Has JCPenney’s New Strategy Lost It Millions of Shoppers?

Worthington, OH—JCPenney may have instituted its “fair and square” everyday low price strategy and discontinued its price off coupons etc., but at what price?

In a recent survey of some 9,000 consumers by BIGinsight, a consumer research firm that tallies a Consumer Equity Index about 10 top apparel-selling retailers for period of September 2011 to September 2012, nine of the 10 retailers either held their share or gained market share. Only JCPenney showed a decline—down 13% from the previous year. The survey’s decrease extrapolates into some 1.3 million women who may have stopped shopping JCPenney.

Even so, JCPenney kept its spot as the third most popular shopping destination behind Walmart and Kohl’s, noted Pam Goodfellow, consumer insights director for BIGinsight.

But, she added that Macy’s will soon bypass JCPenney among shoppers to be No. 3.

“I think what’s hurt JCPenney is that they’ve taken away these deals and coupons,” said Goodfellow, referring to the “fair and square” policy instituted by JCPenney CEO Ron Johnson, the former head of Apple retail.

“Shoppers are still very much gravitating toward promos and deals…When you’re receiving Macy’s coupons in the mail, you have more incentive to head over there,” Goodfellow said. “Shoppers have been educated to expect those gimmicks and give them a reason to head out to the mall,” she says. “Given the type of retailer [J.C. Penney is], these promos are what motivate shoppers.”

Goodfellow said that JCPenney has taken some positive steps such as focusing on exclusive brands such as Nicole Miller, Liz Claiborne, Mango, even the Olsens.

Consumers demand quality products at great prices—and they want to feel good about their purchases when walking out the door, Goodfellow said.

“Here’s where JC Penney missteps: they have eliminated the excitement from the shoppers’ buying process,” she added. “Having an extra 10% to 20% off coupon or buying an item on sale–which Kohl’s and Macy’s offer in abundance–gives the shopper the feeling that they’ve one-upped the retailer, i.e. the customer wins.”

 

 

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