alphac2005
Well-Known Member
To be fair - not only did JC Penny change their pricing structure, they also changed the type of clothing they were selling to attract a younger, hipper clientele, and that was a failure. Their current shopping base didn't want that type of clothing and trendy, hip people aren't necessarily shopping at JCP. We have a stand alone store that opened up in our area a couple of years. A lot of the merchandise they have offered in the last couple of years was just downright ugly, and they couldn't sell no matter how they priced it. (Now, I will go put on my jorts and go sit in the corner).
I also think it's the idea of perceived value. If someone buys an $8 shirt, they perceive that it's a cheaply made and not very valuable. If someone buys the same shirt that was once priced at $40, but they pay $8 for it, they feel that they are getting a better quality product that is actually worth $40. It's no longer a cheap piece of crap shirt - it's a nicely made shirt that was discounted for whatever reason. Of course, being the savvy shopper that I am, I buy most of my clothes at Goodwill and bypass the middleman. I have a wardrobe full of awesome clothes for next to nothing.
I think the bigger lesson is to know your core audience and know who spends money. It was a good idea for JCP to go after the younger dollars, but they alienated their current customer base in the process. I think this is exactly what is happening at WDW. They are going after the big spenders (Brazilian tourists, the one-timers who blow a huge wad of money) while alienating their bread and butter who may not spend as much but who provided a consistent revenue stream - the DVCers who are loyal who may not spend as much, they AP holders, the families who visit every year but may not necessarily stay deluxe, etc.
Good post. Well, what jcpenney did was more perception than reality. Hm, let me try this one out... Our business has relations with firms that did work for them. Their marketing campaign was completely changed to appeal to exactly what you said, a younger, hipper demographic, however, that didn't translate into the reality of the physical store square footage of the types of clothing that they stocked. Then head of jcpenney Ron Johnson brought in the concept of stores within stores from Martha Stewart to Ulta, but they had multiple issues going on at once:
The younger graphic that they were appealing to went to try them out and they were sorely disappointed that the stores didn't match what was being advertised, their core audience felt completely abandoned for a variety of reasons including the ad campaign and lack of gimmick pricing. There wasn't much of an an actual change in the clothing that they've stock for ages, rather, it was all about their marketing from item pricing signage to their air, online, and print campaigns.
I was given a study that was done about jcpenney by a consulting group after everything fell apart and they brought back their old CEO. The data was amazing to me and a study in human psychology. Examples would include that they would show people the new bottom line price in the store and then showed them the same product with a higher price with coupons. Of those surveyed, the vast majority preferred the sale pricing along with coupons... even though they would be paying more!! It was unreal. They complained about the updating and changes in some of the stores that received partial face-lifts, although one of the biggest dings on jcpenney is how out of date their stores are.
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