Retail is Reality (Part 1) | American Drycleaner

PRICE NOT MOTIVATOR
Take the case of the retail icon JCPenney (JCP) as they went through a very visible and very publicized disastrous transition to “Lower Everyday Low Pricing.”

According to a September 2013 article by Panos Mourdoukoutas writing in Forbes: “What haunts JCPenney? A strategic mistake regarding its pricing strategy — replacement of sales through coupons with everyday low prices.”

He opines that, “JCPenney’s strategic mistake comes from a misunderstanding of an important difference between itself and Apple stores: Hype! Apple’s word-of-mouth (WOM) and ‘buzz’ marketing machine and unique products already hype customers heading for its stores. They know what they want; they don’t need conventional sales promotions to be lured to the stores.”

But JCP doesn’t have a similar marketing machine, and its products aren’t unique either; they are carried by Macy’s, Kohl’s, Wal-Mart, and Target, he writes.

“This means that JCP’s customers have yet to be hyped (according to customer feedback). Boutiques/streets, Wi-Fi, juice bars with smoothies and coffee — no long-term customer of JCP cares about all that. JCP got away from what it did best.”

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Retail is Reality (Part 1) | American Drycleaner.