JCPenney recently announced a bold new everyday low pricing strategy, greatly reducing the number of sales events and specials in its stores. They heavily promoted their new approach as a more rational business model and a better deal for the consumer.
However, JCPenney sales have fallen dramatically since introducting the new approach. (Sales plunged 18.9% for Q1 and the reported loss was more than twice what was expected.) The consumer isn’t buying. Why?
A better question is, “Why should they?” Unlike Apple Stores or the legendary Nordstroms chain who eschew the heavy discounting in favor of a unique buying experience, JCPenny stores and buying experience are not special at all. In fact, they are somewhat mediocre. So coupons and discounts are about all they have to pull customers into their stores. This strategy sure works for competitors Macys and Kohls.
Seems that for JCPenney’s new strategy to work in the highly competitive apparel and home goods industry, there would need to be a compelling reason for shoppers to go visit their stores. JCPenney left that part out of their business plan.