This holiday season, price increases have been the thorn in the side of many shoppers. JCPenney’s approach to the holiday shopping season is simple: pre-inflation prices.
That’s the pitch the company is using in its holiday marketing. It’s not only promising consumers that it will not increase prices this year, but it’s also offering the same prices that it offered two years before the pandemic.
“Our customer is definitely impacted by inflation. Everyone is,” said Michelle Wlazlo, chief merchandising officer at JCPenney. Currently, JCPenney is primarily targeting “working families” and lower-income customers, she said. “We kept our prices flat because we know our customer is having to make tradeoffs right now.”
The holiday push is part of an overall brand relaunch that JCPenney kicked off in September as part of a $1 billion plan to revitalize the brand. It’s also included marketing campaigns featuring celebrities like David Beckham and Nicki Minaj. According to JCPenney, compared to last year, the company has seen 3.5 million more brand searches on Google. And, since the relaunch went into effect, it’s experienced 49% more online brand mentions and a 130% increase in store traffic.
The company has pledged to invest $1 billion into the brand by the end of 2025. That includes the holiday pre-inflation prices push, which went live with a marketing campaign on its social channels, as well as further collaborations with designers like Jason Bolden and Prabal Gurung, which have worked to bring new customers to JCPenney. In the future, exclusive fashion collabs like these will be a core part of the retailer’s merchandising strategy.
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Additionally, in November, JCPenney was ranked the No. 1 best place to shop for holiday deals by personal finance company WalletHub. Wlazlo attributed that not just to the company’s favorable prices but also to its work with celebrities. The David Beckham-curated fragrance collection, released in September, is already the best-selling beauty product in the retailer’s catalog, Wlazlo said.
JCPenney joins several other lower-priced retailers that are seeing a boost in end-of-year business. The brand experienced the highest use of JCPenney store credit cards of the year. For its part, Walmart saw its online sales grow by 24% year-over-year in the quarter ending October 27, with its total revenue increasing more than 5% to $160 billion. Other off-price retailers like TJ Maxx and Ross saw their revenues grow by high-single-digit percentages in the same period.
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While consumers have spent as much as ever this holiday season, many have had to rely on buy-now, pay-later options or dip into their savings.
At the same time, luxury retailers are seeing their sales slow down. Neiman Marcus is one example, with $95 million in revenue in the quarter ending October 28, compared to $112 million in the same timeframe last year.
JCPenney’s business has recently faced difficulties. While the company is privately owned by Simon Property Group and does not reveal financial information, SEC filings have shown that net income has fallen by as much as 65% this year, though the company still has $1.7 billion in liquidity available.
Wlazlo said it’s no surprise that as inflation puts pressure on consumers’ wallets, more of them are looking for deals and flat prices.
“Our customers are working families,” Wlazlo said. “They always have pressure on their wallets, and they’re always looking for a deal. So we’re prepared for a time like this.”
