J.C. Penney Case Study - Chloe Bacotchloebacot.weebly.com/.../1/.../jcpenneycasestudy.docx · Web...

J.C. Penney Case Study

The University of North Carolina at Greensboro

Chloe Bacot

11/11/2013

Chloe BacotJCP Case Study

Part 1: J.C. Penney Case Study

J.C. Penney is making news for their loss of market shares. In 2012, the company hired a

new CEO, Ron Johnson, and the former Senior Vice President of retail operations at Apple. He

used techniques from Apple’s marketing strategy and applied them to J.C. Penney. This

approach failed miserably. Johnson has been replaced by J.C. Penney’s former CEO, Mike

Ullman, who is charged with rebuilding the name, regaining old customers, and enticing new

shoppers.

One generation J.C. Penney can attract to regain market share is the millennial

generation. The strategy for regaining market share is to specifically target young men by giving

them an inexpensive way to gain quality garments that are classic yet trendy. J.C. Penney will do

this by using Omni-Channel retailing. Omni-Channel retailing is "an integrated sales experience

that melds the advantages of physical stores with the information-rich experience of online

shopping" (Hitchcock, 2013)

Millennial Generation:

The millennial generation ranges in age from 18 to 34, all of whom grew up with the

internet and the rapid growth of technology. This generation alone is expected to spend $2.4

trillion in 2015 (Schawbel, 2013). The millennial generation is passing the baby boomers in

growth with a population of 79 million. The majority of this generation is enrolled in school or

has graduated college. They have a desire for products that are customized and fast, yet

inexpensive. Having technology such as smart phones, millennials are able to get instant

gratification. Sixty-three percent of this generation stays updated on brands and products through

social networks (Marketingcharts, 2013).

The millennials have grown up sheltered and team-oriented, but knows they must be

competitive to be successful. Young, innovative, resourceful, loyal, and tech savvy, these teens

and young adults make an effort to express individualism, and they want things customized to

their lifestyle. They enjoy making a difference in the world. Their mindset, while shopping, is

affected by technology, and they want to find the best deal and find it fast. They utilize the

internet to their advantage to find the best deals at a fast speed. Yet, this dependence on

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technology to stay abreast of the latest trends counters their desire for uniqueness. The Millennial

Market is trend driven due to their interest in keeping up with the latest innovation or gadget.

Target Customer:

J.C. Penney is hoping to reinvent the company and gain the millennial generation’s

loyalty. The millennial customers I’m targeting are males between the ages of 18 and 22. This

age group lies in the middle of the generation, is seeking employment and/or is currently in

college, making over 25% of them in or expected to be in debt after graduation. This age group is

innovative. Having just reached adulthood, they want to be the best, on top, and have the newest

thing. They are environmentally friendly and want to shop locally to support local companies.

They are smart shoppers, and they are known to be loyal to their favorite stores. Seventy-seven

percent of them are registered for a loyalty rewards program (2012, Bedtimes).

James is the new brand at JC Penney for the millennial male that wants a sophisticated

look with and individual edge and professional name with a nod to the founder of J.C. Penney,

James Cash Penney.

Why Shop at JC Penney?

This Millennial Market male consumer will shop at J.C. Penney because the store has a

long history. With its history, name recognition, product assortment and price point J.C. Penny is

an American success story much like the Millennial Generations searches for. J.C. Penney

carries a diverse and wide selection of apparel that appeals to all styles and body types. If this

customer’s shopping experience is positive, he will return.

James will face Macy’s, Target, Pac Sun, and online flash-sale shops as competitors. The

apparel these guys want is at Urban Outfitters, J. Crew, and Nordstrom, but they simply cannot

afford to shop at these stores. Due to life choices of education, loans, and/or renting a home, they

have less disposable incomes than other generational cohorts. Now that these millennial males

are almost on their own and are not being fully supported by their family, they still want the

same trendy and quality looks but at lower prices.

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J.C. Penney is a large department store and is located all over the country. This customer

will shop there for convenience. J.C. Penney carries Levi’s, Dickies, Dockers, and Nike, which

are a few brands this Millennial Market purchases. Despite their use of technology, these price

conscious buyers want to see how their clothes fit on them, so they like trying on their clothes

before finalizing the purchase. Acquiring their business at this point in their lives is critical as

this market is very loyal and will return to make future purchases.

In order to cultivate loyalty, J.C. Penney should begin by addressing store layout and

brand displays. The current layout of J.C. Penney is divided by brands, each with its own floor

display. This display method is unsuccessful because the clothes seem distant from the shopper.

Also, the garments displayed looked out of date, ill-fitting and mature. The one exception is with

the Levi’s brand and its display, which is on the right track. Levi’s are displayed at the bar table

where guys can sit around and use an iPad to pick out their perfect fit. This display and layout

featured an important element, the integration of technology to aid with the purchase. This

Millennial Market likes their technology and being made to feel special.

The new line J.C. Penny will carry is James, and would be in the JCP section, J.C.

Penney’s own line. Currently, the JCP private label brand carries basic key items and at a higher

price point than James. For example, JCP line starts at $25 for a basic tee increasing to

approximately $50 for a pair of chinos and to $65 for sweaters. James would carry shirts starting

at $12, jeans and chinos at $35, shorts at $20, and cardigans at $15. At these price points, we not

only create an appreciation for value in this clothing line, we are potentially cultivating life-long

customers who will continue to shop at J.C. Penney.

The young males will choose James over other brands because offering skinny-fit cut

jeans appeal to this physically conscientious consumer. The cotton lining on the pants conveys

value, but also provides an additional element of fashion for this market. As these jeans will

provide another dimension with these “wear & tear patterns” that will allow the lining to show

through and reveal the pattern underneath the jean. Another feature for this affordable, quality

jean is having the lining reversed near the bottom of the leg to allow guys to fold the bottoms of

these jeans up to form a cuff and reveal the pattern of the lining.

SWOT Analysis for JCP:

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James will stand out in JC Penney and is just what the store needs. The main weakness

for this line is attracting this demographic to visit the store. With use of Omni-Channel retailing

this can be done, and James can be the most profitable line in the men’s department.

Strength

Large Population

Will appreciate the inexpensive prices

Individualism of jean with lining

Create value for consumer

Have the desire to dress well/follow trends

Connect to potential loyal customer base

Weakness

Not much disposable income

J.C. Penney is not known with this

age group

Must create interest in visiting J.C.

Penney stores

Opportunity

Make inexpensive clothing, with high quality

On the rise designer brands that cater to

everyday wear

Entice young men to shop at J.C. Penney

Build a name for J.C. Penney

Threats

Competitors: Macy’s, Target, Pac

Sun, Online Flash Sale Websites

Advertising through Omni Channel

retailing can be expensive, leading to

a loss of profits

The Line:

J.C. Penney’s casual men’s line for spring/summer 2014, James, will include jeans, pants,

oxford shirts, t-shirts, and cardigans. These products are included in the line because of the

simplicity and style to appeal to younger male consumer. This target market wants to look good

for every day, and maintain their individuality. JC Penney is the perfect alternative to more

expensive stores because it offers multiple patterns and large stock quantities of merchandise.

This variety ensures customers won’t worry about peers buying the same item.

The James line of pants are offered in a skinny and straight fit, and will be made four

inches longer than the typical pant to be able to fold and cuff the jean to show off the pattern

underneath. The shirts will include button ups, and T-shirts – all with a slim fit, a top left pocket,

and the options of pattern accents on the pocket, collar, and sleeve cuff. The garments will come

in a variety of solid colors and patterns consisting of dots, stripes, Navajo, camo, dinosaur,

beetle, and paisley. Cardigans will be offered in a variety of solid colors listed in the chart below.

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The basic t-shirt will be made soft to the touch and casual. All high quality garments and are

appropriate for the everyday lives of these young men. James will not have any outside logos

except for the “J” marked on the collections buttons.

Garment Chart:

Color Options For All: Choclate Brown, Medium Rare,Mustard Seed, Burnt Orange, Merlot, Mauve, Full Moon, Cerulean, Sandy Lagoon, Balooga White, Ocean’s Crest , Reptar Green. Pattern Options for All: Camo, Dinosaur, Paisley, Stripes, Beetle, Navajo, Plaid, Maps, and

Dots.

Apparel Item Fabric Fits/Styles

Pants Denim stretch, cotton

lining, cotton(chinos)

Slim fit, longer leg for cuff, skinny fit,

lined with cuff, pattern for wear and

tear

Shorts Denim stretch, cotton

for cuff, cotton

Cut off and cuffed, lined with cuff

pattern for wear and tear

Short/long sleeve button up Cotton Slim fit, sleeve cuffs with pattern inside

Cardigan Cotton Jersey Long torso, slimming

T-shirt Cotton V-neck, crew neck, pocket comes in a

pattern

Brand Name/Brand Identity (Represents Customer and Product Category):

The guy who will purchase James apparel is outgoing, he is in college getting his

bachelor’s degree. He enjoys indie and rap music, and skateboarding; perhaps he has a part- time

job working at a local coffee shop. He wants to display a nice tailored appearance, but being in

college, he doesn’t have the funds to do so. He wants quality clothes at an affordable price. This

guy wants to be trendy, but the current stores he can afford are more out to date or offer basic

looks.

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Marketing Plan:

To regain market share and restore the good name of J.C. Penney, the company will

create a marketing strategy where customers are paired with products by targeting specific

market segments, for example males in the 18-22 age range.

James will be introduced by using Omni-Channel retailing, launching all over social

media including Facebook, Twitter, and Instagram. Eighty percent of these guys have a

smartphone, allowing them to receive this news and information instantly. J.C. Penney will host

a blogger’s event party at several of the major J.C. Penney locations, such as the one in

Manhattan, New York. This will happen before the line is revealed, so the bloggers can write and

review the line and get the word out to the general public. The simple discussion of James will

create buzz by feeding into all these sites.

Another way of promoting James through Omni-Channel retailing is through flash-sale

websites like PLNDR and Karmaloop. Guys using these websites have the style James is

targeting. These websites attract the millennial generation, the market being targeted, because

they are fast, risky, inexpensive, and done through technology. Millennial guys trust these

websites. They carry trendy and respected brands along with new lines trying to make their entry

into the market, which is, where James will fall under. These websites feature flash sales, email

promo codes often to remind customers of their sales, and tempt buyers with a 48-hour time

limit.

J.C. Penney will create an app that suggests apparel purchases to specific target markets

based on preferred size, fit, occasion, and price range. Since most guys have an idea of what they

want and typically do not want to wait on it, these app-prompts allow the customer to choose

from multiple outfits. To entice the customer to keep coming back, they will receive notifications

on their social media accounts about seasonal looks and time sensitive discounts, such as, buy

within the next 48 hours and we’ll give you 15 percent off. For those who don’t have a

smartphone and can’t use the app, J.C. Penney will invest in an in-store computer kiosk and

install the app and the Fashionista Chatline to get information about these apparel items and

where these can be located in the store. These kiosks will inform customers as to whether these

items are in their size and in stock, and a date when these can be picked up (if not in stock).

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Clothes will be offered online so guys can reorder without visiting the store. To cultivate this

target customer’s loyalty, J.C. Penney will offer percent discounts for students and promo codes

through their app for ordering online.

The Fashionista Chatline for J.C. Penney is through the online app in which a young

female can chat/text via the app and let the guy know what she thinks will look good on him.

These guys will appreciate the “second opinion” she has to offer. These girls will be staff

members of J.C. Penney and can give advice on the color, size, and fit that will suit the young

man best and raise his self-esteem.

J.C. Penney’s current app has received negative reviews from consumers, so the company

needs to invest in tech savvy and user friendly apps to keep up with this market. Comments

about the app note how it is slow and hard to navigate. The biggest problem is that a potential

buyer cannot make a purchase through the app. The updated app will match personal

demographics, permit customers to choose to receive all sales or just limit it to the men’s section,

and provide for notification preferences (though their email, text, etc.). One can choose to shop

online or in a local J.C. Penney store. This way, customers can preview the selection before they

shop. The new app will have updates and flash sales and coupons that are only valid for the app

users.

Expanding the Line:

J.C. Penney will offer private labels, new designers, and more well-known designers. The

department store has successfully used this strategy in the past, along with other department

stores. J.C. Penney can also make this target market active in the buying process by holding

competitions which feature up-and-coming lines. Voters will select styles they want to see, and

winners will be available in the store. It was the first store to use the idea of bringing in

designers, in 1983 using Halston. Now, thirty years later this marketing strategy is widely used.

Though this strategy has risks of losing money, several stores have used it recently and been

successful.

To have success and stand out from other approaches, I believe J.C. Penney should pair

with the design show Project Runway as one of their grand prizes. J.C. Penney could offer to

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feature a winning designer’s clothing, Project Runway has a large audience and is well

recognized and would be a good association for J.C. Penney. The winning designers will be

ecstatic to have a line in a department store as large as J.C. Penney. Instead of limiting the line to

one demographic, this will all be online and in stores so everyone can have the “it” look.

Another way to tap into the “up and coming” or “the next online sensation” is through

competitions for students/young designers. J.C. Penney could sponsor competitions for students

to design a line and have these entries voted on via social media. This will bring excitement to

the University of the contestants and could possibly create competition between universities with

students supporting their own designers.

Conclusion:

J.C. Penney can gain back market share with the help of the millennial market

specifically by targeting young men between the ages of 18 and 22. They have the ability to

substantially increase J.C. Penney’s sales while looking stylish every day and with the

convenience of only going to one store for their entire wardrobe. By using Omni-Channel

strategies and having J.C. Penney advertised and blogged about 24/7, sales will increase.

Creating a phone app to gain the best shopping experience will also increase sales. J.C. Penney

can get back on track and be the top department store just by making a few adjustments to cater

to the millennial generation.

Case Study Part 2: James Sping/Summer 2014

Inspiration: 8


This collections signifies todays “Urban Chic” male, this guy is sporty, athletic, in college and enjoys a good time. This young man likes going to concerts and sporting events, watching comedy movies and environmentally friendly.

Color Palette:

The Three color palettes for the season consist of muted tones. These earth tones will pop in the warm weather, and are versatile for the everyday young man. The first color story hold the softer tones, the second are rich earth tones, and the third consist of deep earth tones. With this many options the guys are bond to find a color that fits them. Note that all patterns will be switched out between color palettes giving these guys endless options of fashion

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James Spring/Summer 2014Tops & Chinos- 100% Cotton

Denim- 98% Cotton 2% Spandex


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Crew Neck Tee$12

V-Neck Tee$12

Short Sleeve Oxford

Pants$35

Long Sleeve Oxford$25

Cardigan$15

Shorts$20


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v13


Hangtag:

The hangtag is a simple font in lower case letters on a 2x2 card stock the hole punched for the tag is in the upper left corner. On the back you will find a description of the item, barcode, and price.

Front Back

Label:

James will not have a logo on the outside of the garment on jeans, they will have a lower case j on the buttons of all garments. Other than that the inside of the garments label will match the hangtag:

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JamesMens Wear

Descriptionof Item

Price:

Jamesmens wear


References

The rise of omni-channel retail: definition and 5 tips | Tips & practices | Blogs | Selligent |

Interactive Marketing Solutions | Marketing software . (n.d.). Selligent |

Interactive Marketing Solutions | Marketing software . Retrieved October 8, 2013,

from http://www.selligent.com/en/blogs/tips-practices/the-rise-of-omni-channel-retail-

definition-and-5-tips/

Fashion men. (n.d.). Fashion Men Stock Vector 99178214 : Shutterstock. Retrieved November 9,

2013, from http://www.shutterstock.com/pic-99178214/stock-vector-fashion-men.html

Fashion men. (n.d.). Fashion Men Stock Vector 99178214 : Shutterstock. Retrieved November

10, 2013, from http://www.shutterstock.com/pic-99178214/stock-vector-fashion-

men.html

Forbes, T. N. (n.d.). By The Numbers: Why Macy's Is The Anti-J.C. Penney - Forbes.

Information for the World's Business Leaders - Forbes.com. Retrieved October 8, 2013,

from http://www.forbes.com/sites/abrambrown/2013/05/15/by-the-numbers-why-macys-

is-the-anti-j-c-penney/

Gen Y Career and Workplace Expert, Speaker, Author of Promote Yourself - Dan Schawbel | 74

Of The Most Interesting Facts About The Millennial Generation. (n.d.). Gen Y Career

and Workplace Expert, Speaker, Author of Promote Yourself - Dan Schawbel | Gen Y

Career and Workplace Expert, Speaker, Author of Promote Yourself - Dan Schawbel.

Retrieved October 8, 2013, from http://danschawbel.com/blog/74-of-the-most-

interesting-facts-about-the-millennial-generation/

Meet the Millennials: Getting to know your next big customer | BedTimes. (n.d.). BedTimes |

THE BUSINESS JOURNAL FOR THE SLEEP PRODUCTS INDUSTRY. Retrieved

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October 8, 2013, from http://bedtimesmagazine.com/2012/01/meet-the-millennials-

getting-to-know-your-next-big-customer/

Wistaria. (n.d.). Need to Sketch but Can not Draw. Retrieved November 10, 2013, from

http://wistaria.org.ua/%D0%BDneed-a-sketch-and-can-not-draw/

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