Defensive Strategy

J.C. Penney Retreats

8 Jun 2012  

J.C. Penney is in the midst of a major transformation. As I noted a couple weeks back, the company is moving away from its reliance on discounts; J.C. Penney has lowered everyday retail prices and is doing less price cutting. This year the company stopped using the word sale entirely, instead focusing on what it called “month-long values.”

Results have been grim and J.C. Penney is now retreating, at least a little.

CEO Ron Johnson this week announced that the company would start using the word sale again. He said, “We’re moving away from the word ‘month-long value’ because no one really understood that, to calling it what we intended to do, a sale.”

The big question remains: will J.C. Penney continue to retreat, once again embracing deep discounts, or will the company stick with the basic plan?

A lot will depend on results; if sales don’t stabilize quickly this week’s announcement will be just the first step.

1 Response

  1. I’m struck by how directly they are focusing on the issue of “sale” vs. “no-sale” when the better question is one of identity. If all customers identify with is that J.C. Penny is a low cost provider of discounted items, the organization needs to consider how it is perceived in the marketplace and reshape that conversation through storytelling. If indeed their greatest asset is their discounts, then this is the major issue, but don’t they have other assets worth amplifying?

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