JC Penney swings for the fences (Part 3): When the invitation is better than the party.

I like Penney’s new marketing campaign.

The TV ads featuring Ellen DeGeneres are captivating and funny–and seemingly everywhere. The print campaign does a solid job of re-branding JCP as fresh and contemporary, the monthly theme is carried through each piece beautifully and the featured items look great and seem well-priced. My only criticism is that the ads look a bit too much like Target (gee, I wonder how THAT happened).

But here’s the thing. Over the long-term the work of marketing is to differentiate the brand, create strong preference and reinforce loyalty/advocacy. Penney’s won’t win without doing a much better job of attracting and retaining a new generation of consumers and increasing the trip frequency, average purchase size and/or retention rate of the current base.

In the short-term, the work of marketing is to get the target customers’ butts in the store (or drive them to the website). I suspect the new campaign IS elevating interest in JCP and starting to drive incremental traffic. Yet while Penney’s has improved their presentation markedly, the stark reality is that both the product assortments and overall experience are still pretty much the same–i.e. unremarkable in most instances. And unlike Apple and Target, Penney’s store fleet is a grab bag of some very good locations with a whole bunch of mediocre and lousy ones.

We all know that when the invitation is better than the party, we aren’t very likely to get fooled the next time around.

 

 

 

10 thoughts on “JC Penney swings for the fences (Part 3): When the invitation is better than the party.

  1. Accurate assesment, earning BACK the consumers lost over the past 10 years and improving their product assortment are major hurdles. Also, with the EDLP, will female shoppers respond to a somewhat sterile shopping experience…..after all, the EXPERIENCE is why they would be headed to JCP.

  2. As a former JCPenney employee I’m following this with some interest, but as an interested observer only–I have no sway over any current JCPenney strategies. You’ll excuse me if I direct my comments toward you rather than the company.

    Part 1 of your commentary is a tough hurdle, but in my lone opinion absolutely necessary. Any retailer who has depended on the quick fix of a highly promotional selling strategy must now, literally, jerk its customers back to sane pricing policies. Coupons and daily or hourly discounts? That old dog won’t hunt. Time to put her down. It will be a painful and prolonged death, but JCP simply must get itself in line with other mid-tier retailers like Target and Kohl’s.

    I also suspect your research on the profitability of coupons and deep one-day discounts is flawed. A company LOSES MONEY on customers who repeatedly take advantage of such deep discounts. Do the math. It’s madness. What is really is is a long, slow spiral into zero gross margins and bankruptcyl

    In Part 2, you are certainly correct. The assortment has been in need of a complete do-over for decades, and yet two of the greatest retail minds in the history of merchandising have not been able to succeed at the task. An 80’s supermodel turned spokesperson does not, in the year 2012, create an aura of the new and the now in any context.

    No amount of advertising can sell bad product. That’s a core fact. I learned it the first day I entered college. Again, getting some fashion sense and relevancy into the company culture will be painful. The mid-level to management talent to execute it is simply not there and will have to be replaced.

    And Part 3, talk about getting the cart before the horse! If I were king of the forest, I would have made sure there was something in the stores that people want to buy before going forward with an expensive marketing campaign extolling an exciting new line of merch. It’s an old story: They can’t deliver on their promise, with is an instant customer turn-off and has long-term negative consequences.

    In sum, I believe you’ve given us a valuable analysis of the strategy, but whereas your POV is focused on pricing strategy, I would instead place the onus on the shoddy selection of merchandise, particularly in the profitable fashion segments.

    I hope you continue your excellent critique of the historical make-over. It’s a once-in-a-lifetime lesson in retailing, marketing and merchandising. I suspect it will be case-studied time and again. I also hope you turn your eye toward the JCP website. I defy you to complete a purchase from it.

  3. Can you hear “Softer Side of Sears” playing…. lure them into the store with some high expectations, lose the great merchandise in the clutter, jam the aisles with the deal of the day, forget to clean the store and then wonder why no one came back…

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  6. Product…product…product…product…JCP doesn’t employ enough merchants who know about product…end of story.

  7. IMO the big mistake is pulling the discount coupon all at once rather than gradually over 1 to 2 years. Additionally, changing the pricing and marketing without any merchandise or store experience change is a huge mistake. Potential new customers attracted by the new marketing will be disappointed. Existing customers expecting discounts will be disappointed. I am afraid the financial results will also be disappointing.

  8. Pingback: JC Penney: The recap and the road to recovery « Steven P. Dennis' Blog

  9. It’s unfortunate that JCP seems to have no understanding of their core customer and/or their target market and therefore no differentiated branding strategy. It’s as if they are trying to copycat Apple & Target without the brand permission, the experience or a customer base who cares. Great cautionary branding tale. Thanks for sharing your perspective.

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