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JCPenney Marketing Must Focus On Product


As JCPenney CEO Ron Johnson announced 1Q results this week it was easy pickings for the “I told you so” crowd of pundits. Sales in the first quarter missed plan by 15%.

As a result shares plunged nearly 20 percent on Wednesday, their worst decline ever, wiping away $1.43 billion in market value a day after the retailer shocked Wall Street with a much worse-than-expected drop in sales and by scrapping its dividend.

Coupon cutting shoppers have been turned off by the company’s new pricing strategy which is fair-priced based.

Oddly enough many consumers prefer the perception of saving to actual saving. Products at competitors like Kohl’s or Macy’s are marked up an additional 20% to 50% to support discounts of 20% to 50%. JCPenney is attempting to wean it customers from the “coupon drug” as Johnson called it.

A clear path to winning back its coupon-cutting customers and boosting sales is to shift the emphasis of the marketing strategy from positioning the brand to selling the product. Sounds simple and it can be – but it may be difficult if the Targetesque marketing strategy continues to drive the bus.

Even the Mother’s Day newspaper insert which featured women with their Mom’s and sometimes children while interesting completely missed the mark. There was even one spread featuring a lesbian couple (see image above) that caused some flap but I don’t think that’s why this didn’t work. Here’s why:

  • Too Much Space That’s Not Productive – full 2-page spreads showing non-model women is a waste of space. Those exact same images and stories could have just as effectively occupied 1/3 of a single page, leaving ample room to sell the product the women were modeling.
  • Understated Product Identification and Pricing – tucked away in tiny font in colors that made the font even harder to see was the product identification and price. Yikes! If you’re trying to sell product that’s a great value it’s best not to hide the price at the bottom of the page.
  • The Stories Were Lost On Shoppers – granted this is a survey of one, but when I showed my wife the Mother’s Day insert I asked if she like the idea of the stories about women and their mothers. The answer? “What stories?”. When scanning inserts consumers look for the style the like and the price.

JCPenney does not need to scrap its pricing strategy. Instead it should be communicating product attributes, benefits and virtues…even going so far as to create the perception that JCPenney’s products exist at the intersection of quality and value. Highlight the construction of a dress, the craftsmanship of a handbag or performance of a swimsuit – then connect a great price to that product. Feature the merchants who are charged with globe-trotting sourcing and negotiating the best price on every product JCPenney sells.

This is not rocket-science…but JCPenney cannot continue its current marketing tact.


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