Mike Ullman Recognized by NRF With Achievement Award
During an awards ceremony yesterday at its annual Big Show in New York City, the National Retail Federation (NRF) feted Mike Ullman, current executive chairman and former CEO of J.C. Penney, with its Gold Medal Award for his 30-plus year career and contributions to the retail industry. Ullman served as CEO of the Plano-Texas based department store chain from December 2004 through October 2011, before returning in April 2013 to help rescue the company from a disastrous year-and-a-half stretch under the guidance of Ron Johnson, a former Apple executive who attempted to transform Penney into something it was not.
Interviewed by Trish Regan, a FOX Business anchor, Ullman talked about some of the factors that have led to his successful career. In typical fashion, Ullman downplayed his personal success, noting that he wouldn't have been able to lead successfully without a great team to support him. That support trickles all the way down to the store associate level, whom Ullman said are much brighter than he is.
“It's about the team, not you,” Ullman said.
In his second go-round with Penney, in which he was tasked with saving the retailer from what essentially was a death spiral, Ullman again consulted those closest to its customers – store associates. He noted that Penney's store associates are its customers. They by and large are the same demographic and have the same issues at home. In short, they're middle class Americans, same as the people shopping with J.C. Penney.
“They have too little time, too little money, and two little kids,” Ullman jokingly said of Penney's customers.
Belief in the Future of Stores
There's been a flurry of brands announcing store closures in the first three weeks of 2016, from Wal-Mart to Sears to Macy's. J.C. Penney isn't exempt from this list, but is closing far fewer stores this year (seven total) than those other brands. Ullman is bullish on the future of brick-and-mortar stores, noting that retailers' most sought after demographic – millennials – haven't abandoned shopping in-store.
“Millennials consider the store a social experience,” Ullman said. “They're looking online first, but they're still shopping in stores.” Countering the argument that physical stores are dying, Ullman said “what's dead is the people that don't understand the purpose of the store.”
That said, Ullman isn't burying his head in the sand. He realizes that tough decisions have to be made, and that if a brick-and-mortar location isn't profitable and future cash flow projections at that store aren't looking good, the right thing to do is close the store and move on.
Amazon in the Crosshairs
Simply put, Amazon.com is a competitor for J.C. Penney, Ullman acknowledged. “Amazon isn't going away.” To help Penney compete with the online behemoth, the department store chain is trying to differentiate itself by offering unique and quality merchandise that can't be found on Amazon.
“We have our own brands, Arizona for example, that will never sell on Amazon,” said Ullman. “We've also partnered with brands, Sephora being an example, that have chosen not to sell their products on Amazon.”
Connecting With its Core Customer
Job No. 1 for J.C. Penney – or for any retailer for that matter – is to know its customers. Reconnecting with the middle class families of America was a goal for Ullman when he returned to lead Penney again. He made significant progress. And it wasn't all from bringing back coupons.
“We did business with half the working class families in America last year,” Ullman said, adding that J.C. Penney had 87 million customers when he left the brand, and it's back to 87 million customers. There's still work to be done – we need those 87 million customers to come back and shop with us more often, noted Ullman – but Penney is moving in the right direction. The key according to Ullman is listening to acting upon the advice of the retailer's store associates. We have to give our customers back what we took from them, he said.