Breakout

Sales Are Back: JCPenney Continues to Confound

Jeff Macke
Breakout

Almost exactly one year after making a splashy announcement that it was phasing out promotional pricing, JCPenney (JCP) said yesterday that it intends to add back some of the hundreds of discontinued promotions. Specifically, JCP vowed to resume promoting by price rather than fashion or variety. In addition the company is introducing new price tags that include not just how much an item costs but also what competitors are charging for the same merchandise.

The ostensible goal is to recover some of the greater than 25% decline same store sales in 2012. The likely outcome is an even more confused customer base, vendors and acceleration of JCPenney's slide into oblivion.

Successful consumer brands stand for one or at most two things. The trick for managers is identifying what those things are then driving the entire organization towards that vision. If the bosses do it right, every contact between an employee and a customer has a set of fixed expectations. The employees know what they are trying to deliver and customers know what to expect.

Nowhere is this rule of business more true than in retail where employees have repeated and almost intimate contact with shoppers. The key to satisfied shoppers is setting their expectations with consistency.

A customer at Target (TGT) goes in expecting good prices and low-priced fashion. WalMart (WMT) shoppers come into the store expecting friendly workers and the lowest possible prices. Macys (M) stands for middle end department store shopping and gap gives you the basics in a full range of sizes.

Customers expect these things because they always get them. Every time.

Shopping at JCPenney is an almost random affair. Some stores are new, while others have fallen into notorious disrepair. There are legacy workers offering old school retail service next to hipsters staffing shops within a shop. The younger customers the retailer is courting are mingling with the older loyalists.

By switching pricing strategies yet again JCPenney's only increases the confusion. In the last 12 months under CEO Ron Johnson, JCPenney has stood for a little bit of everything. As a result the brand stand for nothing but a punchline.

Employees, customers and investors and apparently even management is seemingly baffled as to what the company is now or will be next week. The only thing that becomes more certain with the returns of promotions to JCPenney is that the chain has taken another step backwards.

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