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I’ve often written that the world doesn’t need another computer OS or power chord teen anthem band. It also doesn’t need another department store. This isn’t good news for JCPenney, which comes about as close as any to getting slotted into the player-to-be-named-later category.

Business hasn’t been good, and it doesn’t look like it’s going to improve anytime soon. The company’s 2Q11 sales and earnings were flat with last year, with a meager 2% comp store sales blip offset by losses from closing its catalog business (which was part of a bigger strategy announced early this year to “spur long-term growth” also by closing stores and customer call centers). In the same January announcement JCPenney put two new directors on its board, both of them financier-types, which makes about as much sense as putting two professional golfers on it.

On the marketing front, the company’s CMO did everything he’s supposed to do -- invested in social media campaigns, bought advertising on the Academy Awards show, and pursued the inane fantasy of Lovemarks (the future beyond brands, don’t you know?) through buzzworthy branded clothing lines Liz Claiborne and Mango -- and then retired last month. It turns out that none of these activities made any difference whatsoever, and JCPenney has consistently lost ground to competitors like Macy’s and Kohl’s...which produce pretty much the same generic clothing and marketing, only do so for sale at lower prices.

So it should be clear that doing more of the same is not a viable strategy. What is? Here are three thought-starter ideas:

  • Promote fashion to the fringe, while still selling to the mainstream middle. No celebrity brand name can differentiate mass merchandise apparel manufactured in the same factories as the competition. Why not float wild, radical ideas -- sort of concept cars for teen wear -- and use it to generate awareness (maybe use social tools to involve designers both proven and unknown to contribute instead of wasting peoples' time with marketing promotions)? You can't own bland but unique is proprietary" by definition. It might even prompt a trend.
  • Rethink loyalty, since there really isn't any anymore, at least in the categories in which JCPenney competes. Kick the expert consultants and marketers out of the room and get real people to interact with operations types to define the substance of real customer relationships, and then orient the business (not a throwaway marketing spend) behind it. Again, its competitors haven't cracked the code on this, and a unique solution could be owned and promoted (hint: it won't involve YouTube).
  • Connect the dots between geophysical and virtual, like the way Victoria's Secret has done for years; its stores are places to see, touch, and try on things that can subsequently be bought via catalog or online. Could there be specific and unique reasons why customers should visit a JCPenney (debuts of new lines, checking out new versions of previously-owned items, or great trade-in/buy-back programs...see first two points). Right now there's no obvious or compelling connection whatsoever, which means there are no reasons to visit the stores.

I must admit that I'm not terribly hopeful that JCPenney will do anything particularly bold. The cushy marketing establishment is too ready to spend the company’s dollars on whatever is topically sexy, and its board if directors couldn't tell the difference between a good retail strategy and a corned beef sandwich. Instead, they'll just see the numbers continue to fall, and try to manipulate them and the people involved. So look for budget slashing and firings, and then a sale to another retailer.

What do you think?

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