JCPenney just made its most desperate move in history to win back customers
A new marketing scheme called "Get Your Penney's worth" promotes heavy discounts, going as low as one literal penny, The Dallas Morning News reports.
The Dallas Morning News notes the fine details of this wild promotion: Some items will be one penny after purchasing something else, but others items will be a penny regardless.
"We're going to do it with items we're proud of," Mary Beth West, JCPenney's chief customer and marketing officer, said to The Dallas Morning News, citing the Arizona brand.
But these strategies, which on the surface appear to be last-ditch efforts, are actually part of a larger, well-thought-out turnaround plan implemented by new CEO Marvin Ellison.
According to Phil Wahba of Fortune, Ellison has outlined three specific ways to revive JCPenney:
- Find ways to get shoppers to spend more: Fortune points to"[managing] inventory better" and "[giving customers more reasons to stay in the store." West also told The Dallas Morning News that the company is "doing the equivalent of an Oreo display," meaning that styles on sale would be directly behind the mannequins modeling the look, and that the prices would be clear.
- Zeroing in on its house brands: This includes St. John's Bay and Liz Claiborne. Fortune reports that these private brands make up for more than 50% of the store's sales. Fortune highlights a few ways that JCPenney is focusing on these brands, such as adding plus sizes and "big and tall" sections to the mix, as well as speeding up production (a must in the era of fast fashion).
- Building "shopping smarter tech": Fortune reports that JCPenney is giving its app a makeover and improving its website, a clear nod to the shift to shopping online.
"We're not going to sit on our hands and play the same cards we played in the past," Ellison said to Fortune. "We're going to be a modern retailer."
Ellison has acknowledged that the retailer has made mistakes in the past.
At the Women's Wear Daily Apparel & Retail CEO Summit in New York City in October, Ellison highlighted how during the Ron Johnson era, JCPenney had abandoned its target customer - the mid-tier customer, someone who thrives on low prices.
He likened it to a sad high-school romance.
"Let's go back to high school and imagine that you dated the same wonderful girl for three years, and all of a sudden, when the prom is going up, you decide that she's no longer good enough ... so you make a play for the homecoming queen, and the homecoming queen says, 'no thank you,' and so you end up going to the prom stag," he said.
"JCPenney had a customer that loved us, and we said to the customer, 'we don't like you anymore.' We said we like that [other] customer. We made a play for that customer, and that customer said, 'we don't like you very much.'"