New JC Penney approach holds lessons for newspapers


If you can get beyond the screaming women in the television commercials, take a minute to tune in and listen to what JC Penney is attempting: to radically change the way customers shop their stores and digital sites. 

The company's approach is research-based and puts the four Ps — pricing, promotion, presentation, and product — front and center. And underlying the key tenets of JC Penney's changes are object lessons for newspaper companies.

First, using past sales data, the company looked at consumers' actual purchasing behaviour, and came up with what it terms “Fair and Square” pricing, which means shoppers can expect lower prices in stores at all times. To reach this conclusion, research showed 72% of JC Penney's revenue came from selling items priced at least 50% off. Thus, in the example cited in most recent news stories about the “Fair and Square” strategy, a T-shirt that had retailed for US$14 but typically sold — after markdowns — at US$6, would now be priced at a US$7 every day.

Part two of “Fair and Square” means monthly deals, and in the T-shirt example, the garment would now be marked US$6. The final piece of “Fair and Square” is called “best price,” which happens on the first and third Fridays of the month. Said T-shirt would now be marked $4, to clear out seasonal colours and bring in new merchandise. 

Newspapers' take on Fair and Square Pricing:
Take a look at your print home delivery circulation numbers over a set amount of time, say the past three to five years. Now add to the grid your main Web site's page views and uniques for the same timeframe. Layer on your main site's mobile page views and uniques. Take a hard look at your pricing for each platform to see if you are truly basing it, and packaging, on your audience's actual behaviours. And finally, make a long-delayed decision to eliminate discounting from your circulation department's business practices.

Many savvy newspapers, recently and notably The Oklahoman, have figured out this pricing approach, with a  “Full Access Print + Digital” bundle, aimed at reaching consumers with news, advertising, and information how they want it, when they want it, on the go. Their offer positions the print full access offer as the best deal for the money — “For those who need it all.” However, consumers can instead elect to buy a digital only package, with the full digital suite — including apps and archives. Or they can choose an a la carte option and purchase a single digital product, such as a tablet or smartphone app. Best of all, the subscription offers are logical, affordable, and the e-commerce site describing them is cleanly and attractively designed. 

Second, JC Penney will reduce its promotional "noise" drastically, from 590 promotions per year to 12. Yes, 12, with multi-million dollar campaigns, pleasingly designed and focused around important consumer events by month, such as Valentine's Day in February, or Mother's Day in May. In-store displays will feature color and design elements which match the month's theme, as will newspaper circulars and 96-page catalogs mailed to customers each month.

Newspapers' take on reducing promotional noise:
This is really nothing more than transforming the special section into an art form across platforms, a keener recognition that in your market, you can count on consumers' attention being focused on predictable things at certain times of the year. No brainers: Valentines. Graduation. Christmas, Hanukkah. Less obvious, but still on the minds of many at certain times of year: College selection. Sandwich generation concerns, such as safe housing for aging parents. Community events, such as Spokane's HoopFest, the world's largest 3-on-3 street basketball tourney. In what ways can these topics be leveraged to better serve advertiser and readers both, whether they're looking to our mobile sites while on the go at a hot summer basketball tournament, or having a thoughtful discussion about Mom over coffee and the Sunday newspaper?

Remember, there's promotion in the true sense of the word, and there's promotion to readers and advertisers about how to best use our products and services.

Third, JC Penney understands the evolving shopper wants special products with special shopping experiences from special stores. It should not go unnoticed that the stores' Sephora specialty beauty shops are outselling their main brand stores. And with very little promotion, almost all of it direct mail to current Sephora customers.

Plans call for more “stores within stores” at JC Penney, with 30 in active development and a Martha Stewart shop set to open in 2012. In a January interview with DailyFinance, Ron Johnson, JC Penney's new CEO, said shoppers are sick of “tired presentation” in stores and are done with wading through “an endless sea of racks.” Instead, Johnson said, shoppers want what he called "curated" and edited merchandise, not just a T-shirt on sale, from the earlier example. (Incidentally and not surprisingly, Johnson was a key player in Apple, Inc.'s wildly successful retail store concept, where shoppers take in Apple culture while bonding with fellow technology enthusiasts.)

Newspapers' take on the curated and edited concept:
Smart newspapers understand keenly the need to quickly develop and launch mobile offerings that have virtually nothing to do with their umbrella brands, as well as mobile and micro Web sites that are very much niche-focused and non-traditional.

There is no room and no desire from consumers for our sections or sites to remain a hodgepodge of “messy racks” with marked-down T-shirts for sale. There are countless examples from large and small properties worldwide. These include, but are not limited to: the social media-friendly Washington Post social news-reader on Facebook; the non-newspaper, a wildly popular, image-driven site where users create virtual bulletin boards on which others can “pin” items of interest; and even The Spokesman-Review's, a print, online, and mobile initiative designed to help people shop smarter, whether using the newspaper's manufacturers' coupons or utilising digital coupons saved on their smartphones for later redemption, at retail locations or online.

How will this all play out for JC Penney and us, too? Time will tell, but as with most things transitional, three things are critical:

  1. Making sure we examine the right metrics to make the most intelligent decisions about our future.

  2. Making sure our technology and e-commerce user experiences are state of the art and staffed by customer-focused developers. Flawless execution with trained staff who understand, embrace, and have the will to lead the way in a whole new world.

  3. Keeping it simple and make it easy for consumers and advertisers to do business with us.



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