Much has been written speculating about why Ron Johnson failed–spectacularly–at J.C. Penney. What makes the episode so surprising was that Ron Johnson was not a retail novice. His successes as an executive at Target and in building the Apple Store system are, if not legendary, at least most impressive.

Much has been made of Johnson’s decision to adopt a fair pricing retail strategy and make J.C. Penney into a hipper retailer–re-branding it as "JCP", for example. Frankly, I think that such articles give too little credit to the modern American consumer. Do these commentators really believe that customers cannot figure out when they are getting a fair everyday deal, as opposed to marked-up pricing and artificial sales?

I mean, Dillard’s converted to a fair pricing strategy in the late-1980s. While it has regularly tweaked its strategy by offering, for example, deep discounts on slow-selling merchandise, it has not failed, growing into a very successful regional department store chain. And, as many people have correctly noted, J.C. Penney’s stores had problems prior to Johnson’s arrival–especially compared to rivals like Kohl’s and, yes, Target. I think that Johnson’s failure at J.C. Penney was much less prosaic than customers turning away from a fair pricing strategy they–allegedly–did not understand.

I began to be concerned about the new "JCP" last summer when I overheard my wife talking to some of her friends about JCP. A brand-new JCP had opened at the mall, taking over space formerly occupied by Boscov’s. And these mothers were complaining that they couldn’t find anything to buy in the new store. They were not suggesting the layout was poor. No, they were saying the merchandise selection was unappealing to them. These customers were core JCP customers: professional, middle-class, suburban mothers who shopped and found plenty of worthwhile merchandise at Target, Kohl’s and Macy’s. And they couldn’t find a single thing to buy at JCP.

Unfortunately, I had overheard such comments before. For my mother’s friends, in the late 1980s, when Sears embarked on a similar "fair" pricing strategy but was equally undone by poor merchandising.

What is now coming out is that the new JCP failed to understand its customers, and made wholesale merchandising changes without either making sure it had new customers or that those merchandising changes pleased its current customers.  For example, the Wall Street Journal recently reported that JCP last summer eliminated the St. John’s Bay brand of women’s clothing (sub. req.), along with all of the staff behind the brand. St. John’s Bay was a billion dollar brand for JCP–itself a $17.5 billion company in annual sales prior to Johnson’s arrival. But it, and hundreds if not thousands of jobs supported by the brand, were summarily eliminated.

So, when I hear pundits talk about the failure of Ron Johnson’s pricing strategy, I pause and think what really failed was his merchandising strategy. And that failure appears to have been driven by a distinct failure to understand his customers, and what his customers wanted. The lesson is important for all retailers, including franchising systems. The good news is that franchising has great leaders like Andy Puzder and David Novack, just to name two, who remind us through success that staying laser-focused on our customers’ needs is essential.