JC penny stocks went from $86 in 2007 to $0.60 per share in 2019. That is 99.3% value lost over the course of 12 years. Adjusting for inflation, $86 today would be around $106.50. You can then adjust the actual value lost to 99.4%. If you invested 1 million dollars in JC Penny Stock in 2007 you would have $5,633.80 left, tragic.
Macy’s also saw a significant drop in a shorter amount of time. In 2015, Macy’s stock prices were $72.80 per share. Today, stock prices for Macy’s top off at $15.5, a 78% loss in 4 years.
While some brands are flourishing in the last 5 years and seeing steady growth, many trusted long standing retailers are seeing their value plummet with no indication of recovery.
The old way of retail is dead. The new way of retail is yet to be embraced on a large scale and the casualties of big retailers continues to add up.
Take a look at the trends going on with major retailers such as Macy’s, H&M, Hudson Bay, Ascena Retail group, and LBrands. (We are aware that Ascena had a bit of shady operation going on which led to their most recent drop in stock prices and Victoria’s Secret has had much controversy as well.) Most of these stocks are following a similar trend, decline.
Future retailers have to invest in improving the shopping experience, which is now becoming a matter of life and death. Many retailers who are seeing a steady decline are having a difficult time providing value for their customers. You can’t cut corners with the customer and expect to prosper.
America’s biggest retailers such as Macy’s, Neiman Marcus and Nordstrom attempted to revive their business with tech based "innovation teams" but failed to see any significant results. Instead of helpful technology, customer feedback loops, interconnected experiences and the stores of the future, innovation teams did the following:
Incorporated charging ports to help customers charge their phones
Created non-inventory stores where customers can have experiences outside of shopping
Implemented “cool” digital displays where customers can look at moving images on very tall screens
Added more coffee bars
It's no wonder that many of these retailers have seen their value plummet. These types of ideas produced no real value for customers and subsequently, no real value for shareholders. Shopping is about matching people to product. Failure to do so results in major losses.
Physical retailers are dead. The old way of doing things proves to be unprofitable and the only way to push forward in the future is to create new experiences that are customer centric.
In a consumer-centric economy the best thing you can do is be consumer focused. The key to being consumer focused is simple: Match people to product swiftly, continuously and in the way they want.
No one solution is an overnight process. All solutions require thorough consumer behavior analysis, new persona development, and investment.
Tariffs are going to continue to plague the retail industry. However, shoppers are still going to shop. The best way to sell more is to create experiences that keep the customer happy. Forget the coffee bars, charging ports, nail salons and other things, opt for a more connected, tech-enabled, data driven, connected experience. These experiences can be facilitated through proper technology integration. These changes won’t happen overnight, but it may be a great idea to factor in a budget for new research and development that will resonate with your actual customers. The sooner the better, or enjoy becoming a penny stock.
Jcouch@luxorandfinch.com