Thoughts for Your Penney

Doug, a Wall Street analyst, and Julie, a homemaker in Dayton, have their sights set on Ron Johnson, the CEO of JC Penney’s, and unless the executive can win them over he’s going to have a really tough few years.

Johnson, the visionary who developed Apple’s wildly popular stores, recently announced a suite of strategies that could help Penney move from its undifferentiated place in the market to something more authentic.

http://www.nytimes.com/2012/01/26/business/jc-penneys-chief-ron-johnson-announces-plans-to-revamp-stores.html?_r=1&scp=2&sq=ron%20johnson&st=Search

The strategies range from the obvious (refreshing the logo) to the revolutionary (moving from 590 yearly promotions to a 3-tiered pricing system). Somewhere in the middle of this strategic continuum are Johnson’s ideas of creating a series of stores-within-stores and of refreshing the often-dated store environments.

Stephanie Clifford, writing in The New York Times, noted however “Mr. Johnson is not creating a retailer from scratch. J. C. Penney has more than 1,100 stores, many in mall locations that have lost other tenants. More than 60 percent of its stores were built in or before the 1980s”. Just step inside any number of the 100 year-old retailer’s stores and you’ll immediately see what Clifford is talking about.

http://www.wheatonmd.org/go/jc-penney

And that’s where Doug and Julie come in. Although they’re fictitious, the ways that these archetypes think will profoundly impact Johnson’s potential for success.

Doug, the analyst, has a fiduciary duty to say what’s what – and in an American economy built on quarterly results, it’s not clear if he would give the thumbs-up to an initiative costing, perhaps, hundreds of millions of dollars and taking years to complete.

http://www.shawlundquist.com/experience/detail/jc_penny_burnsville_store_complete_remodel.php

Assuming that that 60% of the 1,100 stores need to be revamped at an average of $1.5 million per store, that’s just shy of a billion dollars of capital outlays. It’s not for nothing that it’s only retailers with the deepest pockets (e.g. Wal-Mart) that can (a) spend that kind of cash and (b) keep the timeline between when a retail brand revitalization is announced and when the stores are actually refreshed reasonably short.

So if Doug isn’t going to be particularly impressed with Johnson’s refreshment strategy, what about Julie the homemaker’s take on pricing and product? If she’s shopping at Penney’s for clothing, she probably wants middle-of-the road items at a good price – SKUs that are on par with Kohl’s, nicer than Sears, and, perhaps, a little less trendy than Target. And she sure as heck doesn’t want to sort-through almost 600 promotions a year, as evidenced by the fact that the average Penney’s shopper only visits the store on a quarterly basis. Circling back to Johnson, the pricing strategy could probably come on-line sooner than the stores-within-stores idea because it’s a lot easier to adjust Excel sheets than it is to change physical spaces and product assortments.

So if the store revitalizations represent a long-term opportunity – and that’s assuming, of course, that Doug will go along with it – and the stores-within-stores idea represents a mid-term white space – that leaves the venerable retailer with pricing and promotions in the short-term.

But that’s not necessarily a bad thing.

Less opaque pricing could serve two functions: it could create emotional connectivity with Julie by making her life easier; and it could elevate the brand from the price death spiral it created for itself. Moreover, along the way, it might knock-out Sears, an equally storied company that never figured-out how to fully leverage its iconic store brands.

It’s a start. And it would give Doug and Julie something to chew-on while Johnson renovates a couple hundred dated stores.

Line In The Sand (wich) Now Available

My recent post for an innovation consulting company is now available:

http://www.cloverleafinnovation.com/blog/line-sandwhich

A Line In The Sand(wich) | CloverView

Gambling On Arcades

You often don’t think about the differences between things until you see thing “A” which, come to think of it, is actually quite a bit different than thing “B”. Case in point: game rooms are different than arcades. While on vacation in Sheboygan this week I took my two sons to the hotel’s game of chance room (an unwieldy moniker, but I’ll explain in a minute). The boys wanted to go to the “arcade” and, good dad that I try to be, complied. But it wasn’t an “arcade” like the other hotels have: video games lined up next to those glass boxes where you manipulate arms to rescue the trinket from the garbage mound. In the type of room my sons and I thought we were going to there were two sources of excitement: you played games and, if you won along the way, you redeemed the tickets you won for prizes that only an eight or five year old kid could get excited about. In the arcade model, there were more ways to have fun because you had fun during the game and you had fun (maybe for no more than an evening until you lost it) with whatever toy you redeemed your ticket for. But in game model, you won or you lost.

It’s gambling. Vegas, baby.That’s it, kid. And as we walked away from the garishly lit game room I thought that, perhaps, arcades heralded back to an earlier period of America when winning wasn’t everything. Of course, that makes the game room a proxy for where we are now as a nation. Not that winner take all gambling wouldn’t be a bad metaphor for Great Recession America.

Chip Off The Old Block

The Pine Wood Derby is a beautiful anachronism.In case you don’t know the Derby is a storied Boy Scout event by which boys and their dads (Scouting is, from my experience, mostly a dad and son endeavor) take a block of pine and turn it into a fantastic car that he then races against the cars of other boys in his den, pack, or troop. The boys seem to love it and it’s one of the highlights of my son’s scouting year.

But it’s a particularly weird event for two reasons. First, pine is a hard (or hard-ish) wood that requires a fair degree to sculpt into a winning race car. Almost every dad I know goes to the local hardware store to have them cut it. Why? Because in 2010 America most dads don’t have the precision tools needed. I’m not talking about the sort of things that you would find in most tool boxes, screwdrivers and hammers – perhaps a saw here or there. I’m talking dads that have band saws lying around. And while I know a few, it’s just that, a few. It’s not the 1950s and most homes don’t have a wood shop in the garage (if they ever did). So the Derby is odd because it forces boys and dads to outsource, as it were, the crucial first step of cutting the wood to an outsider. The second reason the whole thing is strange is after dad and son have returned home from the hardware store they do one or two things. Dad paints the thing or the kid paints the thing. And judging by how stunning some of the cars were in this year’s Derby, there were more than a few dads who did the painting.

Eight year olds just don’t have that type of fine motor skill. So you’ve got a piece of wood so hard to cut that you have to outsource the labor. And an end product frequently rendered by a middle aged man. It’s fun and all. But the boys don’t always have a lot to do with it. Perhaps the Boy Scouts of America could enter the late 20th century and change it to the Balsa Wood Derby. Then at least dads and sons could butcher the wood in the serenity of their kitchens.

Parting The Waters

I get it. I really do. It would be sacrilegious to print the deity of the Muslim faith. The well-known gods of Hinduism are probably better known in the East than the West. John and Paul, two saints in the Christian tradition, also happen to be half of the first (or, if you believe Abba fans, second) most popular band in history. Jesus, of course, has great name recognition but the name is already taken, at least as a .com (byhttp://www.mccchurch.org/AM/Template.cfm?Section=Home which uses it as a redirect).

That leaves, well, one of the other great religions and a brand name that I stumbled upon today, Mozes. According to their Web site, Mozes helps connect bands and fans. Their model doesn’t really matter because the trend in social media is that a handful of companies achieve critical mass and the rest become also-rans. If Mozes falls into the first category, I’ll revisit this post.

In the meantime, it’s interesting to contemplate the brand’s name. Mozes. As in Moses. Get it. It sounds like that guy that parted the waters but has a clever “z” in the middle. Like what a famous naming firm, Lippincott, did for a car introduction when they dropped the “y” and called the thing an Infiniti. A key objective in naming strategy (and I say this having worked in brand strategy for 15 years) is some connection between your “brand identity”, of which the name is a key part, and what you’re trying to communicate. Between art and commerce, as it were. Personally, I don’t see any connection between technology that links bands and fans and one of the Jewish patriarchs. It struck me as being too off-strategy to be even marginally anti semitic.

I have to admit, however, that I did get a chuckle from the band getting ready to part the waters, a sweaty demi-god lording over the masses yearning to be led. Or maybe I’m just over-thinking the whole thing.

 

It’s Not Kosher

Proving once again the old adage that kids say the darndest things, my middle child blurted out in temple the other Friday night that our family eats shellfish. Shellfish, if you don’t know, is one of  the non-Kosher things that Jews aren’t supposed to eat. And while saying so in the middle of a Shabbat service isn’t exactly sacrilege, it did provoke stern looks from the Rabbi and Cantor and nods from bemused congregants.

But the looks and nods weren’t about what was said. They were about what was left unsaid: according to one reputable survey, 5/6 Jews don’t keep Kosher*. In fact, if the presence of Orthodox Jews, who do keep Kosher, were accounted for the number of non-Orthodox who don’t keep Kosher would arguably grow much higher. Everyone knew that, statistically, the only people keeping Kosher in that room were the clergy.

The shock seems mock, Jewish Kabuki that dictates that we have to comment on non-Kosher habits.But why? What is it about keeping Kosher, or pretending that Jews keep Kosher, that makes people gasp? It feels as though it’s a proxy for talking about something that few people want to talk about: between the Holocaust, inter-marriage, zero to negative population growth, and other factors Judaism isn’t exactly on a growth trajectory. So while calling out a fellow Jew on his or her adherence to the Torah would get you a raised eyebrow (or a clenched fist), lobbing a passive aggressive comment about not keeping Kosher might be a way of expressing our collective anxiety. Or, maybe, people just don’t like shellfish.

* Please see an unrelated article on whether keeping Kosher helps the environment. You can find it at:

http://www.scientificamerican.com/article.cfm?id=kosher-carbon-footprint

 

Dog Gone

The Chicago hot dog is dead. Long live the Chicago hot dog. The Chicago dog, in case you haven’t tried this concoction sent by the culinary gods, is a hot dog (usually from local brand Vienna Beef) topped with celery salt, hot peppers, a pickle or two, tomatoes, hot peppers, sweet relish, and tomatoes. It’s served on a poppy seed bun (POPPIES! POPPIES!) and is frequently a kissing cousin to “cheese” fries. A meal on a plate, it’s also the perfect hangover food for generations of Chicagoans.

By its very nature, the Chicago Hot Dog is codified – omit an ingredient and it’s an idiosyncrasy, leave more out and you have a dog just not a Chicago dog. But what does changing the ingredients do for the equation? What if the meat were nitrate free and the toppings were organic? What if it was the same, just different?

More broadly, of course, is the question of how much do we hold onto what we cherish while allowing for progress. Is a Dodge Charger, for example, still a Dodge Charger if the new design is boxy but it retains its Hemi? Are there elements of brands, of dishes – hell, of people – that are so core that change makes it something completely different. I like twist-off beer bottles, shampoo that smells nice (but in a manly way), booking tickets online, and hybrid cars. But if you’re going to change a Chicago Dog at least let me order some cheese fries on the side.