Blog. We share our insights and expertise on effectively market your bicycle business.
JC Penney’s Big Marketing Moves
When one of the biggest players in the retail world makes a change, we pay attention.
So when JC Penney recently announced a major change in how it handled its pricing and promotions, we took the time to study the situation to see what we could learn.
In celebration of its 110th anniversary, the department store launched a new strategy that re-imagines the shopping experience and promises to be “fair and square” with customers.
A new pricing system, new store layouts and new brands are all pieces of the store makeover to make it more shopper-friendly.
Penney’s new pricing system drew our attention because it is a radical change from the traditional strategy of higher everyday prices offset with a barrage of deep-sale discounts. The new strategy has three pricing levels differentiated by colored tags; red tags mean everyday prices, white tags indicate month-long value items and blue tags represent items at their best price.
This simplified pricing structure aims to inspire a sense of everyday value for the customer while redirecting the customers away from traditional behaviors: waiting to shop until sales or when coupons arrive in the mail.
Additionally JC Penney’s move away from its traditionally heavy reliance on direct mail postcards featuring coupons caused us to raise an eyebrow.
Instead of sending out numerous direct mail pieces to promote sales, the company will now be mailing a 96-page catalog to millions of households each month featuring the current white-tag values.
We applaud JC Penney for aspects of its strategic change. The new catalogs are beautifully designed and we feel that customers will appreciate having low prices without needing to find coupons.
On the other hand, the move away from coupons and direct mail makes us question how the company will track return on investment? There is no way to track how many people visit the store as a result of the catalog. In a marketing world driven by measureable results this is a controversial move to say the least.
Additionally, the new anti-sale approach is confusing because it offers the monthly value prices and blue best-sale prices. It feels like the sale and clearance prices, but with different terms to describe them. Will Penney’s customers appreciate the fresh new approach or tune out the marketing semantics?
Penney’s is taking a risk by making several drastic changes at once, but we applaud their willingness to make these bold new moves.
We will pay close attention to customer response as the year progresses and apply relevant results to our ongoing effort to keep our clients at the leading edge of the retail world.
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