J.C. Penny’s branding revamp comes during an interesting time in the industry, considering the oversaturation of deals and couponing. Former Apple executive Ron Johnson, started implementing some major changes once he became Penney’s CEO in November. Starting with Wal-Mart’s iconic everyday low pricing strategy, without focusing on undercutting competitors, but rather offering their customers more predictable pricing.
Their pricing strategy includes: Sale prices become everyday prices, Fewer Seasonal Sales, New Tags to indicate pricing accordingly, Pricing without the 99 cents for simpler pricing, New Advertising that includes digital strategies.
These digital strategies are going through the testing stages from their catalogs, as they are utilizing QR codes as well as text messaging to purchase specific items to feel out the demand for additional implementation of technology.
Increased discounting has been a vicious cycle that feeds into shoppers’ insatiable appetite for bigger and better discounts. At JCP, the regular price on an item that costs $10 to make rose 43 percent, from $28 in 2002 to $40 in 2011. But because of all of its sales and other promotions, what it actually ended up selling for rose only 15 cents, from $15.80 to $15.95 during that same period.
This concept has been attempted multiple times by other companies, including Macy’s, where they cut back a few years ago on coupons and discounts, but their strategy was unsuccessful and they were forced to ramp back up after seeing sales suffer.
As families are struggling financially, this could be a positive rebranding for the company, to recognize the climate and restructure accordingly.
Dalia Strum teaches SXF 120: Blogging Smarts for Business.