JC Penney’s New Pricing Model – Yay or Nay?

This recent conversation with Christina has given me fodder for a new (and much needed) post. It is referencing the new pricing strategy that JC Penney is taking in their retail stores. Goodbye to “Lowest Prices of the Season” sales….and “BIG Savings”….and “70% Off Storewide”…Yes – you can probably even hear that woman’s voice on the commercial telling you time and time again that there are great deals to be had.

However, over the last several decades, they were training people to not come into their store unless there was a sale going on. Realistically, that was pretty much all the time, but still – I, personally, wouldn’t buy anything unless it was on sale. Tragic, I know. And the only time I would purposely make a special trip there was if they were having a big sale. Otherwise it was by coincidence.

What?! No Clearance Sticker?! Omg….someone get me a latte….

Imagine if you went into JC Penney and there weren’t any sales. ???? Would you still shop? I think I would feel like I walked into some kind of sci-fi movie where everything looks kind of the same, but at any moment….some creature’s going to pop out from behind the clothes rack and eat my brains………………!!

wait…uh….sorry.

anyway…..

Promoting Value, Not Price

That’s all they used to promote in their ads – the sales. Now, instead of devaluing their products by saying “oh, these really aren’t worth the regular price, so we’re lowering the price” or “people didn’t really like this stuff this season, so we’re clearing them out for cheap”, I wonder if they’ll take the route of promoting the value of the products they’re selling. I wonder if that means we’ll hear commercials like “JC Penney offers brands that fit your lifestyle, AND your budget.” or “Feel good about shopping with us – JC Penney is giving back….”

Or maybe they’ll get creative and offer supervised play areas while mommies shop. (I, personally, LOVE that idea.) Not only will they have to promote the products in their store, but the product that is JC Penney. What else can they do to change the experience of shopping there that will get people thinking about something other than the fact that there aren’t any sales going on?

Retraining a Generation on How to Shop

Ok – so here’s another thought – how do they educate their customers about their new pricing? They’re essentially going to have to retrain an entire generation on how to shop. When the economy is on a rocky road anyway and people are pinching pennies whenever possible, how do they tell their customers that they’re going to be paying full price? Even if they do call it a “value price” or “everyday value” or whatever – it’s still full price in the eyes of the consumer. So how do they say – ‘we’ve been doing this wrong for the last 100 years, and now we’re going to show you the actual value of these products’?

Here’s a familiar story that I’m sure many of you can relate to: My mother-in-law always gets the Sunday paper and finds the ads – it’s almost like a ritual – we find the good ones (yeah, the BIGGEST Sale of the Year!) and make a trip out of it with the girls or the kids. Then afterwards, we share with each other the great deals we found. We are always so proud of ourselves for being such savvy shoppers.

So, there’s another retraining that has to go on. Looking for sales has become part of our lifestyle – part of our social rituals…..and now JC Penney is going to be left out of that. Or are they?

Getting Them All On Board…or not?

Many retailers use this promotional pricing strategy, but it’s so overused that, as consumers, we don’t really know what the value of a product is. As marketers, how do we know what people are really willing to pay so that we know how to price our products?

So my question is: for marketers, how does this affect consumers and how they think about retail shopping? Will they appreciate the ballsy move of JC Penney and finally say to the other stores “Hey! We’re not stupid! Stop trying to sucker us into buying your stuff!”? Or, will they say to JC Penney “Hey – you’re so much more expensive now, I’m not shopping there anymore…I can’t afford it.”?

Do you think the other big department stores will follow suit? Or will they take advantage of this new environment and continue to fool us with their flashy signs and super-duper-awesome-amazing low prices (a.k.a. prices-still-with-enough-margin-to-make-the-company-a-little-money)?

My opinion? I think it is a start in the right direction. I think it’s going to be tough because most people don’t care….they just want it cheap, fast, now. But – if JCP can prove themselves and offer stories of how people are still saving by buying at their store AND getting good stuff, I think the idea will spread and it will be good for them – and good for consumers. A long road awaits…..we’ll see how it goes…..

More stories about this:

Article from ABC News on this:
http://abcnews.go.com/blogs/business/2012/01/what-to-expect-j-c-penneys-new-pricing-strategy/

From Harvard Business Review blog:
http://blogs.hbr.org/cs/2012/01/understanding_jc_penneys_risky.html

http://www.qualitylogoproducts.com/blog/jcpenney-pricing-strategy/

http://www.cleveland.com/business/index.ssf/2012/01/jcpenney_aims_to_draw_shoppers_with_everyday_low_prices_and_new_brands.html

Website Development & Design, Video Production, E-Commerce, Web Applications

Check out the updated video for JB Systems and The Post House. We’re in our new office space now in downtown Eau Claire, WI – together providing our clients with awesome ideas, technologies, and graphics to use for web or video. Lots of cool things happening inside these walls – here’s an inside look at what we do!

Our website, if you’d like to contact us:
http://www.jbsystemsllc.com

Business owners and marketers…PLEASE don’t be a spammer!

Permission marketing is a MUST and shouldn’t be ignored. You may think buying that big email list is the best way to reach lots of people who can sign up or buy or whatever…but that pretty much makes you a spammer.

http://sethgodin.typepad.com/seths_blog/2008/01/permission-mark.html

Some ways to build your list – a qualified, permission-based list:

• Add an opt-in form to your website – ask for very simple information, maybe name and email address and that’s it. Reassure people that you don’t sell or share your list with anyone else. As you gain their trust, you can (over time) ask for other tidbits of their information.
• Train your sales staff to ask for an email address! It seems so simple, but actually getting sales people to feel comfortable asking for an email address can be challenging. Offer exclusivity or very special content in your emails and that will make it much easier to get those email addresses.
• Offer free content on your website – give them a few freebies, and then offer something really good…but collect a very small amount of information (name/email) before they can download/view it.
• Hold a contest – we all know how those work, but make sure that you collect their email! Note on your entry form that a valid email must be provided in order to win. Again, reassure people that you will not sell or share their personal information.
• Promote your email promotions/newsletter in other marketing that you do – ‘sell’ it as a quality source of information or great deals and people will go looking for it.

Permission marketing is personal, relevant, and anticipated. – Seth Godin

A friend of mine is an emerging musician.

His name is Travis Grode. He just released his first solo EP and I’m trying to promote it through whatever means I have at my disposal. He describes his music as this on his website:

“An introspective indie record for those who like their music to have substance. Raw and edgy vocals combined with heartbreaking lyrics and a stripped down acoustic sound featuring cello and piano highlights.”

Download this Album on iTunes

From our early days jamming after basketball games or playing at Phil’s Pub, I always believed that Travis’s passion for music and talent would bring him opportunities, now unfolding in front of our eyes.

Visit his website to listen to the album – if you like what you hear, download them for only $0.99 each on iTunes or Amazon.

Don’t forget to share with your friends, too…

Follow Travis…

…on Twitter: @TravisGrode
…on Facebook:
http://www.facebook.com/people/Travis-Grode/524335480

 

Every business should know…

…what it is that makes you/your company different from everyone else.

Why should someone choose your product/service? What makes you different from your competitors? If there’s nothing differentiating you from the other guys, how is someone supposed to produce the logic to choose you? There has to be a reason why they buy from you. There’s always a reason why people buy.

Here are a few areas where you can differentiate if you find yourself wondering ‘why me?’:

Expertise - Narrow your focus and be the very best at something more specific. Hone your skills and make yourself known as the ‘expert’. Being just OK at a lot of things puts you in a category with too many others. Focus on being the best.

Price - are you lower cost (perceived: less quality), higher cost (perceived: higher quality), or somewhere in the middle? How do you choose? In your industry, is price a deciding factor? If you’re selling a commodity, probably..in a sea of products that are virtually the same, who wouldn’t choose the lower priced one? If you’re selling a specialized service, custom, or hard-to-find product, price may not matter…most people are willing to pay for value.

Convenience - Maybe you have more locations or more accessible locations, maybe your service is a much quicker process, maybe you have a drive-through service, maybe you make house calls, maybe your product works by itself…

Emotion - I believe that everyone buys for some kind of emotional reason. Does your product/service make someone feel better? Does it validate or support their own personal views? Think of the environmentalist, the law enforcement officer, the mother, the ambitious young professional, the blue-collar steel worker, the Catholic grandmother…they are passionate about some very specific things, and you can differentiate yourself by aligning your messages with their views.

Now ask yourself, ‘If I could choose either my company, or my biggest competitor, WHY would I choose me?’

Be specific.

Social Media, Your Website, Your Business

Inspired by Seth Godin’s Meatball Sundae (check it out here – the YouTube video is entertaining)

Your social media strategy is only as good as the website you’re directing your friends, fans, and followers to. If the two aren’t consistent, and aren’t geared at turning those friends, fans, and followers into customers and raving fans, then how can we expect social media to work?

Social media is not just another channel for you to push the same messages about the same old products, either. It’s a new way of interacting with and listening to your customers. If your business isn’t willing to adapt to the new ways that consumers are absorbing messages and making buying decisions, it’s going to be a long road of trying to make the new marketing (i.e. social media) tactics work.

Because consumers (or buyers for business services) have so many choices, and can decide more freely how to receive marketing messages, they don’t have to settle for what marketers are telling them anymore. They can now listen to their friends, and their friends’ friends, or seek out other independent third-party credible sources about where to shop, eat, get their car fixed, etc.

Our job as marketers then becomes how to be part of the conversation and offer anticipated, relevant, and useful information at the right time, instead of scrambling to find audiences to listen to a message that isn’t relevant to them. I guarantee, if we stick with the old ways, no one will be listening.

So, take a look at your own website. Is it ready for the social media world? Ask yourself these questions. What changes can you make?

• Is your website social? Does it allow people to share information with you and about you easily?
• Does it focus on things that people are really interested in or does it just focus on you?
• Does it let them interact with you, and with others?
• Are you listening and responding to them?
• Does it allow them to share their own content that’s relevant to your products/services?

I’ll be talking about this and more at a social media conference coming up next Wednesday, September 29th for the Eau Claire Chamber of Commerce. To register, go to their website. For website questions, contact me at JB Systems and I’d be happy to help!

Here’s a good Roadmap for marketing on Facebook

I found this research article on Jeff Bullas’ blog, and I read it from start to finish. It gives you some real-life examples of what companies are doing on Facebook, and it measures how well companies are doing with Facebook. Some really helpful tips that you can actually implement – I highly suggest reading it!

Here’s a link to Jeff’s blog if you’d like a shortened version: http://www.jeffbullas.com/2010/07/29/the-8-keys-to-success-for-facebook-marketing/

Here’s the full version to get examples and more in-depth stories – The 8 Success Criteria for Facebook Page Marketing:

The 8 Success Criteria For Facebook Page Marketing

View more documents from Jeremiah Owyang.