JC Penney is giving many shoppers exactly what they say they want: Everyday low prices instead of frequent sales. Many shoppers say that if an item goes on sale every month or so, why not just leave the item at an
everyday low price, since that appears to be the real price anyway?
It's an interesting strategy created by JCP's new CEO Ron Johnson. A former Apple executive, Johnson saw how effective Apple's "no sales" formula worked for them. He noticed that Penney's had 590 separate sales last year with nearly three quarters of its products selling at discounts of 50 percent or more, according to the Wall Street Journal.
Its new strategy involves red, white and blue sales. Prices marked in red are everyday low values (40 percent off), white signifies month-long sale prices (seasonal, such as jewelry for Valentine's Day) and blue indicates best prices, which are offered the first and third Friday of each month. For example, in today's sale, winter coats, already marked 40 percent off, get an additional discount.
Kathy Miller of Bloomington, who shops Herberger's and Penney's, isn't so sure about the change. "I like a sale," she said. "Otherwise, it loses its impact and intrigue." Miller's comments probably don't seem logical to someone who doesn't want to have to wait for a sale, but she's on to something. Without the advertising and the urgency to shop before it's over, a shopper may not go in at all. The sale reminds our heads that we desire something. Everyday low pricing translates to "out of sight, out of mind."
Johnson also plans physical changes to the stores' dowdy, aging image. Stores will be departmentalized at the expense of JCP's private labels, which will be curtailed. That means that brand names will have designated areas. Let's hope that putting designers into their separate areas, which Macy's, Kohl's and Herberger's are already doing, also includes a facelift.
Comparing Penney's and Herberger's at Southdale earlier this week, I noticed brighter colors, brighter lights, faster music, and a lot more shoppers at Herberger's. I might attribute that to the newness of Herberger's (its Southdale store opened late last year), but why aren't Penney's TV ads for its new concept bringing in customers yet? And where is the celebration of the new concept within the store? There were a few signs near customer service describing the changes, but otherwise nothing. The ceilings, store displays and racks were sign-less.
Maybe this new concept is getting what retailers call a "soft opening." The whole pricing strategy is a bold concept, and JCP's advertisements reflect that, but nothing in the store looks bold and exciting yet, except the prices.
Let's hope Penney's makes this work, but they've got a long way to go. Will the everyday low prices bring you to Penney's?