Sales events to make a comeback at J.C. Penney

New York -- J.C. Penney is changing course on its no-sales policy. It was just one year ago that the retailer, amid much fanfare, announced it was nearly eliminating sales events from its stores in favor of a three-tier pricing strategy and everyday low pricing. But on Monday the Associated Press reported that J.C. Penney is not only bringing back sales promotions to its stores, but will also add price tags or signs for approximately half of its merchandise that will show the "manufacturer's suggested retail price" next to J.C. Penney's "everyday" price.
    
For store branded items, J.C. Penney will show comparison prices for similar merchandise from competitors. Comparison prices, however, will not be shown for merchandise that is part of the exclusive partnerships J.C. Penney has entered into with brands such as Mango.

J.C. Penney’s decision to strictly limit promotional events, one part of CEO Ron Johnson’s ambitious reinvention plan for the company, has not gone over well with consumers. The company has struggled, reporting three consecutive quarters of drops in sales and profits. Industry analysts expect more of the same for the fourth quarter. J.C. Penney will announce its results in February.
 
J.C. Penney is not revealing how many sales events it will offer. But the company said the number will be well below the nearly 600 that it used to offer prior to Johnson’s new strategy, according to the report.

Johnson told the Associated Press that the decision to bring back sales was an "evolution" of his strategy.
   
"Our sales have gone backward a little more than we expected, but that doesn't change the vision or the strategy," said Johnson in the report. "We made changes and we learned an incredible amount. That is what's informing our tactics as we go forward."

To promote the price comparison strategy, J.C. Penney will air TV, print and digital ads, the report said.

 

Comments

Johnson is not a strategist

All it would have taken was for him to examine the traditions and habits of shoppers to realize the EDLP is not a viable option. What he may have gained in saved marketing dollars he lost to declining revenues.
JCP will now compound that blunder by destroying its pricing integrity all together.
The board needs to take action, bring on a mass merchant or department store pro to take the reigns and hire some decent strategists to get them back on track.
The one plus to all this was the visual updates in the stores.

JCP promotion strategy

Johnson could have done a little research and discovered other retailers' attempts at "everyday low prices" with little or no sales promotions has never worked in JCP's price points or below. Americans have become conditioned to expect "sales" on everything from apparel to cars.

And expect a conflict on "MSRP" or "compare at" signs. That won't last long as they will be sued to prove the claims which can't be proven.

It's hard to imagine how Johnson has kept his job this long after such a huge blunder.