People Like Sales
The Wall Street Journal is reporting that J.C. Penney is backpedaling on its non-promotional stance with plans to add more Friday sale days throughout the year. This, of course, comes as the retailer reported an awful first quarter: a loss of $163 million (versus year ago profits of $64 million) and a sales decline of 20%.
It’s too early to say that J.C. Penney’s new strategy isn’t working—innovative approaches take time and often a quarter-by-quarter-CNBC measure of success/failure is too microscopic and dramatic. Brands and organizations are about the long term. But, obviously, short term success is a requirement so in a few more quarters we will indeed have a good sense of JCP’s new approach.
Their new pricing strategy exists in three tiers—everyday prices, monthlong values, best prices—and trims the brand’s promotions from 590 to only 12. Regardless of success/failure, it’s impossible not to admire the idea and willpower to take the road they did.
What isn’t too early to say, however, is that shoppers like to buy. And part of buying is discovering a great deal. You know, like finding that special thing on a huge sale, or gathering coupons that map out the shopping journey—online or offline. We all like that. Whether we’re buying fishing tackle, baby clothes or Tide.
Ad Age reported that JCP hasn’t fully explained their pricing strategy. I dunno. Personally, I don’t think they’ve explained it long enough. We have a lot of brands to pay attention to. The world doesn’t study in detail what JCP does. To think a majority of shoppers could understand it by the end of “Q1” is wishful at best.
Store spending activity at JCP tells an interesting story too; conversion and average customer spending both fell 5%, inferring that without coupons and sales it’s harder to close the deal.
The new brand is definitely alluring. If you’ve been in a JCP recently you know what I mean. There’s nice stuff in there, presented well. But when it comes to general merchandise shoppers really like immediate reasons to buy because that’s a huge part of the fun of shopping… Picking up that thing that was on that amazing sale which you happened to discover.
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