If you are struggling to grow your business, you may need to rethink your business model. You may need to reinvent yourself like J.C. Penney’s and Kohls. See how change is working for them.
This story is about how Penny’s and Kohls refused to give up. They made dramatic changes and now they are reaping the benefits.
J.C. Penney is making extensive reductions in its executive ranks, while Kohl’s has unveiled plans to partner with Aldi’s supermarkets in some of its slimmed-down stores.
Penney’s is eliminating 360 jobs as part of its effort to reduce costs and streamline operations. At the same time, Penney’s reported that other recent initiatives are paying off.
Penney’s’ comparable-store sales rose 2.6% in its fiscal fourth quarter, and total sales advanced 1.8% to $4.03 billion, from $3.96 billion in the same period a year ago. Net income climbed to $254 million, up from $192million.
Meanwhile, Kohl’s, which also posted sales and income gains this week, tells investors it’s beginning a pilot program with Aldi, the German limited-assortment grocery chain.
Kohl’s, which has been shrinking some of its stores to make them more efficient, is leasing space within up to 10 of those stores to Aldi.
While the Aldi stores will have separate entrances, the hope is that customers for convenient, low-priced groceries will spill over to Kohl’s.
Last year, Kohl’s began a partnership in which Amazon shops — selling Amazon products and taking Amazon returns — were embedded in several dozen Kohl’s stores.
Kohl’s’ same-store sales jumped 6.3% in its fourth quarter.
Chances are, you are facing similar challenges that seem impossible to conquer.
Penney’s has reduced the number of marginal stores and refocused on their core business. Kohls is forging new partnerships, even with Amazon to reposition their stores in the minds of consumers.
You can do the same thing if you can withstand the gut-check necessary to see your business from the customer’s point of view.
Locally owned and operated may mean to some consumers that you close at 6 pm and aren’t open on weekends.
“We’ve been in business for 30 years” may cause people to think you’re not up-to-date with the latest products and technology.
Consumers don’t see the benefit of doing business just because you advertise “locally owned and operated” unless you can clearly articulate how they benefit beyond some vague notion that it somehow benefits the local economy. It benefits you’re economy but what difference does it make for your customer?
It might be challenging but if you try, you can do it. The right answer for your business may be the toughest one for you to stomach. Just remember your business does not love you back. Its just a business that needs a new business decision to keep paying you for all of your hard work.
If you would like some help, drop us line.
Good luck. Talk to you soon.