Only a day ahead of releasing its fourth quarter earnings, JC Penney detailed a new promotional strategy that will include selling some its private-label clothing items for an actual penny, and borrowing supermarket-style display ideas to boost sales.
The Plano, Texas-based retailer’s chief marketing office, Mary Beth West, told The Dallas Morning News on Feb. 24 that store displays will be similar to cookie displays in grocery stores. In the same way that a poster for cookies would be situated next to a selection of cookies, the clothes featured on store mannequins will be situated next to the mannequin displays.
“We’re doing the equivalent of an Oreo display,” West told the newspaper.
It’s just one component of the company’s three-year turnaround plan, which includes selling a small number of items—some for super low prices—at a loss, in order to attract more foot traffic. It’s not a fail-safe approach.
“The potential risk is that customers come expecting to buy the $0.01 items and get frustrated when they aren’t available,” said Adam Levine-Weinberg, an analyst with The Motley Fool. But it’s not entirely different from a Black Friday doorbuster sale, Levine Weinberg told Quartz. If the increase in traffic encourages more purchases, more sales could make up for loss incurred by the steep discounts.
“We want to be the shopping mecca for the modern American mom, which means we need to dimensionalize the idea of worth,” the company said in a statement.