Since the retail chain’s beginnings in 1902, J.C. Penney has been a go-to department store for the middle-class American in search of discount merchandise. In recent years the retailer’s sales have lagged due to the economic downturn and failure to appeal to a younger crowd. Now, the company is revamping every aspect of its business in the hope of creating a cool and hip new image.
The company, which now goes by jcpenney, began the four-year transformation on Feb. 1 with the launch of its new logo, a simpler approach to pricing, and a new promotional strategy.
“Our goal is to be America’s favorite store,” jcpenney Corporate Communications Senior Manager, Kate Coultas said in a recent interview.
At the head of jcpenney’s revamp is its new CEO Ron Johnson, Apple’s former senior vice president of retail and the man responsible for Target’s cheap, chic image.
But some shoppers may not be convinced. SMU senior Skylar Kelsven saw one of jcpenney’s new commercials and was confused by the message. The psychology major is still not convinced that she would shop there.
“I feel like they’ll end up failing the same way Foley’s failed because they’re unable to produce a marketable image,” Kelsven said.
Many may remember the Houston-based department store, Foley’s. Like jcpenney, Foley’s attempted to revitalize its brand in the 1990s but failed. The retailer, once known as the “store of tomorrow,” was eventually phased out and rebranded in 2006 as Macy’s.
Today, it takes big discounts to get shoppers to buy, according to retail experts. jcpenney says its new “fair and square” pricing strategy will allow customers to get discounts when it’s convenient for them, rather than the other way around. The intent: to reassure consumers that they can trust jcpenney’s prices every day. All merchandise will always be marked down by at least 40 percent, compared with average prices at other retailers.
Last year, jcpenney had 600 unique promotions going on. Moving forward, there will only be 12 promotional events each year, one a month. By stopping heavy discounts, the company believes that it will be able to distinguish itself from other department stores.
In the past, shoppers have complained that they miss out on sales because they forget about them or just do not have time to shop. The company hopes that its new promotional strategy will resolve this issue. The store’s new “Enough Is Enough” advertising campaign promotes a simpler shopping experience, which includes fewer sales.
“Customers are sick of retailers making them jump through hoops every time they come to a store,” Coultas said.
Although jcpenney officials say they are confident in their month-to-month strategy, others have doubts.
Edward Fox, assistant professor of marketing at SMU’s Cox School of Business, is an expert when it comes to retail marketing, consumer shopping behavior and shopper loyalty. He said that unlike the company’s former weekly promotions, month-long promotions will not motivate shoppers to come into the store frequently.
“I think that it’s going to be difficult for them to pull this off,” Fox said. “Why do people go into stores? Because there are new products that they want to take a look at or they’re interested in finding a deal, something new. By taking away the deal motivation, at least on a frequent basis, I’m concerned that jcpenney’s core customers won’t shop as frequently.”
jcpenney’s physical appearance will still be a limiting factor.
There are more than 1,100 stores throughout the U.S. and Puerto Rico, including five locations in the Dallas area. More than 60 percent were built in the 1980s or earlier. In order to create a clean and inviting shopping environment inside, the department store will have 70 percent less signage and items will be identified by a certain color price tag. The stores will also have an entirely new layout as part of the company’s effort to transform the jcpenney shopping experience.
Coultas said that the Apple store experience is about customers coming into the store, having a great encounter and learning how to use the products. That is what officials want to achieve with jcpenney. The center of the department store will feature an area called “Town Square,” similar to Johnson’s Genius Bar at Apple. This area will bring back department store services for customers to use while they shop.
Instead of the usual cluttered layout of racks, the entire store will be divided into a series of brand shops referred to as “Main Street.” Come August, jcpenney will start adding two to three shops a month to stores through 2015. Eventually, stores will have about 80 to 100 branded shops. Among some of the new brands are Martha Stewart and L’amour Nanette lepore, a new juniors brand. Store merchandise will also be rearranged monthly. Each month will have a different color and presentation to promote sales. For instance, the color during February was hot pink.
Former SMU student, 21-year-old Carson Eisenhart, lives for fashion. Ask him about any aspect of the industry and he will spit out an opinion. Eisenhart believes that jcpenney’s overhaul will only make the store even more of a middle-income destination. He said the company’s new low-pricing strategy will give shoppers the impression that it’s a discount store similar to Marshall’s or T.J. Maxx. That will not help the company compete with higher-end department stores like Nordstrom.
“I think that will hurt the brand in the long term,” Eisenhart said.
The new jcpenney brand identity includes a new logo; a new monthly catalog distributed to 14 million customers; and a new brand partner, talk show host and comedienne Ellen DeGeneres.
The company’s goal is communicated by its new square-shaped logo, which is meant to evoke the American flag and the company’s principle of treating customers “fair and square.” Instead of coupons and big sale signs, the company’s colorful new catalog will showcase all of jcpenney’s offerings for the month. The retailer believes that DeGeneres is the perfect candidate for the job because she shares the same values as the company.
Not everyone approves of the company’s decision to hire the openly gay celebrity as its new spokesperson. The conservative group One Million Moms recently protested the move, saying the company should replace DeGeneres. Despite the protests, jcpenney is standing by its partnership.
“We think she’s going to be an amazing spokesperson to tell our story, especially our Fair and Square strategy. She’s about value and integrity,” Coultas said.
For more information visit www.jcpmediaroom.com or the store’s retail website, www.jcpenney.com.
(Photo Courtesy of jcpenney )
