Trying to figure out what’s on sale when and then waiting for the next sale to buy particular items can be frustrating to consumers so J.C. Penney Co. — in its first major overhaul of its retail arm since former Apple exec Ron Johnson took over as CEO in November — is attempting to make things much easier.
The company this week announced that its stores are doing away with having seven kazillion different items on different sales simultaneously and just “marking down all of its merchandise by at least 40% so shoppers will no longer have to wait for a sale to get the lowest prices in its stores.”
The move, including the repositioning commercial above, comes as jcpenney, as the chain rebranded itself at the 2011 Oscars, is re-rebranding with a new logo — following the previous year's rebrand at the 2010 Oscars (check out the logo progression below). What was that about trying to avoid consumer confusion?
So why is it rebranding for the third time in as many years? During the 2011 Oscars broadcast on ABC, it kicked off a campaign promoting "jcp" in a red square logo. At the Oscars a year earlier, the brand refresh was all about "JCPenney" offering more exclusive lines to not only expand its customer base but boost loyalty and get its current ones to visit more often.
So here we are with 2012's repositioning. The retailer, which just announced that it will cut thousands of jobs across its 1,200 American locations in a cost-cutting measure, is introducing three tiers of pricing in a permanent markdowns, anti-sales mentality move that kicks off February 1st.
The new pricing philosophy: general everyday low pricing will be otherwise known as “Fair and Square Pricing.” Additionally, there will be “Monthly Value” discounts on some items (sounds like a sale to us) and “Best Price,” indicating items marked for clearance on the first and third Fridays of the month (otherwise known to many in the American workforce as "payday").
"The big question on investors' minds will be how customers react to a single price point versus a perceived discount under the old strategy," says Citi Investment Research analyst Deborah L. Weinswig, the AP notes.
"The department store is the number one opportunity in retail today,” Johnson said in a company release. “We are going to rethink every aspect of our business, boldly pursue change, and create long-term shareholder value, as we become America's favorite store. Every initiative we pursue will be guided by our core value to treat customers as we would like to be treated — fair and square.”
Penney’s has also gotten some press in the past month for creating a dustup with rival Macy’s after it put a bunch of cash into Martha Stewart Living Omnimedia and announced that it would sell some of MSLO’s branded products, which has been solely Macy’s department for a few years now. The announcement led to Macy’s telling Martha it would see her in court. (Stewart isn't just seeing her new partnership with jcpenney challenged, but recently saw Hallmark Channel cancel her daytime TV show to replace her with Marie Osmond).
Other partnerships that J.C. Penney has announced with its new look and positioning include tapping Ellen DeGeneres as a brand ambassador. As a press release notes, "Ellen began her career in her teens as a jcpenney associate and now, as one of the country's most beloved television personalities, she will help bring the new jcpenney experience to life in her own fun-loving, sneaker-wearing, laugh-making way."
Additionally, fashion designer Nanette Lepore has created an exclusive line with the retailer.
As for JCP's patriotic new logo, which bears a vague resemblance to Gap's 2010 scrapped logo with its corner-hugging blue square, it's explained as follows:
• The new jcpenney logo, which combines the elements that have made jcpenney an enduring American brand, by evoking the nation's flag and jcpenney's commitment to treating customers Fair and Square. The square frame imagery will be evident throughout all of jcpenney's marketing, to remind customers to frame the things they love.
• New brand marketing to showcase great product in an exciting new way, to solidify jcpenney's relationship with its loyal customers and entice new ones. This includes the new monthly book, beginning next month, that millions of Americans will receive, which includes 96 pages of highlights for that month, as well as an entirely new look for jcpenney stores in terms of signage and presentation.
Company president Michael Francis explains the 2012 brand relaunch:
"We are redefining the jcpenney brand so we become a store for all Americans, by offering an experience they cannot get anywhere else. This will start by freeing consumers from the barrage of promotions and undifferentiated shopping experiences they have become used to and replacing it with something entirely fresh and new that is evident in every aspect of our store – new brands, new marketing, unique attractions, and much more. Beginning on February 1, our customers will see immediate changes that give a sense of how we will transform jcpenney over the next four years. It will be a breath of much-needed fresh air and give them reasons to visit jcpenney more often than ever before. Our objective is to make our customers love to shop again and across jcpenney, we're very excited about the changes to come."
The company will begin the transformation of the jcpenney shopping experience on February 1, with the implementation of its new logo, pricing strategy and "monthly cadence," including new in-store signage reflecting true price clarity as well as edited merchandise assortments for the monthly store set.
Beginning in August, jcpenney will begin a month-by-month, shop-by-shop strategy to update all stores with new and exciting merchandise and presentation. Two to three shops will be installed monthly, each and every month, over a four-year transformation period, including the debut of Town Square during 2013. These initiatives will culminate in the complete transformation of jcpenney by the end of 2015.
The company also outlined $900 million of cuts at day two of its presentation to analysts in New York, on Thursday, the financial objectives and funding for the new strategy, including in-store boutiques: "As we transform the business model, our teams are committed to improving sales productivity in our stores, generating 40 percent or better gross margins, while lowering expenses to industry-leading levels. Taken together, this creates a formula for long term, sustainable profit growth."
Its press release on the financial component of its transformation also noted:
Beginning in August 2012, jcpenney will begin a month-by-month, shop-by-shop strategy to update its stores with new and exciting merchandise and in-store presentations. Two to three shops will be installed each and every month, over the four-year transformational period. Kramer reiterated the expectation that jcpenney's transformation would be complete by the end of 2015. Commenting on the Company's plans to self-fund its transformation, Mr. Johnson noted, "We are fundamentally re-imagining every aspect of our business and we fully expect the bold and strategic changes we are making to our operations will result in improved profitability. This should enable us to fund the transformation of jcpenney's store experience, while at the same time returning value to shareholders with steady earnings growth."
Long story short: It's a new year, and a new JCPenney. What do you think of it all? Post a comment below!