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The JCP Mistake

The departure of JCP President Michael Francis after just eight months on the job is the latest fallout from the retailer’s questionable new marketing strategy and ad campaign. Factor in other indicators – including JCP’s well-publicized 20 percent sales decline in the first quarter and the onslaught of negative customer feedback on its social media accounts – and it’s clear the consumers have spoken.

But why the reaction? After all, the ads are fun and memorable and they certainly had plenty of media weight.

In a word – strategy.

Let’s say you had a creative brief for the campaign, and it contained the old standby “What are we trying to convince consumers of?” In this case, JCP believed that eliminating sales, discounts and price promotions in exchange for an everyday low price structure would convince customers that they needn’t wait for a coupon in the mail to get the best deal.

Here’s the rub – CEO Ron Johnson publicly admitted that they didn’t perform any concept testing with consumers. Had they done so, I think they would have discovered that:

JCP customers like sales, discounts, and price promotions. The new strategy was disincentive to them.
Non-JCP customers don’t embrace the new pricing philosophy as a reason to shop there.

Using myself as an example, I have not been in a JCP for years, which means I should be a target consumer for this new campaign. But there are two big problems. One, an ELP strategy doesn’t resonate with me, largely because as a non customer, I didn’t know they didn’t have an ELP philosophy in the first place. Two, the reasons I don’t go there – my perception of old ugly stores, a boring selection of goods, and a brand I do not want to associate with – were not initially adequately addressed (although JCP recently announced plans to better explain its “merchandise initiatives,” including new and transformed brands and a reinvented in-store experience).

Too little too late? Maybe. This is definitely a case where some consumer investigation using a small sample of loyal, marginal and non consumers would have exposed the problems with the strategy well before the numbers did. Cult just initiated an insights “sample pack” in which we demonstrate our entire process with a limited number of consumers.  After the initial insights and findings are presented, the client can choose to green-light the complete process to validate the findings and insights.

Hey JCP, that would have saved you a few hundred million large.