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JCPenney--predicted to be one of the most interesting retailers in 2012

February 13, 2012

J.C. Penney just blew up its brand — in a good way — thanks to a new management team with some radical new ideas. J.C. Penney is about to be the most interesting retail story of the year.

Late last year, J.C. Penney began building a dream team with Ron Johnson — the man who launched Apple‘s retail stores — as its new CEO. Johnson cut his retail teeth at Target and from there he poached Michael Francis to serve as J.C. Penney’s new president. Francis is largely responsible for Target’s branding and marketing efforts.

And this week, Johnson took a sledgehammer to the J.C. Penney way of doing business. It’s the most exciting thing I’ve seen in retail since Apple opened stores, again with Johson at the the helm.

 There’s a new logo, new spokesperson, new pricing stategy, an investment in Martha Stewart Omnimedia and another designer partnership with Nanette Lepore. All in two short months.

 

J.C. Penney — now being referred to as jcpenney — is implementing a new pricing strategy, slashing prices up to 40% with to keep them that way year round. Not EDLP, this fair pricing strategy is designed to keep prices low on the basics shoppers look for frequently and introduce new merchandise on a routine schedule.

“We want customers to shop on their terms, not ours,” said Johnson. “By setting our store monthly and maintaining our best prices for an entire month, we feel confident that customers will love shopping when it is convenient for them, rather than when it is expedient for us.”

It’s a shocking move for any retailer, let alone a department store where hi-low pricing and promotions have long been the norm.

There will also be an entirely new layout, with brands merchandised in shops within the store rather than endless racks and runs of shelves. There aren’t many new ways to display merchandise and any effort to re-invent the in-store experience will be welcome with shoppers and provide a reason to buy in stores, rather than looking for bargains online.

“The department store is the number one opportunity in retail today. We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America’s favorite store,” Johnson said. “Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated – fair and square.”

The new logo is meant to evoke the American Flag, a move likely to resonate with today’s shoppers and set it apart from the rest of the retail pack.

Most retailers make tentative steps toward change. They take a year to develop a new store format, reconfigure a layout or commission a logo. Then they test it, refine it and test it again. It can take years to roll out changes to a large store base and often before that happens, the plan changes again.

But Johnson is anything but typical. Changes begin on Feb. 1 and  in August jcpenney will begin updating all stores with new merchandise and presentations, adding two to three shops each month through 2015 in what management is calling a complete transformation.

It’s refreshing, daring and probably exactly what the retailer needs. It’s probably what a lot of retailers need but few have the leadership and support to do it.

 

For more information, visit: http://www.forbes.com/sites/lauraheller/2012/01/26/why-jcpenney-will-be-the-most-interesting-retailer-of-2012/


JCPenney--predicted to be one of the most interesting retailers in 2012

February 13, 2012

J.C. Penney just blew up its brand — in a good way — thanks to a new management team with some radical new ideas. J.C. Penney is about to be the most interesting retail story of the year.

 

Late last year, J.C. Penney began building a dream team with Ron Johnson — the man who launched Apple‘s retail stores — as its new CEO. Johnson cut his retail teeth at Target and from there he poached Michael Francis to serve as J.C. Penney’s new president. Francis is largely responsible for Target’s branding and marketing efforts.

 

And this week, Johnson took a sledgehammer to the J.C. Penney way of doing business. It’s the most exciting thing I’ve seen in retail since Apple opened stores, again with Johson at the the helm.

 

There’s a new logo, new spokesperson, new pricing stategy, an investment in Martha Stewart Omnimedia and another designer partnership with Nanette Lepore. All in two short months.

 

 

J.C. Penney — now being referred to as jcpenney — is implementing a new pricing strategy, slashing prices up to 40% with to keep them that way year round. Not EDLP, this fair pricing strategy is designed to keep prices low on the basics shoppers look for frequently and introduce new merchandise on a routine schedule.

 

“We want customers to shop on their terms, not ours,” said Johnson. “By setting our store monthly and maintaining our best prices for an entire month, we feel confident that customers will love shopping when it is convenient for them, rather than when it is expedient for us.”

 

It’s a shocking move for any retailer, let alone a department store where hi-low pricing and promotions have long been the norm.

 

There will also be an entirely new layout, with brands merchandised in shops within the store rather than endless racks and runs of shelves. There aren’t many new ways to display merchandise and any effort to re-invent the in-store experience will be welcome with shoppers and provide a reason to buy in stores, rather than looking for bargains online.

 

“The department store is the number one opportunity in retail today. We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America’s favorite store,” Johnson said. “Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated – fair and square.”

 

The new logo is meant to evoke the American Flag, a move likely to resonate with today’s shoppers and set it apart from the rest of the retail pack.

 

Most retailers make tentative steps toward change. They take a year to develop a new store format, reconfigure a layout or commission a logo. Then they test it, refine it and test it again. It can take years to roll out changes to a large store base and often before that happens, the plan changes again.

But Johnson is anything but typical. Changes begin on Feb. 1 and  in August jcpenney will begin updating all stores with new merchandise and presentations, adding two to three shops each month through 2015 in what management is calling a complete transformation.

 

It’s refreshing, daring and probably exactly what the retailer needs. It’s probably what a lot of retailers need but few have the leadership and support to do it.

 

For more information, visit: http://www.forbes.com/sites/lauraheller/2012/01/26/why-jcpenney-will-be-the-most-interesting-retailer-of-2012/

 


Will you be able to get a piece of Facebook?

February 13, 2012

Front-and-center on Facebook's IPO prospectus is its mission "to make the world more open and connected." Yet the IPO process itself is notoriously closed and opaque, with financial institutions parsing out shares at the offering price to their best clients to give them the benefit of the initial run-up in value.


Since Facebook derives 100% of its value from the willingness of its 845 million users to share their activities, will Facebook share the bounty with its users? And if so, how?


It so happens that Chris Kelly, Facebook's former chief privacy officer (and onetime candidate for California attorney general), is a director and biggest outside shareholder in Loyal3, a startup that could help Facebook do that.


Loyal3 has developed a platform that would allow a stock issuer, such as Facebook, to offer shares to millions of people at the same price as the huge financial institutions underwriting the deal.


Here's how it works: Buyers set up an account and then commit to a maximum bid of $200, $300 or $400, increments geared for small, individual investors. The bidder is awarded a number of shares depending on the offering price. And that transaction is shared on Facebook.


"Facebook has taken a central role in the online identity broker in everyday life. Why shouldn't it extend to financial services as well?" Mr. Kelly said. "This is the next evolution of the 'like' button in a lot of ways."


Loyal3 CEO Barry Scheider said his company will power an IPO in the coming months. One question: Will it be Facebook's IPO?


Messrs. Kelly and CEO Barry Schneider won't say, but they also won't rule it out.


"Imagine a day when 500,000 or 10 million people get access to an IPO at the same price as institutions," Mr. Schneider said. "We are ready to do a 'social IPO' and we're going to do just that."


There's some precedent here. In an attempt to live up to its "Don't Be Evil" mantra, Google used a "Dutch Auction" to let individuals buy shares at the IPO price in 2004. You'd think Facebook would want to take the concept further.


But Facebook has another good reason to let its uses in on the action. As anyone with a dim memory of Friendster or MySpace can attest, the network effects that create social phenoms can also accelerate their downfall. But if Facebook offered shares to its users, they'd have an incentive to keep sharing their lives on Facebook, and thus helping create value for a company they own.


That's also the bigger idea behind Loyal3: create a class of fans-owners by allowing brands to cost-effectively sell small amounts of shares to consumers -- in as little as $10 increments -- via Facebook. (See separate Ad Age story.) The mechanism is a direct stock-purchase plan that has been around since the 1970s but not widely used because of the expense of servicing many small shareholders.


Loyal 3 built a digital platform to take the costs out and make it as easy to buy a company share as a book on Amazon. Brands could do more than sell stock directly; they could give it away in lieu of miles, points or other incentives to their best customers. "The truth is people care way more about things that they own than things that they don't," Mr. Schneider said.

 

For more information: http://adage.com/article/digital/facebook-users-buy-ipo-shares/232689/


How Are You Retaining Customers?

February 13, 2012

Love just isn't enough anymore. In brand relationships, good customer service, high customer satisfaction and even professed brand loyalty won't keep consumers from ditching a product for the competition. In fact, more than half of U.S. consumers did so last year.

A global study by Accenture found that even though consumers are more satisfied with customer service than ever before, they are switching brands at a high rate.

The survey, conducted over the web in September and October 2011, queried more than 10,000 consumers to measure customer satisfaction across key attributes in 10 different industries. It found that while satisfaction increased for all those service attributes, an astounding two-thirds of respondents -- 66% -- reported they switched brands in the past year because of a bad customer experience. While the U.S.-only percentage of switchers was lower in 2011, at 51%, it is still significant and an increase over the previous year.

"Switching is something that's here to stay, said Robert Wollan, global managing director, Accenture customer relationship management. "Consumers have become accustomed to switching when the service or product isn't meeting their needs."

What is new is the big uptick in satisfaction, with increases ranging from 5% to 7% in one year, depending on the category. Consumers are happier, for instance, with shorter wait times (33% are satisfied compared to 27% last year); the ability to solve issues without having to speak to someone (38% satisfied, up from 33%); and the ability to resolve an issue by speaking to just one person (39% compared to 32%).

So what's going on -- shouldn't happier customers mean more loyal customers? Not necessarily. About one-fourth (24%) of consumers characterize themselves as brand loyal, while an almost equal number (23%) describe themselves as having no loyalty at all. As Mr. Wollan pointed out, not only are consumers now used to switching brands, there is a third factor on the increase that may also help explain the trend: the rise in customer expectation.

About 44% said they expect more, or much more, than they did last year from the brands with which they do business. In 2008, 31% said they expected more than the year before.

"We think the attributes we ask about -- wait times and talking to just one person to resolve issues -- have become table stakes," Mr. Wollan said.

Today's savvy digital customers expect polite and knowledgeable employees or convenient customer-service hours. And while they appreciate and are satisfied with those things, it's not going to stop them from taking their business elsewhere.

Also on the rise is partial switching, defined as when a consumer keeps a brand, but also adds another in the same category, such as buying a second mobile phone from a different provider. Partial switching in 2011 increased in all 10 industries Accenture tracks, from retail and consumer electronics to travel and tourism and banking. That's not only lost business, but more importantly, a loyalty lapse that opens a door to a new brand.

 

For more information, visit: http://adage.com/article/news/brand-love-satisfaction-shoppers-faithful/232680/


How Are You Retaining Customers?

February 13, 2012

Love just isn't enough anymore. In brand relationships, good customer service, high customer satisfaction and even professed brand loyalty won't keep consumers from ditching a product for the competition. In fact, more than half of U.S. consumers did so last year.

 

A global study by Accenture found that even though consumers are more satisfied with customer service than ever before, they are switching brands at a high rate.

 

The survey, conducted over the web in September and October 2011, queried more than 10,000 consumers to measure customer satisfaction across key attributes in 10 different industries. It found that while satisfaction increased for all those service attributes, an astounding two-thirds of respondents -- 66% -- reported they switched brands in the past year because of a bad customer experience. While the U.S.-only percentage of switchers was lower in 2011, at 51%, it is still significant and an increase over the previous year.

 

"Switching is something that's here to stay, said Robert Wollan, global managing director, Accenture customer relationship management. "Consumers have become accustomed to switching when the service or product isn't meeting their needs."

 

What is new is the big uptick in satisfaction, with increases ranging from 5% to 7% in one year, depending on the category. Consumers are happier, for instance, with shorter wait times (33% are satisfied compared to 27% last year); the ability to solve issues without having to speak to someone (38% satisfied, up from 33%); and the ability to resolve an issue by speaking to just one person (39% compared to 32%).

 

So what's going on -- shouldn't happier customers mean more loyal customers? Not necessarily. About one-fourth (24%) of consumers characterize themselves as brand loyal, while an almost equal number (23%) describe themselves as having no loyalty at all. As Mr. Wollan pointed out, not only are consumers now used to switching brands, there is a third factor on the increase that may also help explain the trend: the rise in customer expectation.

 

About 44% said they expect more, or much more, than they did last year from the brands with which they do business. In 2008, 31% said they expected more than the year before.

 

"We think the attributes we ask about -- wait times and talking to just one person to resolve issues -- have become table stakes," Mr. Wollan said.

 

Today's savvy digital customers expect polite and knowledgeable employees or convenient customer-service hours. And while they appreciate and are satisfied with those things, it's not going to stop them from taking their business elsewhere.

 

Also on the rise is partial switching, defined as when a consumer keeps a brand, but also adds another in the same category, such as buying a second mobile phone from a different provider. Partial switching in 2011 increased in all 10 industries Accenture tracks, from retail and consumer electronics to travel and tourism and banking. That's not only lost business, but more importantly, a loyalty lapse that opens a door to a new brand.

 

For more information, visit: http://adage.com/article/news/brand-love-satisfaction-shoppers-faithful/232680/


E-Commerce on the Rise

February 13, 2012

E-commerce spending rose 14 percent in the fourth quarter over last year, according to Reston, Va.–based research firm ComScore Inc., which said spending reached $49.7 billion.


The increase represents the ninth consecutive quarter of growth and the fifth of double-digit growth in online spending, ComScore said.


Overall, U.S. online spending reached $161.5 billion, marking a 13 percent increase over 2010. Among the top five performing categories were jewelry and watches. (The other four were digital content and subscriptions, consumer electronics, toys and hobbies, and computer software.)


“The fourth quarter of 2011 capped off what was yet another strong year for online retail, one in which every quarter achieved double-digit increases versus the prior year,” said ComScore Chairman Gian Fulgoni. “In the face of continuing uncertainty regarding the U.S. economy, consumers increasingly went online for their shopping needs. Price and convenience continue to be the critical value drivers for e-commerce, and unless those conditions change, we can expect to see more channel shifting to online in 2012 and, perhaps, even an acceleration in the current growth trend.”


According to ComScore, 52 percent of online transactions included free shipping. (In 2010, 49 percent of all transaction included free shipping.)

 

For more information: http://www.apparelnews.net/news/retailing/020912-E-Commerce-Spending-Hits-161-5-Billion-According-to-ComScore 


E-Commerce on the Rise

February 13, 2012

E-commerce spending rose 14 percent in the fourth quarter over last year, according to Reston, Va.–based research firm ComScore Inc., which said spending reached $49.7 billion.


The increase represents the ninth consecutive quarter of growth and the fifth of double-digit growth in online spending, ComScore said.



Overall, U.S. online spending reached $161.5 billion, marking a 13 percent increase over 2010. Among the top five performing categories were jewelry and watches. (The other four were digital content and subscriptions, consumer electronics, toys and hobbies, and computer software.)

 


“The fourth quarter of 2011 capped off what was yet another strong year for online retail, one in which every quarter achieved double-digit increases versus the prior year,” said ComScore Chairman Gian Fulgoni. “In the face of continuing uncertainty regarding the U.S. economy, consumers increasingly went online for their shopping needs. Price and convenience continue to be the critical value drivers for e-commerce, and unless those conditions change, we can expect to see more channel shifting to online in 2012 and, perhaps, even an acceleration in the current growth trend.”


According to ComScore, 52 percent of online transactions included free shipping. (In 2010, 49 percent of all transaction included free shipping.)

 

For more information: http://www.apparelnews.net/news/retailing/020912-E-Commerce-Spending-Hits-161-5-Billion-According-to-ComScore 


E-Commerce on the Rise

February 13, 2012

E-commerce spending rose 14 percent in the fourth quarter over last year, according to Reston, Va.–based research firm ComScore Inc., which said spending reached $49.7 billion.

The increase represents the ninth consecutive quarter of growth and the fifth of double-digit growth in online spending, ComScore said.

Overall, U.S. online spending reached $161.5 billion, marking a 13 percent increase over 2010. Among the top five performing categories were jewelry and watches. (The other four were digital content and subscriptions, consumer electronics, toys and hobbies, and computer software.)
“The fourth quarter of 2011 capped off what was yet another strong year for online retail, one in which every quarter achieved double-digit increases versus the prior year,” said ComScore Chairman Gian Fulgoni. “In the face of continuing uncertainty regarding the U.S. economy, consumers increasingly went online for their shopping needs. Price and convenience continue to be the critical value drivers for e-commerce, and unless those conditions change, we can expect to see more channel shifting to online in 2012 and, perhaps, even an acceleration in the current growth trend.”

According to ComScore, 52 percent of online transactions included free shipping. (In 2010, 49 percent of all transaction included free shipping.)

For more information: http://www.apparelnews.net/news/retailing/020912-E-Commerce-Spending-Hits-161-5-Billion-According-to-ComScore