Gut Check
After JCPenney executives laid out their vision for transforming the store and before they held a special session for the financial community the following day, the company invited analysts to submit questions in advance.
The most asked question: How far will sales volume have to fall before you scrap the streamlined pricing and go back to promotions and coupons?
There was a reason analysts posed the question. They'd seen this movie before.
Ironically, the last major retailer to announce a simpler pricing structure and a pivot away from couponing and heavy promotions was Macy's, which is now suing Martha Stewart Living Omnimedia for forging a deal with JCP.
Macy's was never able to shake the door-busters, one-day sales, and all the rest. But it must be noted it never went all the way through with the attempt. The prices were streamlined, yes. The promotions were never completely eradicated.
Penney, on the other hand, announced a three-tiered pricing strategy on Jan. 25. And on Feb. 1 it was a reality.
My highly non-scientific conversations with female family and friends since suggests Penney has a whole lotta 'splainin' to do before this new approach sinks in. Granted, the ladies I queried are, variously, Macy's, Kohl's or specialty store shoppers.
They have all seen the commercials. They didn't get what was going on. And by the way, they all hated the "scream" ad that preceded the new pricing launch.
JCPenney ceo Ron Johnson, the force behind the development of Apple retail stores, emphasized during the vision presentation that Apple was not always as sexy, profitable and seemingly invitable as it is today. And he trotted out the financials to prove the case.
He also explained repeatedly that Penney is building for the long term. Which is why, no doubt, it immediately ceased releasing monthly sales figures and announced that it will provide earnings guidance on an annual basis only.
So the outside world will have to gauge the impact of these changes one quarter at a time. But Penney insiders will know they day-to-day results of the new policy. Can they stay the course?
By the way, Johnson's answer to the question about at what point JCP will renege on the new sales strategy was: "We won't."
Jess commented:
Barbara these sound like a great idea. I hadn't heard of them before but it's a great name they've csoehn. I think I might check these out. We do have to pay tax on purchases from the states but the exchange rate makes it favourable to do so.In fact, I've barely bought any clothes over the last year because I bought heaps last time I was in Florida. I got jeans, trainers (I think you call them sneakers), pants etc for a fraction of the price we would pay here.
Guwalaw commented:
I find hints work well, too, and I use Amazon's wish list with a note bdeise the item indicating where it can be purchased locally, when possible. Lots of info on your blog, I'm going to have to tune in more often! Looks like you had fun in Walker; suppose a post from that wknd. will be upcoming?
Ron Larson commented:
It is always clear when retailers run out of creative ideas and interest in bringing their customers what they truly want.......they drop their prices. Wasn't it James Cash Penney who said,"long after a customer forgets what they payed for a product, they remember where they bought it". Anyone ask Stanley Marcus about pricing? It will be interesting who will be in the next Penney management team?
