When does a gift from J.C. Penney Co. Inc. mean more than just a gift?
This story first appeared in the October 12, 2012 issue of WWD. Subscribe Today.
When it might be viewed as a coupon of sorts — or perhaps some other loyalty incentive.
That’s the debate regarding the gift at the bottom of Ron Johnson’s latest e-mail letter to customers.
The J.C. Penney chief executive officer sent out his third monthly letter — he started the new custom in August — to consumers Thursday morning, but this time included an invitation at the bottom to visit the “new and improved jcp.”
Johnson wrote: “Our goal is really pretty simple — we want to help you look and live better every day, while bringing back the fun of shopping.”
After an update of some changes that took place over the past month, Johnson said, “I’d like to invite you in to your favorite jcpenney store to see the changes firsthand. As an incentive, I’m enclosing a $10 gift. Think of it as a thank-you from jcp for your loyalty through the years.”
The invitation has a bar code for scanning that offers a “$10 off gift valid for one-time use on a single in-store purchase of $10 or more.” Valid for use between Oct. 11 and Nov. 4, the gift also has certain restrictions such as not being valid for jcp.com orders or for certain purchases such as Sephora-related merchandise or gift cards.
According to a company spokeswoman, “In the monthly letters Ron has sent to customers, he has requested their feedback. Through this feedback, we learned that there were still some customers who hadn’t yet been to jcpenney since we launched our transformation.
“Ron wanted to personally invite customers out to our stores and have the first $10 be on us.” She also emphasized that the invitation does not reflect in any way a departure from the retailer’s “Fair and Square” every day low prices.
When pressed further via e-mail on whether Thursday’s gift was a one-time offer, the spokeswoman replied, “We haven’t made any decisions at this time. However, we are looking to expand our loyalty program with additional incentives.”
According to Walter Loeb, a former retail analyst who now heads up consultancy firm Loeb Associates, “I think it’s the beginning of couponing again. He’ll do more when he discovers the customers react favorably to that.”
Shares of J.C. Penney on Thursday rose 8.4 percent to close at $26.18 in trading on the New York Stock Exchange. One sign of good news for investors is a comment Chip Bergh, Levi Strauss & Co. president and chief executive officer, made Tuesday in an earnings call citing the 700 units with Levi’s shops-in-shop in remodeled stores had experienced “dramatic positive improvement.” That compares with those stores not yet converted, which seemed to follow the “overall J.C. Penney decline.”
Sales have been decreasing since February when Johnson decided to do away with coupons and sales events. It was part of the plan to overhaul the shopping experience and wean consumers off discounts. In addition to Levi’s, other shops rolled out at select stores include Sephora, Liz Claiborne, Izod and Arizona Jean Co. Other shops in the works include Joe Fresh, Cynthia Rowley, Maidenform and Vanity Fair.
“The collective shops are comping 20 percent better than the rest of the store,” according to Johnson.
In a research note last month following a tour of the Penney’s prototype, Citi Research analyst Deborah Weinswig said, “We found the JCP prototype store to be inviting and exciting, with brighter lighting and ample mannequins to better showcase an impressive array of trendy product.”
She also said that she believed that the “new JCP will offer a shopping experience unlike any other in apparel retailing.” The analyst noted that since the Levi’s roll out, Haggar, Dockers and Disney have signed on. She concluded that more will follow given the “better-than-expected results” from the Levi’s shops-in-shop format.