In a bid to reverse some major losses in the second quarter, JCPenney is cutting back on its television spend.
Speaking to investors during the company’s earnings call last Friday morning, JCPenney CEO Ron Johnson acknowledged that while the retailer’s marketing push “got a lot of attention…in many ways, it overreached.”
Penney in the first half of the year “spent [its] marketing money in the wrong way,” Johnson said, adding that the media fix included “too much TV [and] not enough print.” The retailer essentially went dark in July, canceling a catalogue that was printed and set for distribution, and yanking its scheduled TV run.
“We turned off television,” Johnson said. “The whole goal was to pause, take a moment, rethink how we communicate our value strategy and how do we get the customer to love where we are headed.”
Print will be the biggest beneficiary of Penney’s new media strategy as the company shifts from building its brand to drawing more people into its stores. “In the entire spring season, we only ran 11 preprints in the newspaper. We have eight for August and have 30 for the back half,” Johnson said.
The pumped-up print budget will necessarily take a bite out of the retailer’s TV spend. “We’re reducing the money on television,” Johnson said, before adding that a new back-to-school spot will promote an offer of free haircuts for kids in kindergarten through sixth grade.
“We re-edited all of our television from August in a call-to-action,” Johnson said. “So, if you look at our television commercials, they announce things like free haircuts or they include the brands…like Levi’s.”
In September, the company will roll out some new TV spots designed to communicate its new pricing model. While Johnson mentioned the plan to reduce TV spend more than once, he did not elaborate on how deep those cuts would go.
Penney in 2011 invested $289.1 million in TV inventory, a figure that amounts to 65 percent of its overall measured media spend. In the same period, the company spent another $124.5 million on print.
By comparison, Penney rival Macy’s last year spent $263.7 million on TV and a whopping $506.5 million on print. Newspapers accounted for 85 percent of Macy’s print budget.
The retailer reported a Q2 net loss of $147 million, off from a profit of $14 million in the year-ago period. Revenue tumbled 23 percent to $3.02 billion, marking the lowest quarterly sales in more than 20 years.