazy, while others would say ambitious or maybe even brilliant. “JCPenney just blew up its brand – in a good way,” reported Forbes.

The far-reaching plan touches every aspect of the company’s way of doing business, from product pricing to store layout and branding. Changes began taking effect on February 1, starting with a new pricing strategy called “Fair and Square,” which simplifies prices and sales into three tiers. Promotional materials will be less frequent and more targeted. There’s also a new logo, featuring a square shape and red, white and blue palette.

Thankfully, there’s a lot of attention to store design, as well. Johnson’s plan calls for overhauling JCPenney’s store environment from a sea of racks into a collection of specialty shops (as many as 100!), including a new Nanette Lepore shop and Martha Stewart Kitchen. These shops will surround a new center concept, called Town Square, that’s designed for hanging out and special events, like free back-to-school haircuts or ice cream socials.

We’ve seen ideas like these implemented in department stores before but the way in which JCPenney is making these changes represents some out-of-the-box thinking. Rather than the traditional “create a flagship, test it in one location and then a few years later start rolling it out across the chain” way, the retailer will start adding two to three shops each month at its 1000-plus store fleet, from August through 2015. The effort will be complicated and probably costly but what better way to get customers into your stores more frequently – stores they haven’t had a reason to enter in a very long time.

It’s a lot of fresh thinking. But is it enough to reinvent a 100-year-old has-been into America’s “favorite store,” one of the goals stated in its new brand messaging?

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Johnson’s got the ideas and, for now, seems to have the support of the company behind him. Now it’s time to see if shoppers are ready to take a deep breath in.
 

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