Credit Unions Could Learn from JC Penney

There’s a J.C. Penney in my hometown and the last time I went there (several years ago) was before a business trip when I needed a newer, small piece of luggage to replace a very old, ragged one. I don’t know why I chose Penney’s to make a purchase. I couldn’t even remember the last time I did… probably with my Mother in the 70’s most likely because Sears was out of Toughskin® jeans in my size. Of all things I might buy at JCP, luggage might just be the only thing I actually would.

JC Penny turns 110 years old this year. Over the past 20+ years, they have tried several ways to improve the brand and diversify the company.

• 1983 The company phased out its electronics and auto departments
• 1984 acquired First National Bank of Harrington, Delaware1989 first aired the JCPenney Television Shopping Network
• 1993 became the world’s largest catalog retailer after Sears closed its catalog business
• 1996 acquired Eckerd drugstore chain (sold off in 2004)
• 1998 launched it’s own Internet shopping store
• And more…

Maybe some of these actions kept J.C. Penney from folding and maybe some kept them from growing. One thing is certain, when someone heard the name J.C. Penney, they most often envisioned a department store. For the younger generation, I believe many considered it to be their parent’s or grandparent’s department store.

So how does this relate to many of today’s credit unions?
There remains a generation gap for most credit unions and it won’t go away soon without comprehensive change. As an example, a credit union’s micro-site might be specifically designed to appeal to younger audiences, however, the main site and physical location of the credit union appear stagnant and stale.

Before considering what you are going to do, make sure you know why you’re going to do it. Follow your true organizational philosophy, everything else is a result of being true to who you are.

What J.C. Penney is Doing Now.
They have focused in on retail. Created a new brand manifesto that they shared with the public and then set about changes in not only how they look, but in their comprehensive retail strategy.

J.C. Penney Retail Tactics Summary

• Radically simplified pricing
• Slimmed down and improved brand selection
• Store layout of “mini-boutiques” surrounded by a “town square”

Their goal is to become “America’s favorite store” by the end of 2015. Not America’s favorite department store, but America’s favorite store of any kind.

It is apparent they are undertaking a calculated, comprehensive, and significant capital risk for long-term survival. How many of us in the credit union industry can say they have or will do the same?

Sales Commissions as Motivation.
Just as new CEO Ron Johnson had done with Apple Retail stores, he continues his belief in non-commissioned salespeople. He argues that employees should give the best advice and support to customers, not the advice that earns them the most. He believes that you can motivate by mission, or by money. To motivate by mission, it is critical to retain and hire people who believe in what you believe.

How Different Do They Look?
If you haven’t seen a J.C. Penney circular in awhile, I recommend you check one out, (typically found in the Sunday paper). They’ve undergone a complete overhaul to say more by doing less. If you are into YouTube videos, check this one out called Jumping Through Hoops.

I look forward to following their progress and seeing if they reach their goal of becoming America’s favorite store.

Maybe it’s your credit unions turn to try to do the same for banking.