Like any good comeback story, there first has to be a point where things go sour for our main character. In the case of JCPenney, that point came at the end of the Great Recession when consumer spending bottomed out and like many major retailers the company struggled to adjust to a base that was pinching more pennies than they were spending. In a widely publicized effort to turn things around the company brought in new high profile leadership, a new logo and an aggressive pivot towards a trendier retail brand shunning promotions for in-store experience. It didn’t work.
Despite the makeover, JCPenney’s fix didn’t extend beyond the surface and in the long run only served to further alienate its closest friends and customers. For a while, it looked like the retailer might not be able to recover from this string of knockdowns. Enter JCPenney’s own Mickey into the ring, in the form of former CEO Mark Ullman and current CEO Marvin Ellison. Since Ellison has taken over, JCPenney has managed to make this third act a true story of retail redemption. Here’s how:
Revisiting their roots and asking the customer what they want
JCPenney is back in the ring, listening to their core customer and employee base. Ellison, himself a classic JCPenney customer in his youth brought back the value and experience he remembered as a kid. Turns out, not all customers want a trendy showroom and tactically the retailer has made the right moves reintroducing localized focus groups, piloting new programs ahead of nationwide rollout and letting the data guide their decision making. All in an effort to give JCPenney customers what they actually want, not what the C-Suite insists they must want.
Consider the retailer’s “Get Your Penney’s Worth” campaign. It sounds like it could be straight out of the nineties, but what it really offers is an irresistible buy one, get one promotion for $.01. Customers love it and it actually drives sales – it’s a total throwback to the value JCPenney has been known for. The retailer is practicing a one-two punch by also doubling down on their own popular private label brands and new names to add to the existing mix like Arizona, Liz Claiborne, etc.
Outsmarting the competition… in digital
JCPenney, like many department stores, notoriously struggles with making sense of digital as a brick-and-mortar player. Retail competition increased and never stopped with the advent of online, while traditional retailers held out on adapting to this new digital landscape. To compete, JCPenney invested smartly in the omni-channel experience – specifically making use of all that real estate it already had to the point where about fifty percent of its online sales have come through the stores. They have armed customers with local information, where it is most relevant, by updating their mobile applications to make local stores and offers front and center. Then the retailer took this omni-channel driven approach one step further by encouraging customers to come in brick & mortar locations with store-only coupons attached to pick up receipts. This edge over the competition is letting them rise up through the ranks both in-store and online, while many other companies simply get crushed under the weight of too much floor space.