J.C. Penney’s roller coaster ride of three P's–prices, policies and procedures—can serve as a valuable lesson to sales managers and sales VP's nationwide. The giant retailer plans to shake things up through 2015.
For starters, the retail giant will no longer have coupons. It also changed its pricing strategy and re-aligned its return policy. There’s even a new spokesperson: Ellen DeGeneres. (Even if she's not a favorite with some conservative groups.)
A closer look at J.C. Penney’s (JCP) pricing strategy reveals a trend toward simplification. Monthly deals and “best” prices on select products, initially intended to simplify shopping strategies, have been replaced by everyday prices and clearance merchandise. “Clearance Fridays” put many items on lowest markdown and are designed to make room for new products. “We’re really focused on making it simple for the customer,” said Kate Coultas, a JCP spokeswoman.
While coupons are history, JCP cardmembers are now automatically enrolled in the JCP rewards program. Non-cardmembers can register up to three credit or debit cards, including a JCP card, when they join the program. Members who spend $100 per month on qualifying purchases get a $10 reward certificate they can use the following month. Gold card members can earn up to two rewards for spending $200 per month, and platinum card members can earn up to three rewards for spending $300 per month.
JCP has also revamped its internal store layouts. Aisles are wider and racks now have fewer items for easier browsing. The retailer has also added what it calls its “Shops"—branded areas in the store for boosting sales on such items as MNG by Mango, Levi’s (for men and women), Arizona (for juniors and young men), jeans by Buffalo, Liz Claiborne, Izod and jcp (for men and women), even Sephora is under consideration. “Sephora has been discussed and is a possibility,” said Denise Gordon, Valley View store leader.
Some specialty areas like housewares, lingerie, shoes and children’s apparel won’t fall under the Shops concept. JCP hopes its Shops will create less of a department-store feel and more of a stylish collection of shops, each tailored to the unique tastes and preferences of individual shoppers. JCP expects to have 40 Shops in stores nationwide by the end of 2013 and 100 by the close of 2015.
JCP will also be reinstating its popular Salon Shop promotion, which offers free haircuts for kids in kindergarten through sixth grade each Sunday. The Salon Shop had previously offerred free cuts to breast cancer survivors in honor of Breast Cancer Awareness Month. JCP hopes free haircuts and new internal geography will turn things around.
The retailer could certainly use some upbeat news. Forbes recently reported that sales dropped 21.3 percent in the first six months of 2012. Ron Johnson, chief executive officer of JCP, is thinking positive. Johnson says, “It’s really hard to transform things. It isn’t always fun. But that’s what we’re going to do. I’ve seen this movie and I’m really excited to see how this one plays out.”
As a retail manager or VP, how these changes affect JCP sales can serve as a guide to any promotional efforts and store revamping you may be considering.
Photo courtesy of Wikipedia.org
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