J.C. Penney Looks to the Web for Future Growth
In his keynote address at the 2008 Internet Retailer Conference & Exhibition in Chicago last week, Mike Boylson, executive vice president and chief marketing officer of J.C. Penney, discussed his company’s evolution and how the Web has become central to its growth mission.
With a $1.4 billion marketing budget, Penney certainly intends to fund its Web development generously. “It’s becoming an economic necessity to transform the marketing initiative to the digital space,” Boylson said, noting the rising costs involved with mailing catalogs.
This isn’t to say that Penney has abandoned the catalog as a marketing channel. It’s just scaling back. And the message being conveyed to consumers in the catalog will be integrated across all channels: a customer-centric model. This is done through differentiation, Boylson said. He cited several factors he believes helps J.C. Penney differentiate itself from its competitors, including:
* value proposition;
* accessibility (stores, catalog, Web);
* brand positioning through its “Every Day Matters” media campaign;
* extended assortment of products online — the company offers 250,000 SKUs online, including all of the products featured in the catalog, as well as plus and petite sizes; and
* its private brands, including Sephora and the recently launched American Living.
Penney has also started a new online initiative with its “Know Before You Go” program to help integrate online customers with its retail stores. The initiative offers information such as directions to the nearest retail location, the availability of products at that store, among other things.
Looking at the multichannel marketer’s evolution over the last decade, Boylson identified three distinct periods: turnaround (2001-2004), growth (2005-2006) and leadership (2007-2011). The company’s goal is to be the “leader in its space by 2011,” Boylson said. And it’s hoping to accomplish that with a philosophy centered on three “E’s”: