J.C. Penney Will Soon Start Selling Some Items for Only a Penny
J.C. Penney (JCP) is betting that a play on its name to evoke enormous deals will boost sales.
The department store announced on Thursday it would sell some of its store-brand items for just a penny, as part of a new marketing campaign called “Get Your Penney’s Worth” this spring.
Penney will start with items from its $1 billion Arizona brand, with some promotions being “buy one, get one for a penny” while others will cost 1 cent without another purchase required. The idea is to help customers discover Penney’s store brands, which in addition to being exclusive merchandise, also offers Penney higher profit margins.
In the cover story of the current issue of Fortune, CEO Marvin Ellison made it clear that these brands, which also include names like Liz Claiborne and St. John’s Bay and make up more than half of J.C. Penney’s revenues, are at the center of his turnaround plan for Penney. The retailer outperformed Macy’s (M) and Kohl’s (KSS) during the recent holiday season, but revenue at Penney remains about 37% of where it was a decade ago.
“The launch of this new brand promise underscores our strategic focus on building private brands and revenue per customer to create sustainable loyalty,” said Mary Beth West, chief customer and marketing officer, who came on board last April after Debra Berman’s short term as CMO.
Penney has wholeheartedly embraced discounting and promotions in its turnaround strategy, but it will be interesting to see whether 1-cent items are a step too far in the direction, eroding brand perceptions. The first Penney Days event starts on Monday.
The campaign replaces Penney’s “When it fits you feel it” campaign that Ellison didn’t care for. “It’s not a bad message, but the problem is you can interpret that many different ways, like it doesn’t fit, or I can’t find my size,” Ellison told Fortune in a recent interview.