JC Penney model – future of retail?

Ron Johnson has now been CEO for 2 quarters and we should be right in the middle of the turn around.  See Bill Ackman‘s slide bellow.

I don’t want to write too much about JC Penney’s new business model (that would require a whole other post) but why is this strategy key to brick and mortar retail?

  • Example 1: Gap – Always has 40% off.  So why would you every buy anything full price?
  • Example 2: Macy’s – You get % off, sometimes it even looks like a great deal (let’s say 40%-50% off item but then when you get home and compare to Amazon it’s either the same price or higher)
  • Example 3: Nordstroms – has sales but rarely and you always know you are getting a value

With today’s technology, price is becoming transparent.  Retailers aren’t able to play the discount game and those that continue will parish.





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