Penney Seeks ‘Really Cool’ Status

Discussion
Jan 04, 2006
George Anderson

By George Anderson

Anna Garlington didn’t expect to buy anything other than underwear for her daughters when she visited her local J.C. Penney, reports BusinessWeek. But, she had a coupon
in hand for a pair of gauchos and she thought she’d check them out. Her response after inspecting the item was exactly what the company wants to hear whenever its name and brands
are mentioned: “Really cool.”

Penney CEO Myron “Mike” Ullman sees big things ahead for the chain and believes the company’s strategy aligns perfectly with the market opportunity.

For one thing, said Mr. Ullman, consumer demographics are on Penney’s side. “Forty-two percent of consumer spending is within our target market,” he said.

The company has also embarked on a differentiation strategy that is more like a national brand strategy than typical private label positioning. Mr. Ullman is looking to use Penney’s
private labels to connect emotionally with consumers. “We looked at them more as labels,” he said.

This core branding strategy was started by his successor, Allen Questrom, and has been built upon during Mr. Ullman’s tenure. According to BusinessWeek, Penney has divided
its fashion merchandise to fit four basic fashion preferences: conservative, traditional, modern and trendy. By dividing assortments along these lines, the retailer has been able
to directly appeal to shoppers who typically go to specialty stores for their clothing. 

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9 Comments on "Penney Seeks ‘Really Cool’ Status"


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Jeff Weitzman
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Jeff Weitzman
15 years 1 month ago

Good for Penney. While I would argue that a teenage girl’s mother thinking a certain pair of jeans are “really cool” is tantamount to a guarantee that said daughter will consider such jeans anything BUT cool, Mom’s got the credit card, right?

Don Delzell
Guest
Don Delzell
15 years 1 month ago
JCP’s attempt to become a destination store for teens is yet to be determined a success or failure. From my perspective, their approach in convincing mom to shop there, while eliminating the anti-cool factor for the teen makes a great deal of sense. What is Penney doing right? …aside from an obviously integrated business plan, with synergistic advertising, in-store merchandising, assortments and pricing? I think they are retaining good people, empowering them, and creating a culture of success and creativity. From what I’ve heard on the “inside,” this is a company where controlled risk taking is encouraged. Systems exist to protect, guide and control the natural instincts of aggressive merchants. Senior executives focus on their role, and expect and empower other levels to do theirs. Often retaining personnel is NOT a success criteria. In the case of JCP, it is. The only way to have success in shifting consumer perceptions is to establish a vision, create the road map, hire the right people, give them the right tools, and then stay the course. JCP is… Read more »
Mark Lilien
Guest
15 years 1 month ago

Penney’s, like Target, Barnes & Noble, and Borders is one of the few nonluxury retail chains where customers don’t have to be humiliated to shop. Example 1: The ads are honest, not misleading. No dog-eat-dog limited supply doorbusters that start fights. No “everthing’s on sale except these items that are 75% of the store’s assortment.” Example 2: The in-store staffing is reasonably appropriate in terms of quality and quantity. Example 3: Internet purchases are easy and shipped quickly. Penney’s provides gracious service because its private label margins are decent, yet provide customer value. And the management, top to bottom, is competent. It’s a shame this combination of decent management, reasonable margins for the customer and the retailer, and a decent shopping experience, is not exhibited by dozens of other major nonluxury chains.

Len Lewis
Guest
Len Lewis
15 years 1 month ago

This is a chain that’s really coming back by placing the emphasis on fashion apparel and accessories.

There was a time, not too long ago, when analysts and a raft of retail consultants were about to close the lid on J.C. Penney. I think they were premature. Penney is going after a younger, more affluent–at least higher spending–demographic and could give Target’s cheap chic a run for the money. I was in several Penney stores during the Christmas season and saw a lot of shoppers you would expect to find in Target, Macy’s Bloomingdale’s and Nordstrom.

Granted, the holiday season–with all the sales, couponing and other sales nonsense–is not the best of time to gauge a retailer’s long-term potential. But looking at the merchandise, in-store execution and pricing indicates they bear watching.

Carol Spieckerman
Guest
15 years 1 month ago

I admire J.C. Penney’s tremendous focus during a time when distractions sent others veering off their course. They began embracing boutique brand concepts when other retailers were still figuring out whether or how to do it and their decision long ago to keep their catalog division proved to be prescient as retail moved online (oops, Sears!). J.C. Penney has a tremendous opportunity to keep their cool by developing Bisou Bisou and Mixit into trend brand monsters (much as Arizona has been in denim).

Santiago Vega
Guest
Santiago Vega
15 years 1 month ago

We have said it before: J.C. Penney had the vision and the guts to differentiate itself from its rivals. That’s where you have to start.

Sadly though, most other traditional retailers don’t yet grasp the necessity to find their niche, to be distinctive, and they are becoming painfully predictable.

Under the direction of Mike Ullman, who arrives from the luxury sector where innovation and maintaining the creative independence of each brand are imperative ingredients to surviving, we can expect J.C. Penney to continue to lure customers with a revived and relevant merchandise mix that speaks to different groups of their targeted clientele.

Michael Tesler
Guest
Michael Tesler
15 years 1 month ago

Penny is in the right place at the right time. Department stores are consolidating and due to the merger, closing in some locales. Sears/Kmart is struggling to find a new post merger identity if that is possible. Wal-Mart is being attacked by unions and negative publicity. While all this and more is going on, Penney continues to stay focused as mentioned and continues to “clean up their act” as mentioned. That said, Being cool to a mother buying underwear for her daughters (the example given) does not make the store cool for the daughters…in fact in my experience in generally does just the opposite. Also I do not think a store can easily relate to the young and Boomers at the same time. To thrive in the long run I think they must become even more focused and become more of a niche retailer and pick one area and target market and become “the best” with that merchandise for those people.

Stephan Kouzomis
Guest
Stephan Kouzomis
15 years 1 month ago

Penney has reinvented itself as a chic clothing shop
for the young and the Boomers. And the grocery industry should
take a page from Penney’s marketing plan on “consumer
positioning.”

Penney, smartly, did its transformation while a crowded
competitive market was “wheeling and dealing”!

Penney didn’t discount as much because of its new image
and positioning to the target consumer.

Bernie Slome
Guest
Bernie Slome
15 years 1 month ago

I recently read an article that said “there is an over-saturation of retailers. There are only two ways to increase market share; either take it away from their competition or increase the transaction size.”

Obviously, the Penney strategy is to take it away from the competition. By getting a positive reaction to the new merchandising, they are beginning to create a good customer experience. Customer experience is still made up of sales (customers buying merchandise they like) and good customer service (what the customer perceives as service). If Penney combines the sales + customer service they will start to take business away from their competition.

Marketing gets people into the store. “Really Cool” gets them there, the rest is whether or not there is a good customer experience. For without it, the customer will not return to buy again.

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