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From Promotions to RFID, JCP Rethinks Strategy and Schedule
By Jessica Binns, Contributing Editor
A year after rolling out its bold and risky everyday value pricing strategy, national department store chain JCP is moving towards embracing promotions again. The retailer's share price has tumbled significantly over the past 12 months, from a high of $43 to roughly $19, according to the AP.
The retailer will also include price comparison information for shoppers, displaying how much more a particular product would cost at a competitor. "The strategy will be helpful for shoppers to understand lower prices," Flickinger says in the AP report. "At the same time, it will be tough to get consumers back in the store from competitors."
JCP launched its "fair and square" everyday value pricing plan in February 2012, offering new low prices — permanent 40 percent discounts on everything in store — and 12 month-long sales, instead of the ever-changing parade of promotions and discounts. According to the AP report, however, JCP CEO Ron Johnson says "Penney has learned that people don't shop on a monthly basis, but rather they buy when they need something for say, back-to-school or during the winter holidays. And during those times ... they're looking for even more value."
Although the retailer is expected to post its fourth consecutive quarterly loss in the next earnings period, Johnson expects the company to resume sales growth by the end of 2013.
"A year ago, we were launching a major transformation and didn't know what to expect," he told the AP. "Today, I know what happened. Our team has a year's worth of history. This is going to be a great year because the new JCP is coming to life for customers."
Still on the RFID train, but a little off track
The retailer also seems to be amending its ambitious RFID program. Johnson announced in 2012 that all of JCP's stores would be fully RFID-enabled by Feb. 1, 2013, in a move toward using store WiFi and mobile POS to eliminate cash payment and fixed registers. However, Supply Chain Digest reports that a new letter from JCP to its suppliers indicates that that vision may be off schedule.
"I think JC Penney was just caught in a sort of Rubik's cube in terms of merchandising, store layout and product tagging," one Penney's vendor told SCDigest. "They are changing the merchandise plan, so there is no need to tag products that may be eliminated soon. Store layouts are also changing, being done in conjunction with the merchandise plan, and which include the "stores in store" concept for things like Levi's jeans and more. There are just too many moving and inter-connected parts to go forward with a full RFID rollout."
For now, JCP will include RFID tags on bras, denim products and footwear.
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