At the beginning of this year, 110-year-old retailer, JCPenney began making changes to its brand in an effort to restore it’s integrity and transform the way shoppers feel about the experience of retail stores. Their aim is to get rid of the frustration and make shopping “simpler” and it is all part of a brand overhaul planned by Apple exec turned new JCPenney CEO Ron Johnson. Johnson plans to completely revamp JCPenney’s image by 2015 and his plan is to do that by taking big risks. Johnson draws his inspiration from his former boss, the late Steve Jobs. His new marketing strategy will all be about product, place, price, and promotion – the 4 P’s of marketing. But he will also add in presentation and personality to increase curiosity and interest in JCPenney.
Here is a short summary of how Johnson’s marketing strategy will work. Some of these plans have already been implemented but others are on their way.
1. Product: Same Quality, More Brands
JCPenney will still carry the same merchandise that we all know and rely on. (Curtains, anybody? This is one of my favorite places for home decorations.) Johnson has promised there will be no changes or sacrifices in quality, something many shoppers question when a company reinvents itself and one of the key elements in the rebranding revolves around everyday lower prices. In fact, some think the quality of products may even improve. Johnson is “simplifying” many of the company’s operations, saving JCPenney millions annually which may eventually be passed on to the consumer in terms of even lower low prices but this is yet to be seen since the company just began implementing these changes in February. In addition to the many brands we are familiar with, such as American Living and St. John’s Bay, Johnson also plans to add more than 100 new brands to the store by 2015 helping to revive JCPenney’s lackluster reputation.
2. Place: The Retail Setting
The retail setting is where sales are made and business is conducted. A store’s layout, organization, and ambiance are key in how successful retail business is. Johnson has big plans for JCPenney’s retail stores. The first major change is reorganization of the store. Services will now be found in the center of the store and products around the perimeter. (Funny coincidence? This is very similar to an Apple store.) In addition to this, brand name clothing lines will be confined to small areas of the store called “shops”. This is an improvement over the previous method since many people tend to shop with a specific brand in mind. Again, “simplification” is the goal, no aimless wandering to find a certain product, everything will have a methodical place.
3. Pricing: New, Simplified Pricing
Johnson has eliminated clearance sales and introduced a new 3-tier pricing system for JCPenney. The first tier is the everyday low price (regular price, which is said to be 40% of that of competitors). The second tier is the month long sale items. These items will have their prices discounted more than the regular everyday price for that particular month which is part of the simplified promotion strategy (see below). The final tier is the “best price” discount which occurs on selected items every 1st and 3rd Friday of the month.
In addition to this, all products will have “simplified” prices. No more $9.99 for a shirt, all prices will be rounded to the nearest dollar, giving consumers a simplified shopping experience. Not to mention, their new return policy is “happy returns: any item, anytime, anywhere. it’s that simple.”
4. Promotion: A New Set Each Month
In the past, JCPenney had over 590 different sales a year, with no noticeable increases in revenue from the sales. Johnson felt that this was probably due to the fact that consumers felt like they weren’t really getting a good deal because everything was always on sale. In Johnson’s new approach, there will now only be 12 promotions a year,themed by the month.
5. Presentation: Minimalistic
JCPenney has opted for a concept of minimalism in it’s advertising. (Something that first drew me to this topic. Their new ads are amazing.) By using focused, “simplified” imagery and accentuating key colors in a photograph, there is greater emphasis on the products themselves and you can actually see what they are offering. If you haven’t seen their new advertising campaign yet, I suggest that you take a look.
6. Personality: Hip and Ageless
With all these changes, JCPenney hopes to get away from that feeling of being old and become cool again. They even redesigned their logo to go with their “simplistic” and new style. It is a plain red square, connecting to their “fair and square” ad campaign. It is being dubbed the “frame” logo which has become prominent in all of their new advertising especially helping to “frame” products and giving them the attention they deserve.
My Take On All Of This.
Johnson is taking a big risk with all of his new marketing strategies, but I think it is a risk that needs to be taken. JCPenney was struggling to survive and needed to alter their image in order to stand out from their competition and they are doing this by making things “simpler,” now let’s see if it catches on. I know I am excited to watch how it plays out. I totally love all their new print advertising pieces. Clean, “simplistic” design. Nothing is better than that in my eyes. I even stopped in to JCPenney to witness the actual changes and I love how it all ties together with the squares. And they even have clean and simple pricing structure to match, but is it going to work? I am a bit skeptical of some of the elements that they offer such as sales on Fridays (I work!) and no coupons since seeing the price drop instantly gives me a sense of satisfaction. However, we are all hesitant to change in the beginning but if they are being honest with their prices I think that it might just work. I get tired of gimmicks. Thumbs up to JCPenney to being bold, I am rooting for them. What do you think about the “new” JCPenney?
Drawing Conclusions for Advisory Businesses.
I think our advisory business clients can take some interesting lessons from all this:
First, the boldness Johnson is exercising is inspirational. We see so many businesses shy away from being bold and playing it safe. When you play it safe, it looks to others (including potential customers!) like business as usual, and you don’t get any notice or interest in what you are doing.
Second, he’s showing us the important role that design plays in reinventing yourself. The new look is drastically different than the old one and has energy and drama to it. The tv ads look fresh and different than other tv ads. The newspaper ads scream off the page, and they do it because of great design work, with strong color themes that work together and simplified page layouts that put a stylistic context to the products featured on the page.
Last, he’s listening. The changes are customer-centric. He took the time to get into the mind of the consumer and see things from their point of view, and he worked backwards from there. Just the fact that he saw the need to implement drastic changes is to his credit. So often we hear clients defend the status quo of what they are doing and make choices that are more about what they want to offer than what the customer wants to buy. Johnson’s focus is on the customer first, realigning the company from there, not the other way around.
Well done, Ron Johnson. You have lofty goals and a big undertaking on your desk. But I, for one, am routing for your success.
~ Bethany Howell, art director
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