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JC Penney's Rebranding Fail

Fri Dec 28, 2012 10:01 pm

Penney's must be desperate at this point, even after they changed their logo from a red box then to "JCP" then to a US flag like design, they are still loosing money by the swimming pool load.

As an observer when I go inside Penney's and move beyond the part of the store that can be seen from inside the mall it looks somewhat newish or hip with a line of mannequins and a suspended "picture frame" adorning the mall entries but when I go inside all of these Penney's stores the inside still looks dated and the entire upstairs looks entirely dated, this redesign is more of a facade than anything else. Look at the demo, in my on my observations of stores most of the shoppers are upper middle aged to older women, hardly the hip crowd for a flashy store re-branding I would think. What do you think are the problems?
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EA CO AS
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RE: JC Penney's Rebranding Fail

Fri Dec 28, 2012 11:28 pm

It has been widely reported that JCPenney's biggest failure was moving away from sales and coupon promotions, leading deal-seekers to assume they won't be able to snag good prices there.

http://business.time.com/2012/06/19/...xecutive-departs-amid-sales-slump/

No matter how clear or muddled the marketing message, JCPenney’s message seems to be one that some shoppers don’t want to hear. They like playing games and hunting for deals, and the markdown from the original price is how they keep score. By eliminating coupons and most “sales,” JCPenney has been saying it doesn’t want to play games anymore. That sounds wonderful, but among certain shoppers, it’s the equivalent of grabbing the ball and taking it home. No more games, no more fun—and not much reason to visit JCPenney on a regular basis anymore. If, for the most part, a store’s prices are going to remain the same tomorrow, and next week, and the month after that, there’s not much incentive to browse the aisles for special deals today.

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Flighty
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RE: JC Penney's Rebranding Fail

Fri Dec 28, 2012 11:48 pm

On the micro level, JC Penny got me as a shopper - was totally outside their demographic.

JCP needed to update. Older ladies do not necessarily buy much of anything at all. They already have their clothes and household items. Young ladies do buy a lot. Young men, less, but they do buy things like work clothes.

I am glad they got rid of coupons. It seems tacky and I would never have actually spent time to figure that crap out. Am super impressed with their low-cost efforts to spruce up. So much less clutter. They should be hoping for wedding registrations, people buying work clothes, children's clothes.

When in doubt, JCP should shrink its store count. Get rid of the bottom 10% of stores. That's a good trick. Anyway, JCP has a great network of stores. I hope they make it.

[Edited 2012-12-28 15:59:51]
 
BMI727
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 12:28 am

Quoting EA CO AS (Reply 1):
It has been widely reported that JCPenney's biggest failure was moving away from sales and coupon promotions, leading deal-seekers to assume they won't be able to snag good prices there.

   Go into a Kohl's store and try to find anything that actually costs the original price. You can buy a $20 shirt there, but the tag will say $35.
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 12:36 am

I respect JCP for what they're trying to do and I hope they succeed in the long run.

It seems like Kohls has decided to just add 30%+ to the retail price of all their items and then make them perpetually on sale 30%+ off. In the end they get the price they actually wanted, but make customers feel like they are getting it for less than the actual price. It's this pricing trickery that makes me respect JCP for doing away with it all and just pricing everything low to begin with. Too bad it's not working for them.
 
ltbewr
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 1:50 am

I have been shopping at JC Penney for 30 years for suits, pants, dress and casual shirts and other clothing items. They quality, pricing, ability to find my size in such items, made me a regular customer. This Christmas I spent at least $150 for myself and for gifts for others there. They also did a 'button' promotion that led mainly to $5 on a minimum of $ 5 and like $10 'coupons' in your e-mail box that meant I got some real bargains and more gifts to give. The pricing on some items were definitely competitive with Sears, Macy's and Kohl's as well as Target and Walmart.

One reason for the ending of continuous sales and instead lower base pricing was to reduce labor costs from having to make all those pricing changes. Still Kohl's has an edge with their 'always at a discount' and coupon policies, locations generally smaller than JCP, often in strip malls or smaller malls or even freestanding stores, more convenient and easier to shop in vs JCP in large regional malls. Don't forget that Macy's had had aggressive coupon and sale promotions, seen as just a little better than JCP and has a huge national presence too.

I hope the JCP rebanding doesn't fail, but shoppers are so fickle with their money that they may not make it well into the future unless the make adjustments and reduce the number of units.
 
Ken777
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 2:07 am

Quoting Flighty (Reply 2):
Older ladies do not necessarily buy much of anything at all.

"Older Ladies" are grandmothers with a credit card. Nothing makes a retailer drool more.

Quoting Flighty (Reply 2):
That's a good trick

The problem is often that eliminating that 10% dumps the corporate overhead they pay onto the remaining 90%, making them less profitable.

If a no/low profit store is covering overhead at a greater rate than their "loss" then it is often worth keeping them open.

It might be that JCP needs to improve inventory management, both for basic replenishment merchandise and "slow sellers".

In general terms think JCP is heading in the right direction. The only question is if they can get the job done in time. (We also need to remember that the turn around started in The Great Recession, making the job a lot harder.) I actually hope they make it.
 
MSPNWA
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 3:59 am

I hope JCP makes it. I applaud their new pricing structure because that's the way it should be in my view.

Last time I was there I loved the new low prices with no sales gimmicks. I found a couple nice shirts for 10 or 12 dollars, no fake coupon or door-buster needed. All I would change is to have more inventory to choose from. It was a little thin.
 
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 6:55 am

I think the JCPenney redesign will be a case study in future business textbooks of how not to transform a company. The guy they brought in from Apple has no idea what he is doing regarding bringing foot traffic into his stores; Apple has a desirable and unique product that will drive foot traffic into their stores...JC Penney does not thus it needs eyecatching promotions. The few times I have been in JCPenney the last six months or so, the stores were so empty I could have played roller hockey in the aisles. He has suceeded in alienating JCPenney's traditional customers and completely bombed in attracting new customers and he needs to go....JC Penney will never be hip and cool.


IMHO
 
Type-Rated
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 7:06 am

Last I heard JCP's newest concept is to have the place look like "a store within a store". Have straight aisles and an uncluttered look. The store in The Woodlands, TX has been changed over to the new look.
I haven't bought anything at JCP in that last 20 years. I recently went in there are found I liked some of the merchandise. I bought several pairs of Levi's jeans and Docker pants at a very good price.

Remember when JCPenny used to sell appliances and televisions and stereo's?
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DL_Mech
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 8:30 am

Quoting type-rated (Reply 9):
Remember when JCPenny used to sell appliances and televisions and stereo's?

I collect JCPenney MCS audio gear. Their 3125 is a highly rated receiver at 125 (REAL) watts per channel.

http://images.audioasylum.com/usr/y2012/11/74722/2012-11-15_12-37-37_800.jpg

Made by NEC, it is as beautiful on the inside as it is on the outside.

http://audiofilek.pl/images/com_sobi2/gallery/1672/1672_image_3.jpg
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Maverick623
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 9:02 am

Quoting kngkyle (Reply 4):
It seems like Kohls has decided to just add 30%+ to the retail price of all their items and then make them perpetually on sale 30%+ off.

That's the typical department store gimmick. I can't tell you how many emails I get from the same companies claiming that a certain sale is on it's "Last Day!", only to find the same sale being "Extended!" or a new "Pricing Slash!" the very next day.
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Ken777
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 3:33 pm

Quoting usflyer msp (Reply 8):
The guy they brought in from Apple has no idea what he is doing regarding bringing foot traffic into his stores

Actually he was at Target before Apple so he does know about traditional store retailing.
 
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 9:02 pm

I think JCP management thought they could turn their image into an istore to get a sales boost.
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Flighty
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 9:12 pm

Quoting Ken777 (Reply 6):
The problem is often that eliminating that 10% dumps the corporate overhead they pay onto the remaining 90%, making them less profitable.
Quoting Ken777 (Reply 6):
If a no/low profit store is covering overhead at a greater rate than their "loss" then it is often worth keeping them open.

True - airlines generally make short term planning decisions the same way. If revenue covers variable costs, you keep doing it. If it covers fully allocated costs w/ overhead, then it's a sustainable business.

It's the old argument about can you shrink your way to profitability. In airlines, you sometimes can. Retail, it may be similar or maybe not. They may be constrained by real estate lock-in. Basic truth is, they should operate their business profitably at every store if there is a way to do it. Maybe they alienated people in a mean way. That's unwise.

Quoting Ken777 (Reply 6):
grandmothers with a credit card.

Suppose it makes sense that grandmothers have a lot of power to spend on their extended families. Hmm. Thanks Ken777.
 
usflyer msp
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RE: JC Penney's Rebranding Fail

Sat Dec 29, 2012 11:01 pm

Quoting Ken777 (Reply 12):
Actually he was at Target before Apple so he does know about traditional store retailing.

Target isn't really traditional retailing. Target has staples like frozen pizza, cat food and laundry detergent to draw people into the store. There is nothing at JC Penney that I absolutely have to have in order to live thus there really is no reason for me to go in their stores unless there is a good sale.
 
Okie
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RE: JC Penney's Rebranding Fail

Sun Dec 30, 2012 3:27 am

Quoting type-rated (Reply 9):

Remember when JCPenny used to sell appliances and televisions and stereo's?

They had automotive as well at one time.
Then of course there was Montgomery Ward among other older retailers who went Tango Uniform and Sears Roebuck is hanging by a thread.

My take is this, before MasterCard, BankAmericard (VISA) and other nation/international credit cards, credit accounts were at each brands store.
Sears, Montgomery Ward, JC Penny etc offered credit accounts to customers. Customers remained loyal to the stores that offered credit for back to school, appliances that failed or needed replaced, and other purchases.
Now they have to compete with every retailer since the credit card company is the where the customer is loyal not the retailer.

Okie
 
Flighty
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RE: JC Penney's Rebranding Fail

Sun Dec 30, 2012 9:54 pm

Quoting okie (Reply 16):
My take is this, before MasterCard, BankAmericard (VISA) and other nation/international credit cards, credit accounts were at each brands store.
Sears, Montgomery Ward, JC Penny etc offered credit accounts to customers. Customers remained loyal to the stores that offered credit for back to school, appliances that failed or needed replaced, and other purchases.

Fascinating take. Of course, Sears helped to invent the credit card with Discover.

Most of these businesses still maintain store credit cards, to this day -- why, because it makes money still. Even though the store card biz has probably been hurt by the bigger credit cards...   
 
Maverick623
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RE: JC Penney's Rebranding Fail

Mon Dec 31, 2012 1:38 am

Quoting usflyer msp (Reply 15):
There is nothing at JC Penney that I absolutely have to have in order to live

Quite ironic, as JC Penney (like almost all other department stores in the US) was started as a dry-foods retailer.
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Ken777
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RE: JC Penney's Rebranding Fail

Tue Jan 01, 2013 2:36 am

Quoting usflyer msp (Reply 15):
Target has staples like frozen pizza, cat food and laundry detergent to draw people into the store.

I can't remember a time when we went to Target to get food. We might have bought food while we were there, but it's not worth the drive for food alone.

Where a lot of retailers can make money is ensuring that their replenishment programs are run aggressively. If someone goes there for some sox or underwear you had better have what they want in stock, or they find another store. You also need to ensure that they see enough inventory to buy more than the original intent.
 
DL_Mech
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RE: JC Penney's Rebranding Fail

Tue Jan 01, 2013 5:33 am

Quoting Ken777 (Reply 19):
Where a lot of retailers can make money is ensuring that their replenishment programs are run aggressively. If someone goes there for some sox or underwear you had better have what they want in stock, or they find another store. You also need to ensure that they see enough inventory to buy more than the original intent.

Yet Wal Mart and Home Depot with their complex inventory programs cannot keep merchandise from being strewn about the store. My personal favorite is the filled bins of incorrect items in the plumbing department at Home Depot. "A full bin is a stocked bin!"
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RE: JC Penney's Rebranding Fail

Tue Jan 01, 2013 9:34 am

Quoting Flighty (Reply 17):
Of course, Sears helped to invent the credit card with Discover.

Actually the Discover card was late to the credit card game. It was introduced in 1986 or so. MasterCard & Visa had already been around for a decade or more. By 1993 Sears had sold off their holdings in the Discover Card.
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FI642
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RE: JC Penney's Rebranding Fail

Tue Jan 01, 2013 5:53 pm

Quoting BMI727 (Reply 3):
  Go into a Kohl's store and try to find anything that actually costs the original price. You can buy a $20 shirt there, but the tag will say $35.
Quoting Maverick623 (Reply 11):
Quoting kngkyle (Reply 4):
It seems like Kohls has decided to just add 30%+ to the retail price of all their items and then make them perpetually on sale 30%+ off.

That's the typical department store gimmick. I can't tell you how many emails I get from the same companies claiming that a certain sale is on it's "Last Day!", only to find the same sale being "Extended!" or a new "Pricing Slash!" the very next day.

Kohl's marks up, so when they mark down, folks think they are getting a bargain.
Last week I purchased something from Kohl's, I found the same item for less at
another retailer for less. NOT on a sale like at Kohl's.

Just like JCP, I find the merchandise in Kohl's to be boring and nondescript.
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Okie
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RE: JC Penney's Rebranding Fail

Tue Jan 01, 2013 10:36 pm

Quoting type-rated (Reply 21):

Actually the Discover card was late to the credit card game

  
The plus was that they had a plethora of Sears credit customers in which to issue cards.

The minus was that Sears competitors viewed the Discovercard as Sears.
Few retailers would accept Discovercard because they had their own Credit Department and viewed the Discover as hostile since it was Sears Credit not theirs.
Why would you give a high profit item, credit card interest, to a competitor was their stance.


Okie

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