JCPenney
American department store chain that serves as a cautionary tale about phototropism failure.
American department store chain that serves as a cautionary tale about phototropism failure. In November 2011, JCPenney hired Ron Johnson, the retail executive who designed Apple's store experience, as CEO. Johnson detected a real resource gradient - experiential retail - and reallocated aggressively to transform JCPenney into an Apple Store-like destination.
The failure wasn't in gradient detection but in customer mismatch. Apple Store customers bought $1,200 iPhones; JCPenney customers bought $30 jeans. Johnson eliminated 590 annual sales events, stripped sale signs, and redesigned stores. Same-store sales dropped 32% in Q4 2012 - 'the worst quarter in retail history.' Johnson was fired after 17 months, having destroyed $6 billion in market value.
Cautionary Notes on JCPenney
- Detected real gradient but wrong for their customer base
- Apple Store customers valued experience; JCPenney customers valued discounts
- Failed to test assumptions before full reallocation
- Doubled down despite early warning signals in Q1 2012