Lessons from Other Industries: Learning from JCPenney’s many mistakes
For this month’s “Lessons from Other Industries” series, we take a look at the rise of one of America’s most famous department stores — a business far removed from the marine industry, yet one that offers many lessons worth receiving.
If you’ve been watching the evening news this year, you caught at least one episode of the soap opera surrounding JCPenney and its struggles to maintain relevance in a changing retail landscape. Our market understands the difficulty in adapting to changing demographics, web-based consumer habits and the oft-predicted long-term decline of an industry.
With JCPenney, however, a big lesson can be boiled down to three key points: don’t act desperate, definitely don’t look desperate and follow long-term plans rather than making reactionary business decisions — especially when you’re in the spotlight.
No brick and mortar stores have been able to escape the so-called “Best Buy effect” where consumers shop the store in person and then seek out the lowest price online. While that’s one of many structural problems facing JCPenney, which partially lead the store to exit the catalog business two years ago, the 111-year-old retailer has handled its situation with stunning clumsiness.
Trying to game Google’s coveted algorithms for improved search visibility during the holiday season, purchasing an interest in the consistently declining Martha Stewart Omnimedia, radically altering its time-tested pricing strategy (moms love big sales) and then reversing course, frequent leadership changes — especially at the top — and a succession of high-profile layoffs, these are just a handful of the questionable-to-bad decisions the company’s board has made. The resulting PR and news clips have been brutal.
So what’s the lesson? It goes directly back to the best marine dealerships in the country. As part of the Boating Industry Top 100 program, our editorial staff dives into the financials, business plans, sales and marketing strategies and long-term planning that distinguish the marine industry’s best-run businesses. Consistent themes emerge along the way.
In none of the top-tier applications do you see drastic changes followed by total reversals of course. Skirting the rules (think the Google fiasco) never works. And, especially relevant for businesses that are in expansion mode, adding to facilities and staff is a decision that needs to be made with as much research, figures and unbiased opinions as possible. Growing too quickly is one of the most common ways to sink a previously healthy business.
Marine dealerships that have successfully grown their empires will pour over data, seek the input of outside firms and demonstrate extreme caution before making a purchase that could potentially sink the ship if the economy takes a dip or any other outside factors come into play. Taking over an existing dealer or building new should be the most carefully considered decision in your company’s history.
The final lesson gleaned from JCPenney’s recent floundering is a matter of style. As CEOs, sales schemes and long-term strategies change as often as your pleated slacks, it’s important to the public, business associates and staff that a long-term plan is being followed. Businesses that have been around the longest have a simple mantra that fit could fit on a notecard, rather than within a three-ring binder.
Take time for due diligence, consult unbiased experts, check and double check potentially shaky financials and, if nothing else, take great pains to cultivate the impact your business planning, your staff and marketing on your corporate image. In today’s hyperactive, hypersensitive world, image is everything — maybe that’s sad but it’s indisputably true.