JC Penny's Big Book Blunder - 5 years later!

7540935458?profile=RESIZE_400xThis post was originally published 5 years ago.  Today JC Penney announced they were bringing back catalogs.  It took them almost 5 years to realize what Yeoman has always said; customers shop in a multi-channel way and can't be forced into 'online or offline' mode. 

Original Post: JC Penney may now join the list of retailers, manufacturers, and publishers who have mistakenly assumed they can go 'all in' online and abandon one of their traditional channels.  In this case, JC Penney has opted to exit the traditional catalog business to focus on e-commerce.

Big mistake for several reasons.  First, as all Yeoman customers know, the web is not an 'either or' type of situation.  There are multiple studies that prove all types of purchasers move seamlessly between online and offline purchasing options, often using the web or a catalog for research, then purchasing in completely different manner, whether its a sales rep or retail outlet.

Traditional sales tracking simply doesn't have the capabilities to monitor this level of interaction.  Penney was likely simply looking at the cost of the catalog and decided they could 'do without' the extra burden; after all web sales were growing.

The first step should have been some detailed analytics that compared the geographic browsing patterns of their web users with the actual catalog mailings.  This is fairly easy research that could have shown the influence factor of any particular mailer OR online campaign.  In addition, a retailer like JC Penney should cross reference these patterns with their retail store activity.

In the case of printed catalogs, there's a mountain of evidence supporting the multi-channel approach, combining offline and online sales relationships with the customer works:

  • 9 out of the top 10 converting websites have offline catalogs (SeeWhy Research)
  • Customer that receives a printed mailing spends 163% more than pure online player (Internet Retailer)
  • 60% of customers that receive a catalog have visited web site (USPS and Comscore)

If you're simply shrugging our recommendations about integrating legacy sales channels as 'old fashion' here's a more compelling reason - the pure online players are integrating backwards.  Amazon now has mini-catalogs and has even opened 7 physical locations for same day pickup.

And its not just the online consumer market that's integrating backwards.  Pure online B2B players have begun adding outside sales reps and bringing on distribution partners.

 Get over the hype; the Internet is not new and its not a replacement for everything.  At Yeoman, we believe every Company needs to think holistically about the web as part of their overall sales and distribution model.  Learn more....

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Comments

  • Amazing to see it took them 5 years to realize the relationship between print catalogs and online activity. 

  • The organization continues to unravel.  Their 'belief' that the consumer doesn't like the 'experience' of a sale and they can dictate pricing is killing them.  Sales down 20% since fair and square released:

    http://multichannelmerchant.com/news/jcpenney-1q-sales-fall-0516tpp1/

  • JC Penney is also ignoring demographics.  A lot of senior citizens are more familiar and comfortable ordering from a catalog than online.
  • Apparently JC Penney is doing more than just making bad decisions on their catalogs.  This great NY Times article outlines how they had been using black hat SEO techniques to garner top search rankings:

     

    http://www.nytimes.com/2011/02/13/business/13search.html?pagewanted...

     

    Note the interesting timing of their rise in search rankings as it relates to their decision to drop their bigger print media.  The 'claim' that JC Penney didn't know their partner was seeding links for them especially troubling; they either aren't telling the truth or their online team isn't doing their job.

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