A Penney’s saved is a penny earned

ba_apennysaved jcp’s initial steps towards a fresh store experience, circa February 2012. In the months since the February 2012 relaunch of jcp, it’s been hard for the classic American brand to get a break. As sales have plummeted, media has been increasingly critical and financial markets have answered with sharp declines in the company’s stock price and value. With the intention of eliminating the gimmicks, confusion, and unpredictability of sales and coupons, jcp cut their frequent promotional and sale events and established a three tier pricing strategy. As a baseline, all products were priced about 40% lower than their pre-sale price the year before. Next, they offered additional savings through timely, lifestyle specific monthly events. And finally, they effectively offered “clearance” sales at each season’s end, when excess inventory still crowded the shelves. jcp named these price categories: “everyday,” “month long-values,” and “best price.” So where’s the rub? First, jcp’s customers, as most everyone, love a deal. Americans, through years of retail practices, have become addicted to what has become the shameful norm: coupons and artificial sales. Further, customers didn’t understand the new pricing language and weren’t clear how the new pricing worked. So customers migrated to those retailers that “spoke their language”: SALE. ba_pennysaved_1 ba_pennysaved_2Ikea and Target customers flock to the retailers not because of sales, but because their prices are fair to begin with. What’s done is done, and the future will bring what it will bring. But to play the devils advocate in defense of jcp, look at both Target and IKEA. Both brands offer stylish products with good design at outstanding values. Never have I heard of anyone—including me—being motivated to patronize either of those brands based on a sale. That’s because customers know and expect that the prices offered at those two retailers are fair to begin with. Target surely must have faced its own challenges when it shifted from a typical discount retailer to “Tarzhay.” But the big lesson there is that with great products, a truly enhanced shopping experience, and compelling communications, Target was able to attract an entirely new customer audience. That, in my opinion, is the true hope for jcp. Get new customers who’ve never even considered the brand to experience the ever-growing array of superior products from the likes of Nanette Lapour and Jonathan Adler. And further down the road, one would expect the man responsible for developing the Apple retail experience will likely bring the same fresh, innovative thinking towards an enhanced store experience for jcp customers.