If you haven’t heard that former Apple executive Ron Johnson became JCPenney’s CEO in November, then don’t worry. It just means you’re not an insane newspaper junkie or a total marketing nerd. Congratulations! When I heard the news, I wondered what sort of new ideas he’d bring to this struggling retailer. Would he bring the sleekness of Apple stores to Penney’s or increase their level of service? Well, to answer your question, he’s not only aiming to achieve these goals but several others, too!
"Look honey! Another sale!"
Chances are you’ve received at least one mailing from JCPenney (probably three this week alone). Well, that’s soon to change since they’ll be ditching the hundreds of sales that they offer throughout the year and instead going with a simple approach to their pricing strategy. “Every Day Pricing” will offer customers more predictable pricing instead of the current “I’ll just wait until this goes on sale” type of mentality their customers currently have, myself included.
Johnson has quite the resume of breathing fresh air into brands already. He was a mastermind responsible for making Apple Inc.’s stores the success that they are today and he was a former executive at Target Corporation as well. He joined Penney’s board in August and has brought in former colleagues from both Apple and Target in hopes of revitalizing this struggling retailer.
There are five points that you’ll notice the next time you go into a Penney’s or turn on the TV:
1. Sale prices are now “Every Day” prices. Before you freak out and assume they’re going to jack up their prices, they’re not. Their plan is to use last year’s sales data to mark down prices on all of their merchandise this year, by at least by 40 percent or lower than last year’s prices. Example: a Liz Clairborne purse regularly priced at $49.99 could have an “Every Day” price of $25.
She's happy she got a great deal on her jeans from JCP!
2. Easier pricing. As you noticed in point #1 above, JCPenney will use whole figures when pricing their merchandise. Good bye to jeans for $19.99 and hello to jeans for an even $19 or $20 instead. As someone who always just rounded up (I truly pity people who think to themselves: “it’s only $19.99?! That’s under $20! What a deal!”), I welcome this change with open arms.
3. Easy-to-decipher tags. I shop more often than what’s good for me, so I know from experience that it’s annoying when retailers keep marking down their merchandise with stickers. I never know what the “final” price is, and sometimes stickers do fall off or get ripped off. JCPenney is changing that, too! Now when something is discounted, it gets a whole new tag! A red tag shows an “Every Day” price, a white tag is a “Month-Long Value”, and a blue tag shows the “Best Price.”
4. Less sales. A red “Every Day” price tag is just that — the everyday price. The “Month-Long Value” white tag will show what’s on sale for that entire month, not just for the next 6 hours, the day, the weekend…but for the whole gosh darn month. The stuff that doesn’t sell will have a blue “Best Price” tag put on it; these items will go on sale on the first and third Friday of every month. Sound familiar? That’s because these Fridays are when many of us get paid! This gets a major thumbs up from me.
Mmm, apple pie and baseball
5. New logo and advertising. Their logo has changed and may have you thinking of homemade apple pie or baseball. According to their press release, “the new JCPenney logo, which combines the elements that have made JCPenney an enduring American brand, by evoking the nation’s flag and JCPenney’s commitment to treating customers fair and square.” I totally agree with this! Next, their TV ads are a bit from their norm; some feature customers who are fed up with cutting coupons and seeing the sweater they’re currently wearing on sale for a cheaper price. Ellen DeGeneres will become their new spokeswoman and a catalog will be mailed out each month. Even though I do a lot online these days, I do still love flipping through a catalog, especially one that is 96 pages. Score!
BONUS: The biggest news yet! Martha Stewart mini-shops will be introduced starting in 2013 to bring in her fans to do some shopping and become a little bit more like Ms. Stewart. And in true Apple fashion, a Town Square will be built inside Penney’s to offer services and expert advice (cough* Genius bar concept *cough)?
Even if you aren’t a marketing nerd, you have to admit this is pretty radical stuff for JCPenney. They’ve been around since 1902 and could use a bit of refreshing for today’s consumers. They’re the first major retailer to go through such a drastic pricing change, up almost a complete 180 degrees it seems.
Despite my enthusiasm, critics have mixed opinions on JCP’s new pricing strategy. Walter Loeb, who is a retail consultant based in New York, said that their new pricing is “visionary” and “revolutionary.” On the flip side, Charles Grom, a retail analyst at Deutsche Bank, notes that the challenges Penney’s faces will be difficult. Changing shoppers’ buying habits can’t be done overnight, and reminds us of Macy’s cutting back on their coupons a couple years ago, only to see sales fall. They reversed their decision as quickly as possible.
Time will only tell what the masses think about these new changes.
What are your thoughts? Do you like the new strategies? Does one stand out more so than another? Sound off below!
JCPenney logo courtesy of PRNewswire. Logo is a registered trademark of JCPenney Company, Inc. All rights reserved.
Article by Amy Swanson
Amy is one of Quality Logo Products’ content developers and social media coordinators. She is a self-professed newspaper nerd and thoroughly enjoys reading business and financial news and having impromptu discussions about it. Oh yeah, she’s “one of those” people! A true Midwestern girl by nature, she loves riding her bike, photography, and the Chicago Cubs.
{ 38 comments… read them below or add one }
I think that all of this sounds awesome in theory, but I’m curious as to how it will pan out. I’ve always been confused by the pricing strategy of JCPenney’s and stores like it (I’m lookin’ at you, Kohls.) It seemed like every time I went in, there were sales signs on EVERYTHING, with those big charts listing the original and sales prices. I know I’ve thought before, “Hey, all of this stuff is drastically on sale every time I come in here. Instead of trying to trick me into believing that the original price was $156, but it’s on sale for $16.99 (all year long), why not just price it at $16.99 to begin with?”
I’m assuming that’s the idea that Penney’s is attempting to tackle, and I hope that works out!
I hate how Kohl’s, JCP’s, and Carson Pierre Scott’s all look the same inside. I’ve literally had to stop and think to myself after a while of walking around, “Which store am I in?” So annoying!
I also hate that I seem to find the one rack of clothing at JCP that isn’t on sale. Every other rack has a giant red sign on it saying, “LOOK at these awesome deals, we’re practically giving it away!!” But the shirt I’m looking at is still full price. I’m hoping this is addressed with their new strategy.
Plus, I hate getting mailers from them every other day announcing a new sale. Like you said, just make it 16 bucks to begin with and be done with it.
AS- nice one. What do you think of their marketing / commercials? Annoying or well stated?
Hey Hoff, what do you think of their khakis? Are they nice and fitted like those ones you wear every day? Just wondering if JCP ones iron as nicely.
#youaresocool.
I’m not sure about their Khakis. As an elitist, I only rock Banana Republic boot cut Khakis. You know, the ones you compliment me on all the time, like yesterday.
Scooby, I’m curious, how are their Polos? Do they have the little man on a horse on them? Do they have enough of a color selection to facilitate you wearing a different color for each day of the month? More importantly, does JC Penny sell ANY clothes of any kind that match a 2002 Hummer H1?
Tony, I don’t think Amy cares to comment on our thread, as she knows the answers to all of your rhetorical questions, but both of us are curious to know, when you shop on the right side of the BR store, if you find those fitted pants in the petite section. We also find it kind-a odd that you decorate your office with the boxer boxes; is that like a hangover from the A&F bags you used to cut out? It looks like their marketing is working with or on you.
#poloman
While I’m a little worried I’ll need a decoder ring to figure out all this new fangled marketing, I am VERY excited by the precedent set! Everyday low prices? YES. No .99 annoyingness? YES! Cute girl in the (likely unrelated) picture rocking metal hands? Double YES!
I’ve only shopped at JCPenny a few times, but I enjoyed it. The only downside is their sizes varied WIDELY from brand to brand. I’d be a L in one, and a S in the other. I’d like to see that cleaned up, but this new marketing strategy will most likely end up with me checking it out at the very least!
EXCELLENT post Swany!
Thanks Jeff
I really hope they implement their new strategy slowly, because I just picture a bunch of customers (I’ll let you imagine your own stereotype) yelling at the sales people for not understanding the new prices. I think this is a great idea and I hope other companies jump on board, because the concept sure seems smart.
I don’t know how I feel about this, being an avid JCPenny shopper. My parents always shopped for me there and now its one of my favorite places to shop for my daughter. Some of their sales were staples to me. The Back to School Sale, MY FAVORITE! My mom would go out and spend endless amounts of money because the clothes were priced at such a great deal. Are they still planning on keeping those sort of sales around or is it just bye bye? In theory this sounds great, but how it will actually play out is a whole other thing. For me I’m the sort of shopper that only goes out when I know there is a sale. I don’t have the luxury anymore to just go out and wander aimlessly to see if the prices are worthwhile. I need to know before i start packing up my daughter and step foot out my house that its worth my time and money. I think initial customer sales are going to decline because new isn’t always so welcoming (especially for something thats been the same since FOREVER!) but it has the potential to pick back up once customers get used to it.
I’m curious too, Candice! I occasionally shop at JCP but don’t know when their big sales are. Carson’s on the other hand, I start counting down the days until their Goodwill Sale since everything in the store is on sale, including make-up, perfume, and their Coach items (which NEVER goes on sale).
I think you’re right, once people get used to the new pricing system I think it’ll be a great asset. Change always makes things a bit rocky at the beginning, so as long as customers can be patient, I think they’ll really enjoy the new strategy.
AMY! when does that sale usually happen? the one at Carsons. Im obsessed with Coach, but cant exactly afford it, LoL. Let me know when their next sale like that is, please!
They do them twice a year. The next sale I think is in March, I asked a friend who works there earlier today so when I find out for sure I’ll pass it along
Have you ever gone to the Aurora Premium Outlets off of I-88? There’s a Coach outlet there with some amazing deals. I bought a purse from there last year that was originally $325 and I got it for $80. Highly recommend it!!
Yes! i Actually have been there, i Love it!! Thats awesome you got that great of a deal! and yes, next time you hear about it pleasee let me know! thanks girl!
The sale is the first week of March this year
awesome!! thank youu!
Thank you, Amy. I must say, up until now I have been seeing J.C. Penney’s new commercials, but they didn’t make one bit of sense. I had no clue what was going on. I still don’t think I actually LIKE the commercials, but I understand them now.
So thank you for bringing a little bit of clarity into my scrambled, little world.
(p.s. I concur on the YES and Double YES with Jeff about the “No .99″ and the “Cute girl rocking metal hands”)
I’ve received some mailings from them talking about the new system, however I’m not sure if everyone else who got one will read it. I had to explain it to my parents, and even now I think they’re still confused. So, you’re not alone
I think as long as they make it extremely clear what the new changes are in the store, I think they’ll be okay. It’s going to be rocky for a few months I’m sure, but once that passes I think people will really like how simple and easy to follow their new pricing is.
Nice break down, Amy!
I’ve avoided shopping at Kohl’s and JCP because of their “Oh man, this stuff is on sale for $13.57 instead of the regular $52!!!!” nonsense. I don’t like to play the sale game, I just like to pay a reasonable price for an item. And month-long sales? That’s a dream come true! I will definitely check out JCP again with these changes.
Thanks, Mandy!
Math doesn’t relax me, so when I’m shopping the last thing I want to do is figure out what 47% off of a pair of $64.32 shoes is. With this new pricing system, that won’t be an issue any more
Yay! Shoes for $34, done. Here’s my card, where do I sign?
This sounds awesome! I def feel like I will be shopping at JCP more often now because of this. I am so glad you posted this because I had no idea about any of this. I hate going to stores that have sales with a million little stickers on the pricetags, that was just really annoying. I am liking this every day low prices concept. Hopefully it turns out to be very successful for them.
Awesome post, Amy!
I really hope it’s successful for them too, Jaimie! If nothing else, it’s certainly something new and exciting to talk about!
Thanks for this, Amy — like Alex, I had no idea what those JCPenney commercials with people screaming in them were about, so it’s good to have an explanation (because I’m too lazy to google it myself, lol). This sounds like a really cool thing, if it works! I admit, I do like the psychological feeling of being able to say I got a shrug originally $50 on sale for $10 … but yes, it’d be way better if reasonable prices were the norm. Also, removing the rounding ($19.99, etc.) seems pretty revolutionary! Are there ANY stores that go with whole numbers for their prices anymore? Anyway, I look forward to see how this whole strategy works out. Thanks again, Amy!
Hahaha, I’m glad this helped Rachel
I honestly haven’t come across any companies that use whole numbers in their pricing. It seems like they always end .95 or .99 on the price tag, so that alone is pretty revolutionary for JCP. Thanks for reading and commenting!!
I think the new prices are too expensive. Yes, things are supposedly 40% off, but JCP almost ALWAYS had everything 50-60% off, plus those coupons were great. I agree that it’s silly to jack up prices just to have a sale, but if the original prices were the same before the 40% off, I would rather have 70% off the original price (60% sale plus 25% coupon) than just 40% off. I didn’t mind waiting for a sale because I never had to wait more than two weeks. With today’s JCP prices, I’m finding I can go to Macy’s, Younkers, or Kohls and get similar items for less on sale with a coupon.
Thanks for stopping by and commenting, Bob
JCP has some pretty stiff competition with Kohl’s, Macy’s, Younkers/Carson’s so I think they’re hoping this pricing strategy will differentiate themselves amongst them. It’s almost like they’re telling consumers, “You can go to Kohls and bring your coupons or come to JCP and get the lowest price already”.
I’m very curious to see what comes from this new strategy and what changes will be made, I’m sure there will be a few before all is said and done.
I get reminders in the mail all the time for JPC sales, but I hardly ever go unless I have something in mind I absolutely need. A sale that runs all month is great, then if something comes up and I can’t get to the store when I planned to go, it’s no problem, the item will still be on sale the following week. I think this is an awesome idea, especially if everything is a lower price all the time. Great post Amy!
I’m the same way, Jen. I’ve been trying to budget my finances better so I avoid reading through the mailings that come every day. My closet and dresser are already busting at the seams, I don’t need any more clothing hahaha
We shall see how this works out for them
Thanks for commenting!
I bet Billy Beane would approve of this strategy! The truth is in the #s!
‘Moneyball’ is still on my list of movies to see, but if Billy Beane would approve of it, it’s gotta be golden then!
Between this and JCP’s recent stand against unsavory organizations I oppose, they’re really on my good list this year! Not that they weren’t already, but this makes me like them even more. I’m so excited to go there and check it out — I always find THE best stuff from JCPenney and Kohl’s!
The bi-weekly pricing is the only thing that confuses me here. I have a hard enough time remembering what day/time of month it is half the time! #ImOld
Even if I’m not looking for anything in particular, I can ALWAYS find something I need at JCP or Kohl’s. It’s a sickness I think!
I’m really curious to see how people react to the new strategy. I’m sure there will be a bumpy period, but hopeful things will be easier and smooth out
“Sales” are a curious thing, I’ll tell ya. When I worked at unnamed-retail-store-in-the-outlet-mall-adjacent-to-QLP, almost EVERYTHING was on sale. Never, ever, only once in a blue moon did something actually ring up for the full MSRP printed on the tag. People felt like they always were getting a deal. Or they came in at just the right time. These feelings were only amplified when holiday sales and clearance sales actually did happen.
Regardless of whatever the true vale is of those clothes, I think it’s a smart strategy, and better to keep a steady stream of customers coming in, year-round (especially in this economy) than have them all swarm in for Black Friday and show up nary a day afterward.
It’ll be interesting to see how this works out for JC Penney. Neat article, Amy!
Thanks, Eric
I’ve always wondered if stores hoped that every day was like ‘Black Friday’ or are they thankful it only comes once a year? Maybe the people up at corporate wish that, but as a former retail sales associate even just once a year seemed too much.
I really hope after the first quarter or year using this new strategy, they release some information about it. Did it pan out exactly as they were hoping? What did they find worked the best? The worst?
While I actually am fond of eliminating the .99 portion of the prices, I am not too fond of the elimination of coupons! Especially the 15% off coupon you’d get for completing a survey. I used to do those surveys all the time! I don’t know about you, but coupons were always an incentive for me to go shopping. It feels good to knock down a few dollars from the original price, even if it’s just a FEW! I also enjoyed their $10 off $25 deal. The store would be crazy packed whenever they had that promotion going on! I’ve been to JCP a couple of times since Feb. 1st and the store looks kind of empty. I hope their new strategies work! As for me, I’d rather shop at Kohls or even Macys with their coupons. Coupons are a must have, in my opinion. The pricing change JCP has made is great, though. I can’t stand when someone says, “Wow $19.99! That’s under $20!!” Good idea with the whole number pricing, bad idea with eliminating coupons!!!!
I’m all for saving a few bucks too, Rebeca! My downside is that I always leave the coupons at home on the counter when I’m out running errands. Or I put them in my purse so I’ll have them, and then I forget about them and they expire- haha. One day I’ll find a system that works
Thanks so much for reading and leaving a comment, I hope their strategies work too!
This would have been great if they actually did slash the prices for everyday, but my experience and I have the receipts to prove it — November with coupons, drapery panel cost $28.00. February same drapery panel, no coupon, everday sale price $40.00.
Did I miss something?
Wow, Maria that’s a huge difference in price! I’ll be honest, I haven’t had a chance to stop in a JCP and check things out yet, but from everything I read I thought their prices would be much more reasonable. Even without coupons! But you proved that that isn’t the case, at least not yet.
While I find this new strategy fascinating, I do hate how it will screw things up for a couple months while they get all the ‘bugs’ worked out. As far as I know, you haven’t missed anything and I hope they get things figured out sooner rather than later.
Thanks so much for stopping by! I hope if you need a third panel you’ll get a much better and reasonable “everyday” price.
I have been a JCP associate for 14 years now. I worked the last two nights and I can say that the customers here are getting this change. We get many, many positive comments about the strategy. I worked changing the prices those weeks and I do not understand the comment about the draperies. I have had some customers say that it seems like we don’t have as much of a selection, especially in the misses department. That isn’t so. What they did was adjust the heighth of the racks and don’t force too much merchandise on the racks like they used to. Instead of having ten size 12′s on the rack, they try to have a couple of each size. The racks aren’t so close together anymore either. The first and third Friday mark downs rival the best of our clearance sales. Last Friday we had a lot of racks of merchandise marked down to $2 and women’s winter coats were selling for ten bucks. People were buying 6 and more coats at a time last week. I don’t remember having those good of prices in such big numbers with the old clearance sales. Those prices stay after Friday, it is just that the customer has more choices in color and sizes if he or she comes on that first day. No, JCP doesn’t do the coupon thing anymore (they did their research and they knew how many sales they had and how many customers repeated their business with the store using coupons) but if they do reward their loyal customers by giving points for using either their JCP card or signing up one or more of their other cards. It doesn’t take much to earn a $10 rewards coupon to use on buying merchandise. I see where customers who have their rewards cards also have birthday $15 coupons to use. The customers that have surprised me the most with their comments – the teenagers that are spending their own money when buying. They have made very favorable comments about the prices and about liking the new ads. So, no one can please every one all the time, but as someone who works there, I am sold on the changes. I think the changes coming are going to be even more fun for customers. I hope you give the store a chance because these new guys don’t make changes lightly and I trust they know what they are doing. If customers around here can learn to love these changes (very conservative area), then I am sure this is going to work. Thanks for listening! And thanks for the explanation in the first post. You explained it well.
Hi Moe, thanks so much for leaving such an awesome comment!!
Your insight on these changes is great and much appreciated! I had no idea that they adjusted the height of their racks and concentrated on keeping a few shirts in each size, and spaced out the racks as well. That change alone is really nice
I for one love the new ads, they’re not quite so in your face “salesy” but instead the merch is better laid out and looks nicer and more professional looking. They make JCP seem more “expensive” like Macy’s or Von Maur, but they’re still competitive with Kohls. That’s a great marketing strategy in itself!
As someone who has 14 years with JCP, I’ll trust your opinion with this new strategy- you seem to know your stuff! Change is hard and confusing sometimes, I think once people get used to the new system they’ll like it. It sounds like your customers do, so eventually others will too!
Thanks for stopping by and bringing your experience and insight to the comment section, Mo. I really appreciate it
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