Since I work at a competing store, I decided to click on this article about JC Penney’s decision to change their sales strategy. I am kind of floored. And confused.
Basically, they’re doing away with weekly and monthly sales. Starting soon they’ll be depending on a storewide price cut to at least 40% off to draw in customers to their (often times shabby) stores. The holiday season seems to have drained their profit margins with massive discounts to compete with stores like Khol’s, Macy’s and Dillards.
The decision doesn’t surpise me since I’ve seen their reported numbers, but the strategy just doesn’t make any sense to me. Customers are looking for huge discounts, precieved or real. 40% is great, but not compared to a 50%-60% bi-monthly sale. Yeah, this plan will simplify shopping for customers who don’t want to keep up with who’s got what for what price when, but that kind of takes the fun out of shopping.
Can JC Penny really hold on with this new plan, or should they be taking a look at what else is holding them back?