Attention J.C. Penney shoppers: The department store plans to run sales again. The department store chain, which had eliminated use of the term while trying to sell consumers on its new "fair and square" pricing strategy, is going back to using the word because it works.
CEO Ron Johnson told attendees at a Piper Jaffray investor conference that substituting terms such as "month long values" in place of "sale" was "kind of confusing" to the chain's regular shoppers. So, from this point forward, Penney will call a sale "a sale" and nothing else.
"They realized the word 'sales' drives consumers to stores," Alexander Chernev, associate professor of marketing at the Kellogg School of Management at Northwestern University, told Reuters. "Even if you redesign your stores, you still have to drive traffic to stores."
While Penney intends to go back to using the term "sale", there's no doubt that it will run far fewer than in the past. The company intends to run 12 a year versus "590 events" annually before Mr. Johnson took over.
According to an Advertising Age report, Mr. Johnson said the department store would continue to invest in getting its "pricing message across," but that it would cut its advertising expenditures moving ahead. "We've got a model that isn't as advertising dependent," he said.
How much more or less effective will J.C. Penney's events be with the use of the word "sale" instead of "values"?