JCPenney Stops the Screaming

This new commercial addresses the frustration that people have from coupons and sales. JCPenney has so many random sales and coupons that consumers often get lost and confused: “Should I wait until the Presidents’ Day sale, or would the new every other early bird Saturday going to save me more money? Or wait! Perhaps I can use the extra 15% off coupon I get from completing that online customer survey.” Consumers often find themselves missing a great sale, or getting a coupon that expires within the next week after they just bought something. Now under new management, Forbes article describes how JCPenney rethinks value and aims their strategy at simplicity.

JCP passes $40, first time since '08

JCPenney’s performance has not been so hot in the past few years, but with its new ex-Apple CEO Ron Johnson and new president Michael Francis, former CMO of Target, it looks like it's heading in a positive direction. Wall street approved of the new strategy boosting its stock price up 15% back to levels it hasn't reached since late 2008.

Forbes is predicting that the department store will be the most interesting retailer of 2012. Changes that revolve around its new simplicity strategy include (1) everyday low prices, (2) themed monthly sales, (3) and clearance items. Clearer price points using whole numbers and a once-a-month super-sized catalog rather than a bunch of weekly mail deals also come along with some of the changes. The model of the store itself is also changing. JCPenney is adding over a hundred small unique shops within its store with specialty brand boutiques including Martha Stewart’s shop that will launch next year. In addition, they will be adding a “Town Square” that offers complementary services as well as promotions such as free hotdogs and ice cream. These major transformations will simplify the value conversations with its customers.

In addition to changing their stores, JCPenney has put forth a new campaign that will give it a fresh modern image. Earlier this month, they signed Ellen DeGeneres as their spokesperson. Standing up to for equality, the “Gay Day” flash mob with all employees wearing pink on the event a few weeks raised awareness and helped encourage more sales.

JCP's New Strategy

Will this new strategy work? I think this new campaign is definitely a positive move, and if JCPenney does nothing it will continue to lose sales to other retailers. Taking their traditional complex approach with coupons and hundreds of random sales a year and redefining themselves towards a simpler model is a great way to build the JCPenney brand. It’s very expensive for the retailer to constantly run those sales and promotions, and its quite evident that JCPenney has tired out their customers who are unable to buy at their convenience. This move will be positive for both the consumers who can now get the low price anytime without missing their kid’s soccer game on a busy weekend, and JCPenney itself “will trim promotions to 12 a year from 590” which many customers seem to ignore anyways. Walking into a JCPenney store this weekend, I see the department store redefining itself in a new niche. Instead of competing with the its old standard retailers like Macy’s and Kohl’s, I now see JCPenney as a differentiated sort of upscale version of TJMaxx or Marshalls. I can still purchase that quality average product, without feeling like I’m in a Burlington Coat Factory store. Overall, I think Ron Johnson is gonna do big positive things that will help turn JCP around. What do you guys think of his strategy?