Make note of August 2015: That’s when Marvin Ellison officially steps into the top spot at J.C. Penney, and the most closely watched CEO stewardship of the retail industry begins.
J.C. Penney is banking on Ellison, now executive vice president of U.S. stores for
While the chain has reversed the massive sales declines incurred during the tenure of ousted CEO Ron Johnson, it's still in the red and reeling from a shopper exodus that will go down in the retail record books.
With Ellison's appointment, the 1,100-store chain is betting on a merchant who’s masterful at operations — the unsexy-but-critical nuts-and-bolts of retailing that ranges from inventory control to supply chain management — as well as “service innovation,” which these days often means creating a seamless experience for consumers shopping in physical stores, online and from mobile devices, industry analysts told Forbes.
But while Ellison has spent his 30-year retail career at national chains like Home Depot and
Analysts weighed in on what Ellison’s appointment could mean for J.C. Penney:
Craig Johnson, president of Customer Growth Partners: 'Uncoventional, Inspired Choice,' But Soft On Softlines
“Marvin is an inspired, if unconventional, choice for J.C. Penney. He has outstanding skills in operations, running a fleet twice the size of J.C. Penney and with over twice the productivity —and far more profitability — than J.C. Penney, and with deep skills in customer service and customer relationship management.
"The missing skill set is in softlines merchandising. Marvin has deep current knowledge in hardlines, of course, but he has little experience as an apparel merchant — and J.C. Penney is primarily an apparel and accessories retailer. So, he will need to either depend heavily on Penney’s current merchant team, or build onto that team with outsiders from a candidate pool he is not that familiar with.”
Ty McMahan, senior director of marketing and content, StellaService: 'Bullish On Service Innovation'
"You're seeing a lot of competition among department stores around service innovation. Sears allows customers to buy online and offers guaranteed curbside pick-up within five minutes at the store.
"We've been close watchers of Ellison's work at Home Depot, particularly efforts to connect the ecommerce operations with physical stores. He introduced buy online, pick-up in-store, which shows he's bullish on service innovation. He's also known for having ushered in a commitment to customer care, seeing that nearly two-thirds of the retailer's labor hours were spent helping customers. We expect there will be a big emphasis on fast, friendly, helpful service at J.C. Penney. He's on a mission to repair the relationship with customers that has eroded in recent years. There's little doubt that service will be a top priority.”
Wendy Liebmann, CEO of WSL Strategic Retail: Can He Forge An 'Emotional Connection'?
"In this post-Johnson, soon-to-be post-Ullman era, one of the key objectives for the new CEO must be to help J.C. Penney to find its voice again with its shoppers.
“J.C. Penney shoppers were – and still are -- highly promotional, focused on getting the best value for money every day. They have traditionally shopped more, different retail channels than just about any other shoppers we track in our How America Shops study because they are always looking for the best deal.
"Ellison needs to re-engage with those shoppers again – around price certainly, but also around trust. Shoppers trusted J.C. Penney to deliver on quality product, brands, and experiences that were relevant to the whole family. That trust was drastically eroded in the Johnson era, and not yet regained in the Ullman era.”
In all, Ellison must build an emotional connection and relationship for JCP with shoppers. And that may be a challenge for someone whose key role and expertise has been as an operator. But it's critical and essential."
Russ Meyer, global director of strategy and insights, Siegel+Gale: Operational Expertise 'Critical To Success'
“With stints at two retailers with strong and loyal customer bases, Target and Home Depot, Ellison is credited with being part of the team that turned Home Depot around in the last five years. One of the key things he helped institute was a return to customer service at Home Depot that had declined during the last 10 years. He also is known as someone with operational expertise. All of this is critical for J.C. Penney to get right: a return to being a brand with a strong and loyal customer base, better customer service and operational excellence to ensure that the transformation J.C. Penney must make can be supported through the running of the business.
"Having been in need of transformation for several years now, J.C. Penney has been drifting both as a brand and a business. To have any chance of surviving and thriving, J.C. Penney needs to do three things correctly. It needs to run the operation as efficiently as possible to ensure the working capital necessary to attract and retain customers and transform the business. Mr. Ellison's success at operations will probably be extremely valuable in making sure the current business runs as effectively as possible, making possible any longer term transformation.
"It needs to retain the customers J.C. Penney currently has and work to bring back customers who may have defected to other retail brands — either physical or virtual — in the last few years. Mr. Ellison's experience in [offering an] enhanced customer experience at Home Depot, a retailer with undoubtedly slim margins, is another skill that the organization will find valuable.
“Finally, J.C. Penney needs to undergo the transformation it has long needed, changing from a catalog retailer of the past to something new and different. It is unclear from Ellison’s previous experiences whether he is capable of that sort of transformation. But making the current business run better and enhancing customer service are certainly two components of any transformation. It will be exciting to see if a brand as well regarded and storied as J.C. Penney manages to survive and thrive in the 21st century.”
