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

My Return and a Little About Facebook Advertising

Since February, I’ve pretty much been hiatus from my blog. All of a sudden – with the change to a new job – my life got a whole lot busier. Now that summer time is here, I’m just as busy, but I’ve missed keeping up on here, so I’m going to make a conscious efforts to keep it going.

That said, here are a few things I’ve learned in the last couple of months about advertising on Facebook:

• They bill you daily, and you can’t change it. Mid-campaign we came across a message that the credit card was declined. The credit card company had flagged the small, frequent transactions as potential fraud. One phone call to the credit card company took care of it, but it’s something to be aware of. As far as I know, Facebook hasn’t come out with any other billing option.
• It’s good to check back on your ad campaigns every so often – not just to see how they’re doing, but also to make sure your bid is still getting you clicks. Demand for certain keywords or target demographics changes daily, so the amount it takes to get your ad shown might change just like that. You can adjust your bids just like you would in Google AdWords, and you want to make sure your ads are still being shown.

The campaign I ran was fairly small and I’m still getting into it. What have you learned about Facebook advertising so far in your campaigns?

Every ad should have a home

If your ads tell your customers to go to www. yoursite .com, are they going to be able to find whatever the ad was talking about (a special sale or publication for download)? Or will they have to dig around your site to find it?

Every ad or campaign that you put out there should have its own home. Whether it’s a landing page, a microsite, or some other location, there should be a place that customers go to where they know they’re in the right spot (they see the same graphics, or read the same phrases as in the ad) and where they can get what the ad told them they would get. If your ad offers them 30% off of a certain product and they’re directed to your home page, chances are they’re not going to go searching through your online catalog, they’re going to go searching for your competitor with an easy to find product.

This also applies for offline actions. If your ad says “stop in our store on Saturday for free samples of our newest chocolate” and you don’t have any signage about the free samples in your store, customers are going to be confused. If it were me, I would feel like maybe I misread the ad or something and maybe the free samples aren’t really available…and I’m too proud to ask for something for free. Then I walk out so I don’t feel stupid for asking. Hmm…lost sale. In this case, maybe you would set up a specific place in your store just for the free samples (like an offline landing page) and customers would easily know that that’s where they’re supposed to go.

So next time you’re planning an advertising campaign, think about this…Where specifically are your customers going to go when they act on your ad? And when they get there, is it painfully obvious where they are, what they’re supposed to do there, and why they should do it? If you’re not sure where exactly your customers are going when they act on your ad, you’d better figure it out…or plan on wasting some money.

MarketingExperiments.com does a great job at showing how landing pages that are simple and painfully obvious work wonders for sales. They have a lot of free web clinics (they may even choose to optimize a landing page on your site). Check them out here: http://www.marketingexperiments.com

One-Click

Just another note to add: If the ad says “sign up”, the page should let them sign up in one step. If the ad says “show your support”, the ad should take them to a page where they can give a donation in one step. The more they can do on that one page, the better your chances are of keeping them through the process. If they have to keep clicking to get further and further, you’ll probably lose them along the way.

Marketing vs. Advertising

I know that this has been highlighted in many other blogs, articles, papers, etc., but I’d like to reiterate the fact that marketing does not equal advertising. Going back to the basics,  marketing encompasses four main activities (which have been added to over the years to account for other factors like people): product, price, place, and promotion. Advertising fits into the promotion part, and so is a small part of marketing. For the sake of sounding intelligent, please don’t interchange the two words. If you’re talking about promoting your business, then say promoting or advertising. If you’re talking about getting customers to buy your product, find your product, make a decision to choose your product…or even finding your customers…that’s marketing, and usually the mix includes advertising of some kind.

This also refers to buying media, or advertising. Just because someone is a media buyer, or agent, that doesn’t make them a marketing expert. Again, marketer does not equal media buyer. If anything, they’re a negotiator and media expert maybe and someone that you may want to consult if you’re going to purchase advertising.

All I ask is that you just take a minute to think about what marketing really is, and don’t just assume that all marketing is is advertising, or even promotion for that matter. There’s so much more to it that makes customers and products come together.

 

Married to ideas

This post is a follow up to a previous post on branding.

Our organization went through a re-branding process not long ago. We created a new logo and a new look for the corporation. No slogan though – we waited on that because we knew it would take more time than we could dedicate to it at the time.

Our graphic design intern and I both came up with some ideas for the logo but we weren’t trying to make a finished piece. We were trying to provide variety so that we could better understand what the group liked/disliked and find pieces that would really stand out. We also made it a point in that process not to show our personal opinions and let the group’s reactions, body language, and ideas come to the forefront.

If you (or someone on your creative team) is “married” to one of the ideas, remove yourself from the process and/or keep your mouth shut. Do you research, test like crazy, and be willing to accept the results even if they’re not what you expected. Offer your professional advice and expertise, but only if it’s based on facts and experience. Don’t offer up your opinion if it’s just based on a whim (if you happen to be the target audience, you might be able to get away with this, but I would still caution against it.)

And, let the group know that you want their honest feedback – that you really don’t have favorites (even if you do), that these are just ideas. That way they’re not intimidated or afraid to criticize your work in front of you. If you need to, step out of the way and let them discuss – don’t leave completely if you can help it…you still want to hear their rationale, but just get out of their way. This seemed to work well for us, though I know there are a lot of creative teams that don’t work this way.

Take advertising agencies for example. My understanding (I’ve never worked in an agency) is that they have creative teams that present different ideas for advertising and then the client picks one. (Someone correct me if I’m wrong) So, they’re selling their ideas and trying to make the client believe them. It’s clear whose work it is and who will get credit (or not).  It makes me wonder if clients end up choosing ad campaigns based on the creative team’s justification of why they went in a direction, or if the clients just go with the people they like, not the ideas.

It seems too easy for people to find an idea and then convince others why it would be the best choice. I think the best choice should be based in research, experience, and facts – not a sales pitch from a creative director.

What if the client of that advertising agency brought in 50 of its best customers to listen to 3 different presentations? Do you think the outcome would be different for that client/agency?

Productivity

Imagine how productive we would be if we weren’t interrupted by advertising.

I’m doing some online research trying to get through it quickly and find what I need to know, but here, right next to my article I’m reading is an extremely distracting ad – lots of colors and movement – flashing lights, kind of. I find myself watching it to see what’s going on in the ad. Then I realize, this ad is literally interrupting my reading – why??? Is that the intention that advertisers have?

I ran into the same problem today on a fashion magazine site. Here I am shopping, looking for deals, maybe even inclined to buy if I see the right thing. But as I browse through different items, I get an ad about every 4-5 items that I have to ‘skip’ over. Seriously? I’m shopping on your site and you’re interrupting me from making a potential purchase? If I were the designers or vendors that have stuff featured on this site, I think I’d pay extra to not allow advertising. It’s such a pain – so I quit looking and went elsewhere.

Above all – don’t interrupt the shopping process. Great way to lose sales.