By Ellis Verdi, president of the NYC advertising agency DeVito/Verdi
Here are the five lessons I learned from the J.C. Penney debacle — unfortunately we knew all of this before Ron took his ideas to market.
1. Advertising doesn't work quickly to change behavior. Even if educating consumers on fair pricing made sense, having people understand "fair pricing" could take many years, and I'm not sure consumers even care. Aside from the pure challenge of getting the word out through advertising and in-store, because of its inherent complexity, it still requires enormous levels of advertising and time.
2. Consumers need to remain in control of value. After all, we are asking them to part with their money. "Trust me this is a low price" doesn't work well unless they have years of successful experience with that store's pricing format. In fact this was a wholesale change and those consumers seeking a deal, did not know they were or were not getting one.
3. The money guys have a hard time with a strategy dependent on communications. Ron's idea requires a belief that consumers will see the wisdom of the change if they learn about it through advertising. Too many times the financial types don't have the tools to evaluate that and actually tend to believe it more than they should – witness the boom/bust of the .com era, when financial organizations put tons of money in advertising, often with little to no success. Inventory management, finance, sourcing, staffing etc are all more tangible, more-easily quantifiable.
4. Ron actually didn't have the right experience for Penney's. Not that a direct knowledge of this type of retailing is critical, but the vision he created can't be justified in any way based on his past experience. Neither Apple nor Target fits the bill. Most understand why Apple is less than relevant (high priced product that has a strong following, with good built in margins because it is manufactured by Apple versus buying from others etc…) but Target is also a different breed. Target's cool com