JCPenney’s New Pricing Strategy: 5 Things You Should Know
UPDATE: JCPenney switched back to a similar version of their old logo in 2013 after the company’s attempt at re-branding failed. After failing to deliver the improved retail experience and sales customers were promised, the revamp attempt is considered one of the worst performances in retail history. As of now, their 2012 CEO Ron Johnson (the man behind the re-brand) is no longer working for JCPenney, and the store has returned to their previous business practices.
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!
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 Claiborne purse regularly priced at $49.99 could have an “Every Day” price of $25.
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.
5. New logo and advertising. The JC Penney logo* has changed many times over the years. The idea is to constantly evolve through rebranding, while at the same time maintaining the core colors and shapes that have come to be associated with the department store. Aside from their logo, 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 even served as their spokesperson for awhile, while catalogs were mailed out each month. The point is JC Penney doesn’t stay in one branding lane for too long.
Take a look at all of JC Penney’s logos over the years:
BONUS: The biggest news yet!
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.
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)? 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 logos courtesy of Logopedia. Logo is a registered trademark of JCPenney Company, Inc. All rights reserved.