When you go to the shopping mall, there are a few things you can still expect to see: mall cops on super attractive segways, kiosks with unusual products, food courts, pretzel stands, and JCPenney’s. At least that’s how it used to be.
Nowadays, JCPenney is struggling to compete in this fast-paced marketplace. People are turning to newer, bolder brands and leaving department stores in the dust. As a result, JCPenney is starting to cut jobs and has even eliminated the position of their Chief Merchandising Officer. In an attempt to stay relevant with customers, the store has tried many different business tactics, including new logos and pricing strategies.
Check out this video from Business Insider about JCPenney’s declining sales:
While they may not be in the prime of their branding, let’s not forget that in their heyday JCPenney was a leader, with an authentic, approachable strategy to their pricing game. It was about respecting every customer’s wallet and making sure to be fair and honest.
JCPenney’s Questionable, Yet Noble Pricing
To try to appeal to customers, JCPenney did a complete overhaul of their pricing strategy. The idea was to keep it super simple and make sure customers understood exactly how much they were spending. These were the five changes they made to their pricing.
1. “Every Day” prices.
Their plan was to use the previous year’s sales data to mark down prices on all of their merchandise, by at least 40 percent or lower. Example: a Liz Claiborne purse regularly priced at $50 could have an “Every Day” price of $25. On top of this discount, JCPenney also offered exclusive coupons on their merchandise that could be found online at the time of purchase. This made it easy for a customer to save big, and ultimately, buy additional products.
2. Easier pricing.
As you noticed in point #1 above, JCPenney used whole figures when pricing their merchandise. Goodbye to jeans for $19.99 and hello to jeans for an even $19 or $20 instead. Most people already round up, but why pretend like the price is any lower? That’s deceptive pricing at its finest! JCPenney’s pricing made it easier to figure out a rough estimate of what your total was going to be when you got to the register.
3. Easy-to-decipher tags.
Many people shop way more often than they really should. We all want to save money, but it’s still super annoying when retailers mark down their merchandise with stickers. The “final” price is often in limbo and sometimes the stickers even fall or get ripped off. When something was discounted at JCPenney, it got a whole new tag! A red tag showed an “Every Day” price, a white tag was a “Month-Long Value”, and a blue tag showed the “Best Price.” One tag per item.
4. Strategic sales days.
A red “Every Day” price tag is just that — the everyday price. The “Month-Long Value” white tag showed what was on sale for that entire month, not just for the next 6 hours, the day, the weekend…but for the whole entire month. The stuff that didn’t sell had a blue “Best Price” tag put on it; these items were on sale on the first and third Friday of every month, conveniently at the same time that most people got paid from their jobs.
5.Fair and square pricing.
JCPenney tried to cut back the number of sales, and instead offered customers a flat rate that they deemed was the “best price” for the item. This relied on the customer’s trust with the JCPenney brand since they were being given a fair price for their merchandise. It was a risky maneuver, but it had the love behind it that JCPenney intended. The goal was to not seem like they were trying to pull a fast one on their customers.
New Logo, Same Old JCPenney
Of course, one of the best ways to switch things up is through rebranding, whether that comes from a new logo or maybe a completely new brand personality. The JCPenney logo* has changed many times over the years, but they didn’t go too far off the beaten path.
JCPenney mistakenly thought reverting back to their original logo would work. However, it was about completely going for broke and taking risks in their growth as a company. It’s possible to teach an old dog new tricks if the dog is open and willing to try!
What Your Business Can Learn from JCPenney
The road to a very dark, fiery place is paved with good intentions. Even though JCPenney tried to come through with a fair pricing strategy and new logos, their efforts ended up backfiring. In 2017, 138 JCPenney stores were closed, which is 14% of their locations*.
Former Apple executive Ron Johnson became JCPenney’s CEO in the fall of 2011. Seventeen months later, he was out of a job. The basic reasons behind his departure were summed up by Time Magazine as: 1) he didn’t listen to what the customers wanted, 2) he didn’t test his ideas in advance, 3) he alienated core customers, 4) he didn’t understand the JCPenney brand, and 5) he didn’t like JCPenney. All in all, it was a recipe for disaster.
Don’t make the same mistakes when it comes to your business. Pay attention to the times and change your branding strategy in accordance to what people want. Furthermore, make sure you understand who you are and stick to your core values.
*Money Insider. (2017, May 19). JCPenney Hits a New Low. Retrieved April 19, 2018, from https://www.youtube.com/watch?v=6YwDTOAc01Q
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