CHICAGO, IL - JANUARY 26: A shopper arrives at a J.C. Penney store at the Ford City Mall on January... [+]
J.C. Penney (NYSE:JCP) and Apple (NASDAQ:AAPL) stores have one thing in common: Their appearance is meticulous, and Ron Johnson has designed them. But they are different in one respect: Apple’s stores are always crowded and sales are soaring, adding to the company’s top and bottom lines. J.C. Penney stores, on the other hand, are striving to attract customers, and sales are souring, hurting both the top and bottom lines of the company. What makes this difference?
Hype! Apple’s marketing machine and unique products already hype customers heading for its stores. They know what they want; they don’t need conventional sales promotions to be lured to the stores. But J.C. Penney doesn’t have a similar marketing machine, and its products aren’t unique either; they are carried by Macy’s (NYSE:M), Kohl’s (NYSE:KSS), Wal-Mart (NYSE:WMT), and Target (NYSE:TGT)—to mention a few. This means that J.C. Penney’s customers have yet to be hyped by traditional sales promotions, something Ron Johnson did away once he assumed the helm of the company by introducing everyday low price and eliminating store coupons.
For beginners, consumers are both rational and emotional beings. As rational beings, consumers decide by reason, by balancing goals and constraints, surfing the Internet for the best price and clipping store coupons. As emotional beings, consumers decide by emotions like hype, rushing and racing to copy and imitate other consumers, and to take advantage of limited time offers that fear they may lose out. This is especially the case for discretionary items like clothes and accessories. That’s why sales promotions work so well for department stores, and taking them away was a strategic mistake for J.C. Penney that undermined its refurbishing initiative.
The Bottom Line: Hype is part of shopping experience, and J. C. Penney must keep it alive.
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