Brick and mortar stores have been enveloped in a period of transformation over the past few years. As the e-commerce arena continues to grow, some retailers have integrated tablets, introduced contactless point-of-sale payments, and developed brand-specific mobile apps – all in an effort to streamline and improve customer service. consumer shopping experience.
As these retailers continue to look for new ways to reinvent their physical stores, one company is bringing a different approach to the table.
JC Penney is set to roll out its new in-store toy shops to 1,000 of its physical locations.
Tucked away inside the kids department and right next to the Disney Collection displays, the retailer will offer a variety of toys including dolls, action figures, board games and more. There will also be a play area where children can try their hand at games.
JC Penney Executive Vice President and Chief Merchandiser John Tighe commented on this new toy store offering and what it means for the retailer.
“We know shoppers shop for toys all year round and by creating a fun and inviting toy store featuring some of the biggest brands and hottest products, we’ll inspire families to shop and spend more at JC Penney. Toys are an exciting product category for JC Penney and an in-store attraction that will drive traffic and sales as we continue to focus on increasing revenue per customer,” said Tighe.
This all might sound a little familiar, perhaps bordering on deja vu, as this idea has already been circulating within the head office of the big-box retail store.
Six years ago, when Ron Johnson took over as the new CEO of JC Penney, he had big changes in store for the retailer. Along with a flashy new logo and advertising strategy, Johnson also sought to update the somewhat heavy-handed retail store with a redesign.
According The New York Timesthe redesign element Johnson had in mind was to turn the store into 100 different small shops for his departments, with the center known as “town square”.
While it might sound like a great and novel idea, retail pundits pushed back at the time, saying it clashed at the heart of the very well-established, 100-plus-year-old JC Penney brand. .
After Johnson took the reins and began to implement his new plans for the retailer, it didn’t take long for things to go downhill.
During the fourth quarter of 2012, one of the busiest times of the year due to the holidays, sales fell 28.4% resulting in a net loss of $552 million. JC Penney’s sales were already in decline from the previous three years when Johnson arrived, and under his leadership suffered a further 25% overall decline in sales for the year, a 4 year loss in revenue, $3 billion.
Many retail players have speculated as to why Johnson’s idea of creating stores for each department was a failure. Some believe the radical idea of turning a company with a long history into a new age store is where Johnson got it wrong.
Columbia professor and former Sears Canada CEO Mark Cohen commented on Johnson’s activities as CEO of JC Penney.
“There’s nothing good to say about what he did,” Cohen said. “Penney had been knocked into a ditch when he picked it up. But, rather than putting it back on the road, he basically set it on fire.
Johnson at the time admitted to underestimating the coupon’s appeal to Penney loyalists.
“I thought people were just sick of coupons and stuff. The reality is that all the coupons that we made, there [was] a certain portion of customers who loved it,” Johnson said. “They looked to stores that were competing that way. So our primary customer, I think he’s much more addicted and appreciated the coupons more than I thought he would.
In other words, Ron Johnson was designing for the customers JC Penney wanted to attract – not the ones they had always had – and would not drive the retailer forward.
Fast forward six years, and whether these new toy shops will be a hit is still a matter of debate.
Just a year ago, Johnson reflected on the plans he had made as CEO and where he thought the company would be today. “I still think that if we had continued, the company would have been much better than this painful U-turn where it is trying to find growth from a new base.”
Now that JC Penney is effectively dusting off Johnson’s initial idea, we wonder what he would say.
Maybe that timing is everything.
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