JCPenney's repositioning
2/27/2012 @ 3:58PM |8,768 views
Can J.C. Penney Become 'America's Favorite Store?'
This article is by Alexander Chernev, associate professor of marketing at the Kellogg School of Management, Northwestern University.
On Jan. 25, J.C. Penney unveiled its new long-term strategy to improve declining sales revenues and profits. A key element of this strategy is its revamped pricing, which involves moving away from its frequent and deep promotional discounts to everyday low pricing with month-long, slightly discounted promotional prices on certain items and bi-weekly clearance sales. These pricing changes were complemented by a new brand identity that includes a revised logo, naming Ellen DeGeneres as the company’s new spokesperson, as well as a “reinvented” shopping experience that breaks up the store into a series of shops representing approximately 100 different brands (including J.C. Penney’s own labels such as Arizona Jeans, Stafford, and St John’s Bay; exclusive versions of upscale brands such as MNG by Mango; and most prominently, Martha Stewart‘s eponymousbrand).
J.C. Penney’s new strategy—which some deem visionary while others question its wisdom—challenges many of the assumptions behind the modus operandi of many fashion retailers. And whereas most media and analyst attention has been focused on jcpenney’s new pricing, another more fundamental aspect of J.C. Penney’s strategy has been largely overlooked. This issue is the retailer’s desire to be “a store for all Americans—rich and poor, young and old, rural and suburban.”[i] While this goal cannot be faulted for lack of ambition, it goes against the conventional wisdom that it is difficult to succeed by trying to be everything to everybody. In fact, many companies have failed because of their unwillingness to “give up” serving some customers in order to better fulfill the needs of others. The question then is: Will J.C. Penney be able to succeed where others have failed, or will it soon
Can J.C. Penney Become 'America's Favorite Store?'
This article is by Alexander Chernev, associate professor of marketing at the Kellogg School of Management, Northwestern University.
On Jan. 25, J.C. Penney unveiled its new long-term strategy to improve declining sales revenues and profits. A key element of this strategy is its revamped pricing, which involves moving away from its frequent and deep promotional discounts to everyday low pricing with month-long, slightly discounted promotional prices on certain items and bi-weekly clearance sales. These pricing changes were complemented by a new brand identity that includes a revised logo, naming Ellen DeGeneres as the company’s new spokesperson, as well as a “reinvented” shopping experience that breaks up the store into a series of shops representing approximately 100 different brands (including J.C. Penney’s own labels such as Arizona Jeans, Stafford, and St John’s Bay; exclusive versions of upscale brands such as MNG by Mango; and most prominently, Martha Stewart‘s eponymousbrand).
J.C. Penney’s new strategy—which some deem visionary while others question its wisdom—challenges many of the assumptions behind the modus operandi of many fashion retailers. And whereas most media and analyst attention has been focused on jcpenney’s new pricing, another more fundamental aspect of J.C. Penney’s strategy has been largely overlooked. This issue is the retailer’s desire to be “a store for all Americans—rich and poor, young and old, rural and suburban.”[i] While this goal cannot be faulted for lack of ambition, it goes against the conventional wisdom that it is difficult to succeed by trying to be everything to everybody. In fact, many companies have failed because of their unwillingness to “give up” serving some customers in order to better fulfill the needs of others. The question then is: Will J.C. Penney be able to succeed where others have failed, or will it soon