Roger Saunders

Penney to Switch to EDLP?

January 23, 2012

FROM RETAILWIRE:
According to reports, J.C. Penney will shift from a high-low pricing model to something closer to everyday low pricing (EDLP) as a central thrust of its reinvention under new CEO Ron Johnson. Should Penney switch to an EDLP model? How will Penney's stores and marketing have to be reinvented to enable the EDLP model to succeed?      [more...]

Smart move on JC Penney's part. They are taking their queue from the consumer.

Penney's shares its customer base more with Kohl's and Target than they do with Macy's or Walmart. Their core customer is a bit older than Kohl's and Target, and fractions of years less education than these two retailers, based on the BIGinsight Consumer Intentions & Actions (CIA) Survey (14.3 years vs. 14.6 years for Kohl's and Target). In other ways -- purchase behavior, credit card and payment plans, attitudes, and future spending plans, and searching and shopping online -- the Penney's customer has patterns like Kohl's and Target.

The EDLP strategy should support Penney's trip frequency. At the same time, the shift should help with the in-store experience, as the consumer steps to the "moment of decision".