For the second time in less than a month, the USPS employee newsletter has carried a story touting JC Penney’s re-branding effort, which made heavy use of direct mail:
As consumers have tightened their belts in recent years, more people are shopping at discount department stores instead of luxury chains. Sensing an opportunity, iconic retailer jcpenney is using this trend to reinvent itself.
Unfortunately, the “reinvention” hasn’t been going very well. The original News Link story appeared on June 19. On the same day the Associated Press reported that JC Penney’s CEO had abruptly left the company:
The surprise move comes as the department store chain is scrambling to reverse a sharp drop in customer counts and plummeting sales after Johnson’s new pricing strategy ended up turning off customers, who are accustomed to coupons and big markdowns. The plan was implemented Feb. 1.
The timing of the News Link story may just have been unlucky, although there had already been indications in the press that the Penney campaign wasn’t working. So why on earth bring it up again? Especially considering today’s news about JC Penney:
Everyday pricing at JC Penney may be a disaster, turning off shoppers used to frequent sales. Standard & Poor’s Ratings Services is lowering its credit rating on the department store operator. This moves Penney further into junk status, with S&P saying the chain’s performance remains weak. Concerns are growing about the firm’s ability to turn its business around. Penney posted a bigger-than-expected loss and a 20 percent drop in revenue in the first quarter as shoppers were turned off by a new pricing plan that eliminates hundreds of sales in favor of lower everyday prices.
Letting employees know about imaginative uses of direct mail is a great idea, but it might be better to avoid publicizing ones that have failed as dramatically as JC Penney’s has!
Update: Our story provoked this reaction from the Intellisent Postal Affairs blog:
Did the USPS folks not see the initial commercials that kicked this ill-advised JCP campaign off? With the lady standing in front of her mailbox screaming about all the coupons and sale flyers she got in the mail??
I have to confess I didn’t see the commercial until today- here it is: