Grafik Blog JCPenney: For Love of a Bargain image

For Love Of A Bargain

“The new JCPenney is an injustice to middle America. The stores look like they are going out of business. Their most notable product lines have vanished, and the walls, shelves, and racks are depleted, stark, and sterile. Survey your customers and respond to their feedback. The board of directors needs to wake up. New is less and the old is more!” —Kathy of Maryland on February 4, 2013

Poor Ron Johnson, CEO of JCPenney. He is getting his pay cut for not being able to transform the JCPenney brand from a lackluster player to a Target-like phenome. And it has not been for lack of trying. First, there were three new logos in three years, all met with a certain amount of indifference. There was a new brand statement: Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated—fair and square. (One of the new logos is a square that clumsily alludes to Fair and Square.) There were the new stark interiors and new mobile checkout units instead of cash registers. And most importantly there was a new pricing strategy—the launch of the new Fair and Square deals—no sales, no haggling, no coupons, no weekend specials. Trouble is, that their customer base really liked shopping for sales, and really liked bargain hunting.

JCPenney Logos
JCPenney has experimented with various different logos over the past several years.

By August 2012, according to Bloomberg Business, “Same-store traffic and sales fell dramatically for a second quarter, indicating—not surprisingly—that JCPenney ’s strategy misfired.” Ron Johnson’s answer was, “While we have work to do to educate the customer on our pricing strategy and to drive more traffic to our stores, we are confident in our vision to become America’s favorite store.” Well, it seems that loyal  JCPenney clients were not happy with the new changes. A selection of comments from Consumer Affairs show how angry their customer base is.

“Big CEO person, change it back! Your way is not working. Everybody I know who used to shop there complain about the selection and how much they hate it! We want our old JCPenney back! I am sure your higher ups have to see a drastic decrease in sales since your new buyer personnel has come on board. Change it back!”

“Yet, the majority of us who used to shop there have no products to choose from. Your large women department is a joke. My husband can’t find the brand of pants he used to buy in your store. Your linen department got rid of American Eagle and sold a substandard Penney’s brand now. There are more employees than shoppers. I have money and I plan on spending it, just not in your store. You have become the Kmart of retail stores.”

“I am (was) a loyal JC Penney customer. I am 54 and ex-New Yorker who spent zillion hours shopping in my life while always hunting for a good sale, a good sale, which is something you took away! Why did you allow this to happen? Why did you stop the fun sales? You allowed this non-retail person to end fashionable and affordable lines for ladies (who are not 15 and a size 0).”

Brand, know thy target. JCPenney’s loyal customer base is not the teeny bopper set. It is generally older, with some disposal income, used to shopping sales, and comfortable with many of the once familiar brands the store used to stock. With the new move towards a younger demographic, older JCPenney brand loyalists feel disenfranchised and they are vowing not to return to the brand. And new partnerships with designer brands like Michael Graves, Martha Stewart, and Jonathan Adler are too much like a Target-wannabe for my tastes.

One of JCPenney's New Bag Designs JCPenney launched a new brand identity last year, introducing different product mixes, a new pricing strategy, and re-inventing their in-store experience with everything from signage to displays.

Solid brands form lasting impressions—and whether you are a JCP devotee or not, it is almost impossible to do a remake of an old brand overnight. Changing product mixes, developing a new pricing strategy, AND not allowing the customer base to adapt to it, learn about it, weigh in, is not wise. If in-depth research was not commissioned before the JCP remake, then the CEO and his marketing team should be fired. If focus groups were not asked about the new interiors, then the negative backlash the company is experiencing should come as no surprise. One has to wonder, if indeed Ron Johnson wanted to recast a retail environment for a completely different demographic, should he have lost the JCP brand entirely and launched a completely new retail brand? And perhaps the biggest takeaway Johnson should learn is that it is one thing to mess with a store brand. It is quite another to mess with a pricing strategy.

Shoppers take pride in their “salesmanship”—their ability to save, to get something for less, their acumen at bargain hunting. Witness the success of Marshalls, T.J.Maxx, and Nordstrom Rack—all based on the love of the hunt for a deal. While JCP is now backpedaling on their fair and square deals, it will take a lot more to get shoppers back into the doors of this retailer.

JCPenney Store
JCPenney implemented a month-by-month, shop-by-shop strategy to update all stores with new merchandise and presentation.

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