JCPenney finds product excitement...everywhere
June 9, 2003,
Plano, TX — No supplier matrix can be static.
Retailers who say a matrix is closed "are doomed to be product stale," maintained JCPenney's Peter McGrath.
And product development cannot be accomplished in a vacuum, McGrath explained. "We get inspiration from all over — TV shows, museums, major trade shows like Heimtex and especially markets for specific product areas."
In contrast to some retailers with major private label operations, McGrath is a firm believer in market weeks. "They are valuable, especially in terms of verification of what we see happening. They give us a basis of comparison for things we are doing. But also, markets give us the opportunity to go beyond the matrix in seeing new companies. It's a big mistake not to visit suppliers we are not doing business with."
And sometimes, he commented, "you have to be brutally frank with a supplier" about product development, who's hot and who's not.
McGrath also has an interesting approach to trade shows like Heimtex, which he considers an essential trip. "I always send at least several of the same people year after year. There are many shows where a newcomer will come back and rave 'brown is the next color' when that venue is known for brown year after year."
In developing Penney's private brand programs, McGrath sees a growing synergy between home furnishings and apparel fashion. "There's a tendency in home furnishings to hang on to something and keep it running for a long while." In fashion, there's a shorter lifespan, a path that he is helping to move the home area along.
But overall, he emphasized "the home furnishings industry has profoundly changed."
Looking around the retail arena and the explosion of private brands and exclusive designer/licensed franchises, McGrath said "everyone's out to differentiate themselves. That makes it difficult to put market goods in the stores. If products are non-branded, it's more and more difficult to work with them.
"All private brands are seeking to differentiate in quality standards, value and trend-right fashion. We challenge the market to develop product for us along these lines. Vendors have to give more value added specifications in items — and it's not necessarily price," McGrath insisted.
Penney's own product development activities begin with the company's creative team that analyzes these price points and trends,
McGrath explained. "The merchandise steers us into price points. But there's always the tendency for product developers to step out of those zones."
The internal product development people work with the CAD department and fashion directors. "If the theme is fruit, for example, the CAD team creates the artwork, sends it to the manufacturer overseas who produces it."
The old Penney "reacted only at the store level, which was a reaction to what already was in the mall," McGrath explained. Two years ago the trend organization was put in place "and we structured to get the best in trend and color services as well as being active in travel, and acquiring the knowledge of the brands in the market."
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