JCPenney Returns to Sales Strategy Online, but Struggles Persist

One month after JCPenney fired top exec Ron Johnson and brought Mike Ullman back as CEO, the retailer reportedly says it expects year-over-year Q1 revenues to be down 16 percent when it reports to Wall Street next week. And in terms of purely online marketing, things don't appear much better. First, the (somewhat) good news. The Web shopping startup firm Hipiti shared some intriguing research regarding the brand with Adweek, suggesting that JCPenney has come a long ways in terms of reversing its controversial "no sale" or "fair and square" strategy. In short, per the New York tech firm, the brand is offering approximately two to three times as many specials online as it was last year. In other words, JCPenney is getting back to its marketing roots. But at the same time, comScore numbers for all JCPenney sites—including periphery properties like JCPenneyOptical.com—show that Web traffic still fell year over year during February and March to the tune of 14 percent, which is a number very near the previously mentioned sales drop. JCPenney's fiscal year started Feb. 3rd, and it will hold 2013 Q1 earnings calls on May 16. Whether the data from Hipiti and comScore proves to be telling in terms of the brand's e-commerce efforts for the first quarter definitely remains to be seen. Though Hipiti's numbers, accrued through the company's SaleTally system, seem insightful because they suggest that the retailer's return to price-strategy normalcy hasn't helped in the digital realm. Under Johnson's leadership, the department store chain first renounced deals at 2012's onset and then reintroduced them in time for holiday shopping, while, according to Hipiti, averaging one special offer every other day for the entire fiscal year. Hipiti states that JCPenney began advertising one online sale via Web or email every day in the first two weeks of its Q1 2013—once again, representing a reversal of its 2012 strategy. Within weeks, the digitally-delivered sales offers grew to three a day, per Hipiti, including one of JCPenney's most-lucrative deals in memory during early March—a $10 off on purchases exceeding $25 for online and in-store. It later started offering $10 back for orders above $50 and continued with similar sales/discounts through the end of the Q1, according to the tech company. Though Johnson, the former Apple retail exec, was fired in early April because sales continued to be depressed—if not disastrous—compared to a few years ago. What's more, in the last six weeks, according to Hipiti co-founder Rama Katkar, JCPenney—for the first time in more than a year—began posting discounts on its 3.6-million-fans-strong Facebook page. "We feel this was important for the brand because all of its competitors like Macy's and Kohl's were using that tactic for the last several months," she said. Meanwhile, all the evidence seems to point to the tough work that reinstated JCPenney CEO, Ullman, has in store going forward.

Brand Marketing

JCPenney Returns to Sales Strategy Online, but Struggles Persist

Retail giant now pitching three deals a day, per researcher

Christopher Heine

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Christopher Heine