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The Not-So-Jolly Holiday Outlook for JC Penney Shoppers
2012 hasn’t been kind to JC Penney. And, it doesn’t appear that Q4 will get any better for the department store, which has struggled to shake up its stodgy image this year and in the process has rattled its core customer base. According to the Prosper Spending Index, JC Penney shoppers’ outlook for holiday gift spending falls below that of the general population, with an index of 95.9 (baseline index = 100).* Among JC Penney shoppers with holiday spending plans in mind, two in five (44.2%) plan to spend less on holiday gifts this year than they did for 2011, while fewer than one in ten (7.4%) plan to spend more.
As could be expected, the holiday spending outlook is similar among those shopping Walmart (index = 94.4). Still, a slightly larger proportion of shoppers at the discounter, known to cater to more cash-strapped, lower income households, plans to spend more for the upcoming holiday season (9.5%) compared to JC Penney shoppers (7.4%).
Among the customers analyzed, shoppers at Macy’s, a retailer which has arguably benefited from JC Penney’s EDLP strategy switch-up, maintain the most positive outlook on holiday gift spending, with a Prosper Spending Index of 110.9. TJ Maxx loyalists also hold a brighter-than-average outlook (index = 106.3). Target (102.4) and Kohl’s (101.0) shoppers’ holiday spending plans are in line with the overall average.
So we know JC Penney shoppers will be trying to cut back on their holiday gift spending this year, but just how do they intend to accomplish this?
Memo to Ron Johnson: Your shoppers (or what’s left of them) are still motivated to buy based on sales and coupons.
Among JC Penney customers, nearly half say they are shopping for sales more often (45.4%) and/or are clipping coupons (42.1%) in efforts to help balance their budgets – higher than the overall average. Among the retailers mentioned, Kohl’s shoppers – rabid for that Kohl’s Cash – are the only ones eclipsing both of these figures.
With economic uncertainty pervading consumer mindsets, today’s shoppers – JC Penney’s included – continue to possess an innate need to feel good about spending their hard earned dollars, particularly when it comes to spending on those not-so-essentials like gifts and apparel. And in shoppers’ “feel-good” toolkit are coupons, weekly promos, and special sales. These items are, of course, generally absent from JC Penney’s promotional strategy – setting the department store up for additional customer loss during the critical holiday season.
Think about it like this: getting a $60 sweater on sale for $30 is something to write home tweet about. Simply buying a sweater for the $30 ticket price? It’s a little ho-ho-hum.
* Holiday outlook insights are based on celebrants who have holiday spending plans in mind.
This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.
Amazon #1 In Customer Service, But Will This Lead To Sustainable Loyalty?
- Recently our friends over at the National Retail Federation directed us to Amazon.com, where Founder and CEO Jeff Bezos had once again posted a public letter to customers, this time stating:
I’m happy to report that Amazon has been rated #1 in the National Retail Federation Customers’ Choice Awards…
Why were we excited to see this? BIGinsight compiled the list of Customers’ Choice Award recipients for the NRF Foundation, which was unveiled at their BIG Show earlier this year. These awards recognize the retailers that provide the “best” customer service and were nominated through an unaided, write-in question by (who else?) consumers.
2011 Customers’ Choice Awards: Top Ten (source: NRF Foundation)
- Amazon.com
- L.L. Bean
- Zappos.com
- Overstock.com
- QVC
- Kohl’s
- Lands’ End
- JC Penney
- Newegg.com
- Nordstrom
Customer service in the conventional sense has generally implied face-to-face communication: greeting a customer; providing him/her with product information, demonstrations, additional options, or size assistance; suggesting add-ons or complementary products; and finally, completing the sale. Historically, the best opportunity to cultivate great customer relationships is within an environment where personal interaction between the retailer (i.e. sales associates) and customers is at its peak: a physical store.
So does it surprise you that a traditional brick-and-mortar retailer didn’t top this year’s list? Further, just three of the retailers (Kohl’s, JC Penney, Nordstrom) who graced the top 10 aren’t primarily entrenched in e-commerce, catalog selling, or home shopping.
So how does Amazon rank #1 in customer service?
The digital age has forced the evolution of customer service. In a world where emails and texts have replaced more intimate forms of communication, where shoppers can complete a sale 24/7 via online transactions, and where showrooming is linking the physical shopping experience with the virtual, the modern definition of customer service seems to have downgraded the importance of direct human interaction. And, let’s not forget that customer service in the traditional sense has also been crippled in recent years by an economy fostering a trend toward part-time, minimum wage, less “invested” sales associates.
As the world’s largest online retailer, Amazon has been a driving force behind the e-commerce movement and changing standards for customer service excellence. Some of the words consumers used in their reasons to nominate Amazon for Customers’ Choice included “efficient,” “fast,” “reliable,” “no hassle,” “easy,” and of course, “free shipping.” Note that these terms differ vastly from those who nominated Nordstrom, THE purveyor of traditional customer service: “experience,” “friendly,” “personal,” and “knowledgeable.” [More specific reasons can be found here for each retailer included in the top 10.]
Consider too the e-commerce services that online shoppers (a growing group) value. While the majority indicates that toll free “live” customer service very important or important, this figure has declined nearly 10% from 2007. With customers increasingly gravitating to such services as low prices, free shipping, and easy to use websites over the past few years, it’s obvious that verbal communication isn’t a service prerequisite when it comes to buying online.
But are Amazon’s low prices, free shipping, and efficient turnaround enough to capture sustainable customer loyalty? After all, the troubled economy did create a new consumer – one who shops around, is value-oriented, and may find it increasingly difficult to create ties with one retailer over another.
One of the most fascinating parts of the retail industry is that we are always looking toward for what’s “next” – hot new trends, advancements in technology, gotta-have products, or evolving practices that change the way we do business. Retailers like Best Buy and JC Penney have already announced efforts to ramp up one-on-one interaction to drive customers back to their stores, looking ahead to perhaps a renaissance of traditional customer service.
With its history as a game-changer, though, Amazon just might remain what’s “next” for the foreseeable future.
This post originally appeared on Forbes.com as a contribution to the Prosper Now blog.
Fresh Consumer Insights for July
Early each month, we release our Executive Briefing – complimentary topline insights from our latest Monthly Consumer Survey of more than 8,000 consumers.
And, we’ve just released our latest edition for July. Here’s what you may have missed:
– Economic sentiment perked up from June, though consumers failed to set off any fireworks compared to years past. This month’s reading (32.8%) looks a little stagnant when placed in longer-term perspective – and well below Jul-07’s pre-recession figure of 47.8%.
– Workers show signs of concern for personal job security. 4.2% admitted they were anxious about becoming laid off, up from last month as well as one year ago.
– With the campaign season about to hit full throttle, consumers seem to be bracing for the onslaught of political propaganda. Overall, though, consumers seem a little less apprehensive this Presidential go-around they did during the 2008 McCain vs. Obama election. Plus: how would you score in a Presidential Pop Quiz?
– The uptick in consumer confidence this month may be leading a few shoppers off the practicality platform. Before you start thinking “spending rebound,” though, keep this in mind: practicality remains well above the sensible shopping tendencies we witnessed before the Great Recession.
– July pump price prediction: $3.49/gal, 25 cents below the forecast for the end of June ($3.75/gal). For more on this topic: Pain at the Pump: Who (or What) is Controlling Pump Prices?
– A bit of Christmas cheer might be in store for retailers: one in ten says they plan to spend more on gifts this year, up from 6.5% in Jul-11.
– Was JC Penney’s Fair & Square strategy a gift to Macy’s in Women’s Clothing? For the sixth consecutive month, Macy’s bests JC Penney in this category, though Kohl’s and Walmart continue to lead overall.
– In the well-documented Shoe Wars, one retailer is M.I.A. in July. Yes, that’s right (and you heard it here first)…JC Penney (now #6) has been bounced from the Top 5 by Foot Locker.
– 90 Day Outlook: Back-to-School (i.e. Children’s Clothing) looks to be a bright spot in consumers’ spending plans. However, with the majority of categories facing DOWNward compared to June, revenues may fizzle instead of sizzle as we make our way through summer.
– What’s Hot? Farmers’ fresh fare beats out Spider-Man, Dark Knight.
To sign up to receive the monthly BIGinsight™ Executive Briefing, please click here.
And, to view the latest BIG Executive Briefing in its entirely: July 2012.
Source: BIGinsight™ Monthly Consumer Survey – JUL-12 (N = 8509, 7/2 – 7/9/12)
© 2012, Prosper®
BIGinsight™ is a trademark of Prosper Business Development Corp.
Confidence Cools Off As Summer Heats Up + How Does the Stockholm Syndrome Relate to Savings?
This month, my co-host for the BIG Call was John Mariotti, President/CEO & Founder of the Enterprise Group. John also currently serves as a Director on several corporate boards and is an award winning author.
For this month’s BIG Call, John supplemented our favorite data on confidence, employment, personal finances, and spending plans with his unique analysis and understanding of these topics.
Here’s what we talked about:
– Confidence in the economy cools off as summer heats up, marking the second consecutive month of decline
– Just 16% of consumers are calling for “fewer” layoffs – a figure that has decreased [i.e. grown more pessimistic] over the past two years
– Last month’s “dip” in practicality appears to have been a “blip” on consumers’ spending radar
– Why are consumers seemingly holding back when it comes to paying down debt or increasing their savings?
– Scary fact: One out of three consumers isn’t saving any income
– Improvements in 90 Day Outlook may not be as positive as they appear
– How is JC Penney’s “Fair & Square” faring?
To listen to the recorded webinar, click here.
For the full, complimentary June 2012 BIG Call slide deck, please click here.
For more information on this data, please contact BIGinsight™.
Source: BIGinsight™ Monthly Consumer Survey – JUN-12 (N = 8760, 6/5 – 6/12/12)
© 2012, Prosper®
BIGinsight™ is a trademark of Prosper Business Development Corp.
“Fair & Square” Revisited
When we first took a look at the new JC Penney “Fair & Square” strategy back in March, the initial read was so-so from the consumer standpoint. In our monthly “Hot or Not?” feature, more deemed it “not” (58.3%) than “hot” (41.7%), though JC Penney Women’s Clothing Shoppers* seemed the most willing to give the strategy a chance, particularly compared to Kohl’s, Target, and Walmart shoppers.
Flash forward to June…
In the wake of JC Penney’s disastrous Q1 earnings report, we decided to again poll our nearly 9,000 consumers for an update on their “Fair & Square” feelings. As you can imagine, it’s not faring so well; over the past three months, those who think JCP’s new direction is “hot” dropped nearly 14%:
But the real issue here is how “Fair & Square” has affected JC Penney’s consumer share. A look at 10 years of BIG historical data on the current Top 5 Women’s Clothing retailers tells three tales:
1. The Decline of Walmart
2. The Rise of Kohl’s
3. The Macy’s / JC Penney Clash
Let’s leave Walmart and Kohl’s out of the story for once and make JC Penney and Macy’s the main characters. As you can see, since Macy’s nationwide conversion in the mid-2000s, these two department stores have been tangling pretty consistently for third place in this category – with JC Penney generally the victor. However, a magnified look at each retailer’s performance over the past 13 months shows just how damaging “Fair & Square” was for JCP’s customer base:
Instead of driving shoppers to its stores, “Fair & Square” sent its customers right into the arms of competitors. #whatanightmare
* A selection of Women’s Clothing retailers was analyzed for this report. “Women’s Clothing Shoppers” are defined as those who shop most at a given retailer for Women’s Clothing (an unaided, write-in response).
Source: BIGinsight™ Monthly Consumer Survey – JUN-12 (N = 8760, 6/5 – 6/12/12)
© 2012, Prosper®
BIGinsight™ is a trademark of Prosper Business Development Corp.
BIG on the Street: Hola Miami
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Miami, Miami, you’ve got style.
Blue sky, sunshine, white sand by the mile.
When you live in this town, each day is sublime.
The coldest of winters are warm and divine.
– Rose Nylund, Dorothy Zbornak
The Golden Girls
Season 2, Espisode 6
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I never thought I’d see the day when I couldn’t count on the advice of my Girls. Having just flown back from a five day excursion to Miami, I had one expectation for this trip – a tan. Too bad it poured on Day 1…and Day 2…and Day 3 – you get the picture. Blue sky, sunshine my foot. If you are headed there sometime soon, don’t worry; Miami returned to normal beautiful weather patterns upon our departure. #vacationbust
While I didn’t manage to bring back my sunshine souvenir, I thought it would be fun to take a look at one of our southernmost states, courtesy of our monthly survey of more than 8,000 respondents (a portion of whom, of course, are Floridians).
While we already know that Florida is the “Best Bet for a ‘Rerun’ Vacation” and is labeled “Most Attractive Attractions,” as it turns out, those living in the Sunshine do have style. More than a quarter of Florida residents (22.5%) say that newest fashion trends and styles are important to them, slightly higher than the national average (20.5%). While a third prefers traditional, conservative looks (33.1%), the largest proportion of Floridians opts for value and comfort over fashion (44.3%)…must be all of those retirees – nearly a quarter of those living in this southern state have withdrawn from the workplace (compared to about a fifth of the population overall).
When we look at retailers specifically shopped in Florida, it appears that Walmart and Kohl’s lose some of their nationwide appeal. Among Women’s Clothing connoisseurs, Macy’s (10.8%) takes top honors, followed by JC Penney (9.3%), Walmart (8.8%), Kohl’s (7.5%), and Ross (4.8%). While Walmart (13.9%) is shopped most often for Men’s (followed by JC Penney at 9.7%), Payless (11.7%) tracks ahead of the big discounter (10.5%) in Shoes.
Concluding the retail round-up, Florida-style:
– Walmart wins in Sporting Goods (15.6%), though Sports Authority (14.7%) finishes just a point behind. Dick’s takes bronze (9.2%).
– While the CVS lead nationwide is BIG news for the Prescription Drug category, this druggist (21.7%) still trails Walgreens (26.8%) in the Sunshine State.
– With two in five shopping here most often for Groceries, Publix (42.1%) brings the heat to match the humidity, those Walmart (27.6%) finishes a respectable second.
P.S. I’m not alone in my Golden Girls admiration…this TV classic ranked #2 among the shows that best portrays consumers’ groups of friends/social lives. Click here to view.
Source: BIGinsight™ Monthly Consumer Survey – APR-12 (N = 8724, 4/3 – 4/10/12)
© 2012, Prosper®
BIGinsight™ is a trademark of Prosper Business Development Corp.
Consumer Buzz: Women’s Clothing
According to new analysis by BIGinsight, department stores are more buzzed about than discounters when it comes to shopping locales for feminine apparel.* For this special report, we’ve applied the Net Promoter Score** metrics system to our April Consumer Survey data to show how consumers perceive their Women’s Clothing store of choice.
Here, we took the percentage of a destination’s detractors from the number of those who actively promote their Women’s store of choice, which helps us evaluate the strength of a retailer’s image for the Women’s Clothing category. And, among the Top 5 stores for this segment, we found that Kohl’s receives the most net positive buzz (NPS = 36.2%) from its customers, followed by Macy’s and JC Penney (see below). While Target’s NPS was significantly lower than its department store counterparts (at 2.6%), the discounter still garnered an overall positive rating. That other big discounter – Walmart – was the only retailer in the Top 5 to calculate a negative NPS (-10.3%)…ouch.
It’s interesting to note that while the most buzzed about retailers are department stores by definition, each courts customers based on varying motivations. For the Kohl’s and JC Penney shoppers, price and selection are the key reasons to peruse their racks; for Macy’s, it’s quality and selection. At Walmart, customers shop based on price and location, while Target woos shoppers with a mix of price, selection, and location (shoppers seem divided between the latter two).
What analysts are buzzing about, though, is consumers’ reaction to JC Penney’s new “Fair & Square” pricing strategy. As it turns out, JC Penney’s customers just aren’t as likely to be lured by coupons and special deals when it comes to shopping the Women’s section. While Walmart and Target are the least likely to be motivated by this sales simulant, over at Kohl’s, we might see shopper anarchy if this department store darling adopts a similar strategy #kohlscashforever
*April 2012’s Top 5 Retailers for Women’s Clothing (Kohl’s, Walmart, Macy’s, JC Penney, Target) were analyzed for this blog.
**Net Promoter, NPS and Net Promoter Score are trademarks of Satmetrix Systems, Inc., Bain & Company, and Fred Reichheld
The NPS which takes a simple question–Would you recommend us to a friend?–has helped countless organizations better understand “promoters” and “detractors” and paint a clear picture of their company’s performance through the eyes of their customers. By applying the Net Promoter Score*, executives can identify their customer base and move beyond “sufficient” to brand loyalty and growth.
For more information on this data, please contact BIGinsight™.
Source: BIGinsight™ Monthly Consumer Survey – APR-12 (N = 8724, 4/3 – 4/10/12)
© 2012, Prosper®
BIGinsight™ is a trademark of Prosper Business Development Corp.
“Fair is Fair” but is Square…well…Square?
As any self-respecting child of the 80’s knows – “Fair is Fair.” Doesn’t the theme from that nearly 30 year old [ack!] cult classic take you back? Pat Benatar, anyone? Supergirl? An undying love for Christian Slater? But I digress…let’s hop out of the DeLorean and evaluate what really got me thinking about “Fair is Fair”:
JC Penney’s new “Fair & Square” Ad Campaign
The complete overhaul of JCP’s marketing, merchandising, and promotions plans certainly made headlines in the retail community, but what do consumers really think about this strategy switch-up? In addition to being practical and realistic in their purchasing, today’s shoppers are also “intelligent”: researching products, comparing prices, stalking sales, and couponing like crazy. And, consumers are all the more informed when aided by their mobile devices. Knowing all this, it seems that JCP’s new “Fair & Square” approach might be as dated as a Flock of Seagulls hairdo. So who’s buying what JCP’s selling?
In our March Consumer Survey of more than 9,000 consumers, we put JC Penney’s “Fair & Square” Ad Campaign to the test in our monthly “Hot or Not?” feature. As it turns out, more deemed it “not” (58.3%) than “hot” (41.7%) – placing “Fair & Square” in the middle of the pack compared to the other items we polled this month.
But who are the two out of five customers who have at least had their interests – if not their wallets – piqued by “Fair & Square”? These shoppers are more prone to be women (59.9%), married (53.2%), middle-aged (46.7 years, on average), and earning about $56,000/year…sounds like JC Penney’s typical Women’s Clothing shopper.
Is that not interesting enough for you? Let’s take a look at “Fair & Square” from a different perspective – Women’s Clothing shoppers from competing retailers.* Interestingly, fewer shoppers at Walmart – home to the somewhat similar EDLP pricing strategy – warmed up to the idea of “Fair & Square.” Macy’s, Nordstrom, and Old Navy shoppers were relatively more excited by the concept than Kohl’s or Target loyalists:
From this standpoint, it appears that most shoppers have a so-so opinion of “Fair & Square” so far. Perhaps they’re walking into JCP to see what all of the fuss is about, but whether or not they’ll convert to the retailer over the long haul remains to be seen – as does the department store’s ability to retain its current customer base.
Ah, Love Retail is a Battlefield.
For more information on this data, please contact BIGinsight™.
* A selection of Women’s Clothing retailers was analyzed for this report. “Women’s Clothing Shoppers” are defined as those who shop most at a given retailer for Women’s Clothing (an unaided, write-in response).
Source: BIGinsight™ Monthly Consumer Survey – MAR-12 (N = 9242, 3/6 – 3/13)
© 2012, Prosper®
BIGinsight™ is a trademark of Prosper Business Development Corp.