Holy Shit, J. C. Penney

Ron Johnson was on the roll to end all roles in 2011. He was the man behind the Apple Store. He transformed computer sales from the darkly-lit fringe outfits of the '90s to the bright, minimalist, inviting atmosphere of today. In many ways, he made technology cool, and as a result he saw his bank account grow by some $400 million.

J. C. Penney, hungry for a hip new image, saw an enormous opportunity in Johnson. They brought him on as CEO in November of 2011 and tasked him with turning their tired old retail outfit into a hipster paradise of Apple proportions. So Johnson set to work.

"My ideas are big, you guys."

Step one: he hired a fellow Apple veteran as COO and fired a number of the stuffy old suits at JCP. He was taking the company in a new direction, and their input would be outdated.

Step two: he started courting hip brands, with the goal of redefining the type of person who shops at J. C. Penney.

"Seriously, though. Really big."

Step three: he took a jackhammer to the dishonest pricing policies of the old retail market. This was the big one. Standard practice in retail is to price everything on the high end, then have special discounts literally all the time to bring the price down to something that isn't exciting, but fair. Johnson wanted that to change. He repriced everything JCP carried to a lower, fairer price, then did away with constant coupons and specials.

It was a refreshing way for a CEO to look at business. He was keeping the actual, long-term interests of customers in mind. He was treating them like mature adults. Not children. Not sheep to be easily led astray by bright, flashy colors and big red lines through high dollar values and sunbursts with percentages in them. His ideas were truly visionary.

"Like, this big!"

And they failed harder than any ideas in the history of retail. I mean, they nearly ran J. C. Penney, a century-old institution, into the ground. As it turns out, people like instant gratification. They respond to it. They almost demand it. It makes them feel clever. When Johnson took that away from his customers, they took their business away from him.

J. C. Penney's stock price was cut in half during Johnson's tenure. Feedback from employees and customers alike was almost universally disdainful. After just over a year, he was removed from his position as CEO.

"Oh. Well, shit."

There are two lessons to be learned from this epic failure to market properly. The first is that retailers scam the shit out of you. Their sales practices are deceitful, and are based on the idea that you'll pay full price if you have a coupon pretending that "full price" is a discount. The second is that, if they didn't do these things all of these companies would die. Because we secretly like it.

Holy shit.

Holy Shit, the New Coke!

Let's say you're a soft drink manufacturer. In fact, you're the biggest soft drink manufacturer in the world. You're on top of the world for almost a century, keeping a huge majority of the market for yourself. Life is good. Then suddenly, one of your chief rivals decides to try a new markeitng thing and actually prove that people prefer Pepsi to your smelly old Coke in blind taste tests.

That's the position in which the Coca-Cola company found themselves in the late 1970s and early 1980s. Pepsi had introduced the "Pepsi Challenge," where random people would participate in blind taste tests and regularly choose Pepsi over Coke. It was a devastating blow to morale at poor, folksy old Coca-Cola, and the sales figures weren't helping. Between 1940 and 1980, Coca-Cola's market share dropped from a comfortable 60% to a terrifying 24%.

Pictured is (one of the buildings at) their rickety old mom-and-pop multinational corporate headquarters

So they sprang into action. The President of Coca-Cola and the VP of Marketing developed a radical rebranding strategy that would involve not only introducing a new, sweeter version of the famous beverage, but discontinuing the original. Enormous amounts of money went into meticulously crafting the new formula and taste testing it against both Pepsi and the old Coke. They called it Project Kansas.

If there's a better name for a project that would ultimately fail to excite anyone in a positive way, I haven't heard it.

And it won. Big time. It was poised to be the new favorite drink of the entire world. In 1985, they gave the green light. All at once, Coca-Cola stopped selling their old drink and launched the New Coke. If you or anyone you know was alive and cognizant during the 1980s, you know what happened next: a complete, unmitigated, cluster-fucking disaster.

Coca-Cola, April of 1985

It's not that people didn't like the taste of the New Coke. Research showed they liked it better than anything. It just wasn't Coke, dammit. There were some initial successes, but the backlash was outrageous. Coca-Cola's hotline saw a 200% increase in calls, almost all of which were people talking about the old formula as though their favorite uncle had just died. Some were depressed. Some were angry. Some even threatened to sue. After three months of this, the company finally decided to relent. They announced that the classic recipe would be making a triumphant return. The news was so celebrated that it was brought up on the floor of the in-session United States Senate.

And that was the last time anyone did something pointless, misguided, and stupid on the Senate Floor

Here's the part where I prove myself wrong. I called the disaster "unmitigated," but the re-release of the original recipe was actually a massive mitigation. People were so relieved to have their familiar product back that Coca-Cola surged ahead in the market once again. After a few months (and, notably, the release of Cherry Coke), Coca-Cola enjoyed twice the sales as Pepsi.

Little by little, the company put New Coke behind them. Sales in the United States were discontinued shortly after Coca-Cola Classic came back. A few years later, the New Coke was more or less gone. Finally, in 2009, the "Classic" label was removed, and the last vestige of the massive failure turned enormous success was gone.

To sum up: Pepsi, to most people, simply tastes better than Coke. But taste is almost insignificant compared to the power of familiarity and nostalgia.

Holy shit.