No doubt Amazon has been taking a more aggressive approach to selling apparel in recent years, acquiring Zappos in 2009 and launching fashion site MyHabbit in 2011.
But for now, Amazon doesn’t seem to be pushing any clothing retailers out of business — certainly not J.C. Penney.
Coupons might not be to blame
Surprisingly, not every J.C. Penney customer missed the store’s coupons. Although most commentators have seen the loss of coupons as the single biggest factor in the company’s decline, that might not be the case after all.
Janine Zaidan Timmermann
writes:
“As for the pricing, some people are just not that smart… they think they are getting a “deal” when they use a 20% off coupon… wondering if they realize the price was increased and you end up paying exactly the same?? Probably not. I loved not having to feel like I HAD to have a coupon to come into the store.”
Leellen McFarlane
writes:
“I’ve been shipping at JCP for a year now, I would go there before anywhere else. Not now. I took my 20% off coupon and I found a pair of pants I liked. They were tagged at 34.00 where the week before they would’ve been 22.00 so even with the coupon I would pay about 27.00. I was sooo angry that I left and have no plans to return. Coupons are a rip off!”
Judi Watson Frazier
writes:
“I LOVED not having to play stupid discount games!! I complained for YEARS about them. It made me angry that if my husband needed new underwear for a trip on Tuesday, I had to pay 25% more for it than it would cost next Saturday…don’t make us go back to playing games. JCP customers knew not to buy anything until there was a sale.”
When it comes to similar merchandise and aggressive discounting, Kohl’s Corporation (NYSE:KSS) is probably the company’s biggest competitor. Yet, while J.C. Penney’s stock has floundered, Kohl’s has done little better. Since the beginning of January 2012, shares of Kohl’s Corporation (NYSE:KSS)’s are down nearly 5%.
Presumably, if these J.C. Penney customers were so discouraged by the loss of coupons, then why hasn’t Kohl’s performed better? The company should have benefited from an influx of J.C. Penney customers, yet shareholders have not been rewarded.
Morgan Stanley downgraded Kohl’s shares back in March, slapping an Under-Weight rating on the retailer and a $42 price target. Part of Morgan Stanley’s reasoning was that the reintroduction of coupons by J.C. Penney would increase the competitive pressures Kohl’s was facing.
Yet, Kohl’s seems to have benefited little from J.C. Penney’s decision to ax coupons in the first place. If J.C. Penney believes restoring coupons alone will fix the company, its shareholders could be in for a rough ride.
Investing in retail
Obviously, these Facebook responses are but a sampling of the larger American clothes buying public. Yet, they demonstrate a few basic truths in retail: larger people need larger clothes, online shopping won’t kill any clothing stores any time soon, and aggressive discounting isn’t a magic bullet.
The overwhelming response J.C. Penney received from its ad should be interpreted as a positive sign that people still care; can the retailer effectively implement the necessary changes?
The article 3 Retail Takeaways from J.C. Penney’s Facebook Page originally appeared on Fool.com and is written by Salvatore “Sam” Mattera.
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