An Introduction to Spinney In today's dynamic world, it becomes a struggle to persevere against the rampant competition and adapt to the continuously changing structure of the retail industry.
J Spinney, formally known as Penny's, was founded in 1902 by James Cash Penny (Hannah). Cue reentry, Spinney is known as a moderately priced chain of department stores with headquarter terse stationed in Plano, Texas. Aside from their general merchandise departments, Expend eye also offers Seaport, optical centers, portrait studios, and Jewelry repair.Since its inception in 1902, Spinney has undergone its own shares of ups and downs; however, it has proved its elf as a true ricketier amongst the retail industry. In recent years, any and every institution has narrowed in on the aftermath of Expend eves rebinding catastrophe.
Spinney, the century old department store behemoth spanning 1,100 locations throughout America, underwent critical rebinding changes to rejuvenate it s stores. These changes began in June of 2011 when the company announced its new CEO, Or n Johnson.Johnson, a corporate veteran with executive experience at Target and Apple Inc, was c ladled upon to revolutionize the Spinney shopping experience. As the Senior Vice President of Re tail Operations of Apple, Johnson revamped the Apple store, and made them into the "sale eek playrooms filled with gadgets" that we know of today. Unfortunately, Johnson was UN able to bring the success from Apple Inc, and the company deteriorated under Johnny's ma management.
Ron Johnny's Rebinding of ICP In today's retail industry, overall prices are rising while consumer values are remaining stagnant," forcing Spinney and other retailers to discount their clothes from an mar get average of 38% in 2002, even further to 60% in 2011 (Growth). Over the last 20 years, the stagnant once in consumer value has led department stores to lose nearly 25% of market share, while mass discount and specialty stores now make up 70% of all American retail stores.In Johns one's opinion, these statistics revealed a huge growth opportunity within the department SST ore sector (Growth). In January 2012, Ron Johnson launched Expenses rebinding strategy with the intent f restoring the integrity of the company's brand. The goal was to create an atmosphere re of openness, accessibility, and pride through the six p;s: Personality, Product, Presentation on, Place, Promotion, and Price.
Although his plan seemed comprehensive and logical, Johnson failed to test the mark et and understand his consumers.Thereby one of the main flaws in this rebinding star taste was that Johnson and his team were overlooking a major aspect of consumer behavior: co ensures, especially women, like sales and promotions. In fact, according to our recent survey a out Spinney perceptions, 62. 5% of customers would rather buy a shirt that was original y $60. 00 and now 50% off compared to 2. 5% of customers that would rather buy a shirt original Ill costing $30.
00 (See Appendix II). Evidently, "most shoppers, coupon collectors or not, want the thrill of getting a great deal, even if it's an illusion," (Clifford and Rampage).According to economy mists and marketing experts, this "thrill" consumers get out of deals is, "partly because they do not have a good sense of how much an item should be worth to them and need cues to FL ere that out" (Clifford and Rampage). In other words, customers have no real way of assessing t he value and thus price of clothing. They can only assume value based on signals such a quail TTY, brand, 2 price, etc.
Thereby when Johnson decided to change to everyday low prices, he was in correctly assuming that customers could sense how much things should cost and recognize a good deal.However, since this is not the case and customers did not recognize the deals, they SST popped shopping at Spinney. The other main flaw is that by removing house brands and rep acing them with younger and trendier brands with smaller sizes, Spinney was now alienating its older, loyal customers. This misunderstanding of their consumers' behavior coupled with the is alienation of their loyal customers led to a 20% drop in sales and a $163 million loss J just within the first quarter of implementing this new strategy.
In addition to suffering pecuniary losses, Spinney failed to bring customers into their stores as foot traffic declined by 10% (B arrows). Despite the implementation of new prices, signage, store layout, brands, slogans, logo ND flood of commercials, Expenses goals and intentions failed to appreciate its con summer' behavior. In the end, Johnny's plan alienated core customers, failed to acquire a you anger demographic, and further confused the entire consumer retail market.J Penny's Turnaround Strategies Due to the major issues with the repositioning strategy and the subsequent detriment tall losses that Spinney incurred, Ron Johnson was fired and replaced by former CEO My Ron Oilman. Llama's plan for recovery is to bring Spinney back to the basics, and focus on winning back their loyal, older customers. Spinney is optimistic that reverting back to their roots will successfully bring custom back, restore the brand's integrity, and further ameliorate the damage caused by Josh noon's plan.
Even with these efforts, there are still numerous core problems Spinney must adder as in order to survive in a tumultuous industry decline. Although Spinney has made efforts to a apologize 3 and connect with their lost customers, there is still a large portion of the population d satisfied with Expenses changes. Secondly, Johnny's plan was unsuccessful in attracting you anger hoppers because Spinney failed to make a connection with their target demographer ICC.
