The strategy has worked over the years. ICP tethered the storm through many major crises. However, in the recent years, ICP has suffered due to a decline in business. The Great Recession hit ICP rather hard. In effort to re-gain market share the Board of Directors hired Ron Johnson. Johnson was the head of Apple’s retail stores and former Target executive. Johnson proposed to re-brand the retail store in order to make it more competitive. The strategy focused on making American’s favorite store. In 201 2, Johnson introduced a new business plan to reinvent ICP.
It was a four year plan that called for the six Up’s, new pricing, personality, reduce, promotion, place and presentation. For a number of years, ICP served the working middle class with quality merchandise at reasonable prices. ICP catered to the lower end market. ICP had a coupon policy that worked well because it created word of mouth and buzz among consumers for promoted merchandise. ICP decided to move away from the coupon policy. It changed its strategy and product line to cater to upper scale consumers rather than middle class consumers.
In addition it closed its catalog department which, in my opinion, drove customers into the stores for one reason or the other. ICP customers didn’t buy its new business model and as a result lost loyal customers and market share. ICP sales, operating margins and stock declined significantly. The new strategy, which involved getting rid of the sales and promotions that long time customers loved, did not meet customer satisfaction and feedback was very negative. In effort to clean the mess created by Johnson, ICP re-hired Mike Oilman, former CEO. Oilman needed to turns things around quickly.
The first initiative was to reconnect with the customers by having the price and value perception in line tit the customer buying criteria. The company returned to the coupling and discounting method. Oilman felt that in order to regain customers, he needed to bring back the coupons. The coupons attract customers into the stores and while in the store customers they tend to buy more than expected. This is positive strategy. The recovery trend has been slow and not promising. ICP has not fully recovered those loyal customers. In 201 5, ICP closed 40 stores which make us believe its future is full of uncertainties.
Although there is much insecurity, it is believed that selling these stores will pen doors for growth and reposition itself in the market. ICP decided to bring back the catalog book and orders. This is expected to BEA huge kick to the business. It appears the old strategies that at one point were successful are now part of Scup’s future. The old model is trending to be the new model but with enhancement. Do agree with the coupon and discounting strategy. It is an incentive for customers to drive to the store to browse at the new products and ultimately purchase them because they are getting a good deal.
As a customer of ICP, I would recommend to management to change their assign line. Lately, it is difficult to find nice clothing at reasonable cost. They need to target the working middle class customers better. These are the customers that will generate business and turn things around for ICP. ICP was very organized and customers could find what they needed easily. Recently, it seems ICP display model is very similar to Sears who is unrecognized and messy. Based on this observation, would recommend a change in the display or organization model.
There isn’t any consistency to their logic or display model. This aspect is huge in customers eyes. If ICP was to get a handle on this concern, it will do so much better. Would also increase the availability of cash registers. I find myself waiting in line to pay for more than a couple minutes. ICP used to have cash register all throughout the store however they removed almost all cash registers, leaving one at the front desk and one at the shoe department. This is not acceptable in customers view. Customers want to get in, find their products and cash out as quickly as possible.