J C Penney Department Store
January 25, 2012 by staff
J C Penney Department Store, JC Penney is ripping up the marketing playbook and starting fresh. Over the course of a two-hour presentation on Manhattan’s West Side today, JC Penney CEO Ron Johnson and President Michael Francis outlined a series of major changes across all aspects of the department store’s pricing, promotion, presentation and products. Changes will be unveiled to consumers on Feb. 1.
Among the items: The retailer introduced a new logo as well as a new spokeswoman, Ellen DeGeneres, who joined the proceedings via a recorded comedic video. Martha Stewart was there in the flesh to discuss her partnership with the retailer. A new line from designer Nanette Lepore was announced. And Mr. Johnson teased attendees with a brief discussion of a new JC Penney prototype to launch in 2014 and “heavily informed” by his alma mater, Apple . It was an impressive spectacle.
“Just like Apple , we’re going to learn that the best days aren’t in the rear-view mirror, they’re right down the road,” Mr. Johnson said, noting JC Penney is 110 this year. “I believe the department store is the No. 1 opportunity in American retail. And this isn’t something I decided last June when I took the job. This is something I decided 10, 15 years ago.”
Mr. Johnson told the crowd that during his time working in retail at Apple he would often visit malls to assess possible Apple store locations. His team always parked at the department stores, he said, because there “weren’t any cars.” He then flashed on the screen a picture of the Minnesota-area Dayton’s store he grew up visiting and waxed eloquent about restoring integrity to the department-store concept.
Shoppers can expect lower pricing on the first and third Fridays of every month.
The first significant change will be embracing a new pricing strategy, consisting of “fair and square” pricing. It includes three types: everyday, regular prices; monthlong values; and best prices, on the first and third Fridays of every month. To determine new prices across its product range, Mr. Johnson said that the retailer looked at what it was charging and what customers most often paid after numerous discounts. He found that only one in 500 items sold at full price, while 72% of revenue was derived from selling products at 50% off or more.
For example, a T-shirt that had retailed for $14 but typically sold for closer to $6 will now be priced at $7. In a month when it’s a featured product, it will cost $6. When it’s time to clear it out and change colors, it will cost $4. The retailer is also embracing flat prices, no more 50- or 99-cent add-ons.
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