It doesn’t take an extreme couponer to get excited about a good deal. I believe I was born with a knack for bargain shopping. You may not know my mother, but trust me, you won’t find either of us shopping at the front of the store where things are full price, puh-leez.
Let me brag on the Howard ladies for a moment while I share one of our proudest JC Penney shopping trips. We went in with needing nothing in particular except to utilize a $10 off $10 coupon. Were there 50% sales on top of this coupon? You betcha. I walked away spending $0.19 for a necklace, earrings and bracelet. #NBD This is why we don’t buy anything at JC Penney’s without their weekly coupons and sales.
But JC Penney’s recently appointed CEO, Ron Johnson, has announced a new competitive strategy to replace the company’s overwhelming amount of sale days. According to an article written by the Associate Press, Johnson announced “Customers will not pay literally a penny more than the true value of the product,” meaning prices will be permanently reduced by at least 40 percent.
The overall strategy includes a new logo that represents the “fair and square” theme the new pricing is meant to portray and new advertisements like the commercial below.
As for the actual pricing changes, prices will be rounded to a flat number, instead of ending in 99. This defies the marketing strategy that consumers perceive numbers ending in 99 lower than if they were just one penny higher. The price tags will change also to make them easier to identify the price point. They will be color coded according to whether or not it is an every day price, a month-long sale price (holidays still get sales) or a best price (clearance).
We can only evaluate the implications of this complete re-branding strategy when it launches on February 1. This moment could make or break the retail company. JC Penney’s strategy is is a much stronger approach than Gap’s attempt to at re-branding by changing their logo a year and a half ago, and we all remember consumers’ reactions online that forced them to return to their former logo. How will consumers react to this complete overhaul?
Last time I was in JC Penney, I believe my exact words were “Why don’t they just make the price $20 instead of marking it down from $40? There is no way I would ever pay $40 for this!” and I walked out without purchasing anything. I also can reflect on my attitude of JC Penney over the years. As a teen, it was a place to find cute, inexpensive clothes- especially homecoming dresses. As an adult, I felt almost trashy digging through the racks of sale items. Almost always, there is a shirt with a rip for sale.
Will the lower prices change my attitude from thinking it’s trashy to a steal-of-a-deal? I imagine it will feel more organized and less crammed together on designated sale racks, but will the quality suffer? Will my mind feel like I am not getting a deal if I buy something from the front of the store? Will I walk out when there are no red sale signs drawing me in? Will the employees take a pay cut and be less friendly?
What do you think about this strategy? Will it bomb or re-position JC Penney in a positive light?
But wait, there’s more! Here is the best part of the story: to celebrate the new everyday low price strategy… they are having a sale! Don’t forget to print your coupon from Facebook! Now that’s ironic.