Penney Taking Bigger Cut of B-T-S with Free ‘Do’ Offer
I never would have "re-imagined" in a hundred years that the offer of a free haircut for kids would actually get consumers to shop in a store they’ve rarely or never even considered visiting before. But, by the ghost of James Cash Penney, it appears I may have been wrong.
Although the evidence is largely anecdotal at this point, J.C. Penney’s ad campaign promoting free haircuts and its new "Shops" concept featuring back-to-school fashions from Levi’s, i jeans by Buffalo and The Original Arizona Jean Co. appears to be working.
According to The Joplin Globe, 160,000 free haircut appointments had been booked at Penney salons heading into last weekend. With 980 salons across the chain, that’s roughly 163 appointments per store. How many of those appointments are either new customers to Penney or returning shoppers who increase their spending will be the keys to evaluating the success or failure of the promotion.
Count Candace Garza among the consumers who like the free haircut offer. Ms. Garza, who has three young children, told the Odessa American that she learned of the promotion from her mother and proceeded to call family and friends in and out of state (Texas for her) to let them know about the deal.
"Words can’t even describe how great of a thing it is," she told the paper.
According to Deloitte’s 2012 Back-to-School Survey, television and word-of-mouth will have the biggest influence on what consumers purchase this year.
Fans of Motown and cute kids are almost certain to be drawn to Penney’s haircut spot while personal experience tells me that Ms. Garza’s experience is shared by others. On a trip to a local deli in this part of New Jersey last weekend, I overheard two women discussing the Penney free haircut deal and how they too had spread the word to family and friends. It’s no secret that word-of-mouth is a big deal in retail and maybe, just maybe, it’s a piece of good news for a chain that could certainly use some.
Discussion Questions
Discussion Questions: Do you think that the reaction to J.C. Penney’s free haircut offer is a sign that the chain is getting its business act together? What do you think Penney needs to do as an encore to build on the goodwill created with its back-to-school campaign?
The free haircut offer is an indicator that the “Town Square” strategy of drawing traffic through event marketing has a chance to be successful. It’s one of the few “calls to action” that JCP has unveiled since its new strategy was announced earlier this year. This may be just in time, because the second-quarter results to be announced this Friday are not likely to be pretty.
As the article points out, the biggest question is whether the added foot traffic converts to added business. I shopped a JCP store last Friday (in Rockford, IL) and I don’t want to draw too many conclusions from one store visit, but there was more traffic than I had seen for months. However, customers were shopping clearance (it was “Best Price Friday” and the store was loaded), not the goods in the new shops. There were lines at the register that was open — take that as a positive sign if you want, or as a disappointing lack of customer service.
The “free Do” is a very creative idea. Kudos to the JCP folks.
Is it a smart merchandising strategy? You bet.
Is it (part of) a sustainable retail strategy? Hardly.
No, I don’t think JCP free haircut offer is a sign they are getting their act together. It might be a good deal for a family with children. First, haircuts are not expensive and probably not worth the gas of driving to a JCP. Just how good could a stylist be, that works at JCP? I suppose you can’t go wrong if your boy gets a buzz cut.
Personally I go down to the Mexican barber shop, staffed with pretty girls who give a great hair cut, shave, and at a low price. Sure they are unlicensed and undocumented, but the quality and service can’t be beat. I’d much rather pay and tip them than take my chances at JCP. In the end you get what you pay for.
This is a great promotion. For relatively little money, Penney has gone viral. People are talking about the haircut offer and snapping up appointments. If consumers, while they are getting free haircuts, find that Penney has quality products at value prices, its a win for Penney. The offer may bring back former customers, while new customers, who have not had a averse reaction to Penney’s new pricing structure, might become regulars.
I think the haircut offer is brilliant. I am beyond the back to school haircut days, but when I saw the first commercial it triggered that emotional connection with “cute” and “necessary” and “free at J.C. Penney.”
If JCP can leverage other kid and adult type of promotions to bring shoppers to their stores the circle of new life for JCP will be well on its way. Imagine free pictures to go with Halloween costumes bought at JCP; free Valentine cards for moms, dads and kids…with every Valentine gift, etc. This is definitely not my strength, but I look forward to more great promotions from J.C. Penney. Maybe one of them will get me in the store as well.
It’s a great tactic. A simple gesture that shows customer empathy, and drives an extra visit. I think I saw Bob TheRetailDoctor Phibbs in there getting a haircut this week!
One word — AWESOME! Good for the customer and great for JCP. The cost of acquiring a new customer via a free haircut is less than the deep discounts that previously drove traffic.
Not sure if the model is adaptable to other seasons — only time will tell, but I bet you will see more of the same next year at other retailers.
Well, it’s a sign that they came up with an offer that resonated, that hopefully doesn’t cost JCP too much (or the hair stylists in their salon — sometimes the tips aren’t all that great on “free”), and hopefully converts to more sales.
The only thing to keep in mind is that’s a lot of “hopefullies, and at RSR we are fond of saying that “Hope is not a strategy.”
Providing free haircuts as kids are getting ready to go back to school is a great way to get those consumers into the store. If they actually shop the rest of the store it will be a great tactic. If consumers come for the free haircuts and leave it will not help JCP’s sales but it may still build goodwill.
Amid all the hubbub of lost sales and fewer store visits (and JCP’s admittedly awful initial marketing campaign) we tend to forget that re-inventing a chain often involves alienating existing customers. It takes time for your new customers to find you.
Stock market analysts have remained reasonably bullish on the new JCP because they understand this simple fact.
So whether it’s the free haircut, sharper prices (or clarity around what those prices are), or the evolution of the company, sales and visits are starting to come back.
Unfortunately, the “encore” may well be derailed by an incredibly erratic economy. If the economy stabilizes, JCP should do well. If not, well…we’ll have lots more to write about.
JCP leveraged the most effective word in advertising — FREE! Given the depth of dis-enfranchisement rendered since the now infamous change in merchandising and marketing strategy on 2.1.12, it is about time they did something right.
Let’s give Ron Johnson credit for one additional thing. He sent an e-mail to me and millions of other loyal or perhaps once loyal customers giving a state of the brand, that big changes are coming and asking for feedback. Yes, you can send a note to the CEO and share your thoughts and observations. I did, and will let you know if I get a response — hopefully not a template reply and most assuredly not a coupon thanking me for my input!
If you’ve been following me on RetailWire and other business blogs, I have had no lack of opinions and suggestions as to what they have done right and mostly wrong. With change comes risk. They tried something dramatic and failed. In my view, predominantly let down by poor creative execution. The new spots running now with BTS basically over in most of the country are both likable and have amazing color/fashion appeal. It’s late in the game, free haircuts are not going to overcome weak comp performance — but it’s a start.
Anything free is a strong offer, and always likely to draw traffic. Free haircuts for Back To School is a sure winner.
However, it is certainly an expensive promotion, not likely to pay out just based on increased store traffic. Most importantly, it is not a sustainable strategy for JCP.
They can use these types of events to effectively reintroduce shoppers to the new JCP, but they have to deliver on the actual product line, price/value, and shopping experience to be successful.
Thx Jason, I was there, but few others. 100% off still smells like a discount to me.
It’s a good way to generate traffic, but how many of the 160,000 visits ended in a purchase? If conversion surged, then I would say it was a success. If not, they should probably try getting people interested enough in their offerings to use the fitting rooms.
If they want to try revenue generating freebies, they would be better off with a try-on promotion. Try on a pair of Levi’s and get a discount on purchase, or something like that. While the customer is in the fitting room they are 70% likely to buy and they are prime for add-ons if service is provided.
So while I get the holistic approach that JCP is taking, I think they should work on the improving the basics first before they get wrapped up in the fluff.
From a “Main Street” business revitalization standpoint, “free” is usually a bad thing. I haven’t seen the ads or the offer, but “free with purchase of $25” is a lot better.
But yes, the idea of event marketing and programming is the way that department stores will have to go to improve the experience and experiential qualities of the shopping experience, to remain relevant.
Of course, it’s back to the past, since (department) stores as theater is the history of the industry, especially in the mid to late 1800s.
Anything free is a strong draw for consumers, they’ll get their freebie and leave. My local J.C. Penney was closed at 7:30 p.m. on tax free weekend (Aug.3-5) when they usually close at 9:00. What, no extended hours? No good for business.
There are many great (i.e., profitable) ideas that are hard to imagine working. And many poor (i.e., unprofitable) ideas that intuitively seem like a lock. Customers are tricky that way.
The key is to have the right analytics to test and learn how consumers really behave in these types of offers. On this offer, I’d want to know: how many of the haircut visits were truly incremental? How did basket size change on these incremental visits — or even on trips that would have been made anyway? Is there a halo with customers coming back after the free haircut when they experience the new Penney’s? Or, did we actually pull customer visits forward in time into the free haircut period?
It’s great that Penney’s is trying innovative and creative new ideas. But success will be dependent not just on implementing the ideas, but on figuring out which small subset of all the innovation ideas will truly drive the company back to success.
The only way that the free haircut offer signals JCP getting its act together is if it gets customers and prospects:
1) into the store
2) to buy something
3) to return based on the experience without an offer analogous to a a free haircut.
JCP deserves credit for trying to reinvent itself and retail, but so far their execution has been poor. As has been said, “Better to have a fair strategy well-executed than an elegant strategy botched in execution.” Of course, while we’re biased to great strategy that is informed and built for execution, it’s important to recognize what a challenge that is, as JCP knows all to well. JCP continues to be a fascinating case-study in the making.
It seems that it’s been successful at attracting people who don’t just want 50 or 60% off but want — as Bob noted — a full 100% off…count me as underwhelmed (at least until we can move past the anecdotal phase into real sales numbers).
JCP must win back the shoppers who have strayed. Getting their attention is the crucial first step to getting people into the stores. But moving shoppers to purchase is a huge hurdle — will the new pricing strategy translate into strong sales during this critical buying season? The incentive to shop selected departments must be clear and help rebuild store loyalty with the new value proposition, not just another sales promotion. Building loyalty is a longer term strategy that must be clearly communicated, consistent and well executed.
Innovative, yes. Chop a few dollars off of the BTS spending? Parents will love this. Young kids, sure. But teens? I fear the girls, (in particular) who come to school with “JCP-dos” will not be bragging about it. Every girl who gets a cut should get a voucher for a free BTS makeover in the s-i-s Sephora… that’d be cool.
Can’t believe a promotional idea from JCP is actually working. The hair salons have always been an ace in the hole for them, but neglected in recent years. If you think about it, they, along with their old optical departments, were their first “stores within a store” operators. DUH. They should have thought about this promotion a lot sooner.
JCP’s Ron J. is trying to change faster than their shopper to create a new type of image and recurring demand. They may be moving too fast. If you move too fast with promotional efforts it can lead to the shopper always expecting more. JCP will have to carefully evaluate the speed of change issue.
With BTS JCP needs to exhibit the one place provider image — meaning get your kids all the things that they need for school at ONE place, at a good price, and the right style for the little monsters.
My parents did this for me back at Sears and the style part was never included…but my flare pants looked cool — even thought they were green with thin black stripes and too short. DUDE or DUD?