JC Penney was once a fashion icon to children, young adults, and teens. Beginning in 1913 it currently operates over 1000 stores. Growing up my sister and I waited to go through their catalogue. We would circle everything we wanted. We would even get our hair cut the same way some of their models did. I went as far as crimping my hair because the model had her hair crimped. Every summer before school started my Grandma would take us shopping at Penney’s for new school clothes. This company is near and dear to my heart. However, even though it has been operating for 100 years it has started failing.
This is not the first time that this company has been faced with adversity. The first time was in the 1960’s when shopping went from downtown locations to more uptown locations in malls. The company transitioned to mall locations to cope with the change. This time the change did not come easy to the company. In fact this change has cost the company millions.
This time JC Penney’s was faced with a challenge that they wanted to change. They wanted to transition the public’s perception of them. They no longer wanted to be viewed as an old fashioned department store. The company no longer wanted sales or clearance racks. They wanted to change the whole retail climate. They called it fair and square pricing (Baskin, 2013). This came off a lot like Wal-Mart’s always low prices campaign. This sounds like a great idea to me. However, it failed for many reasons. The main reason because it was confusing to consumers. While the other main reason being poor marketing.
Many people sat in anticipation of this new campaign by JCPenney’s. There were just as many supporters in the beginning as well. When I heard of this I thought of an upscale Wal-Mart. Low prices I do not have to shop for sales anymore because these should be low prices every day. However, very shortly after this I found myself not shopping there at all. Consumers want a deal, and they do not feel that deal when they shop there anymore. It is the thrill of the hunt for consumers. Not only that but the sales ad and clearance racks used to change. They are no longer changing prices so there is no need to go daily, weekly, or even monthly. Customers may check there as a way to show case, but they are not buying. Without the sales and without the sale advertisements the company is not bringing in nearly the amount of people that were coming into the store to score the best deal.
Next the advertisements they are sending out are worded poorly. They are no longer doing sales but they do mail out what they called month long value. Customers did not understand the wording of it. It was never broken down for them. Ideally they had sales, but they were not called the standard name. Therefore, customers missed out on them and they were not bringing in the clientele like a “sale” probably would have. They were not able to embrace JC Penney’s new tactic. Another problem with this campaign is that the average consumer does not know what the clothing costs. Therefore they think it should be or could be marked down. They have no idea if they were getting a good deal or not. Again the thrill of the hunt is gone, and still makes the customers confused. It was confusing to customers and that means there is a problem in marketing.
When a place makes changes that could potentially be confusing marketing is the key. However, there advertisements were so irreverent that they made even less sense to begin with. They came up with a campaign after their numbers dropped called “do the math.” It was supposed to show how much easier it is to just get a low price in the beginning rather than use a coupon. This action failed for the company. The CEO Ron Johnson came out and reported later that “it was confusing” to some of their consumers (Baskin, 2013). It’s no wonder that they lost customers. They did not target other competitors about their...