J.C. Penney planning to sell items for a penny as part of its new marketing

EMBARGOED TILL 10 AM FEB. 23: J.C. Penney is unveiling a new tagline and a new ad campaign.

J.C. Penney is borrowing ideas from supermarkets and warehouse clubs as it launches its new marketing campaign. It’s even testing metal shopping carts and rolling baskets at its store in Frisco.

The Plano-based retailer is also launching a new slogan Sunday: “Get your Penney’s worth.”

Penney means that literally.

The company plans to sell some of its best basics for a penny, starting with items from its $1 billion Arizona brand. Some promotions will be buy one, get one for a penny, and some items will be 1 cent, without another purchase required.

The retailer says it’s investing some of its marketing budget on freebies.

Penney wants people to try its products, said Mary Beth West, Penney’s chief customer and marketing officer. “We’re going to do it with items we’re proud of.” The penny offers will be in limited quantities per store, and all the items will be from its private brands.

The supermarket thinking doesn’t stop there.

What does a $2.49 package of Oreo cookies have to do with a $24.99 colorful summer dress?

In West’s mind, a lot. For one thing, both can be impulse buys.

“Marketing doesn’t stop once the customer comes through the door,” she said.

A prominent display of Oreos in the supermarket includes pictures of the cookies, maybe with milk, and a discounted price in big print. Then there’s a rack of cookies right there.

If you had to hunt down the Oreos, you might forget about them.

“We’re doing the equivalent of an Oreo display,” West said. “We know that clothes that are featured on mannequins sell.” So a rack of dresses will be right behind the mannequins where shoppers can find them. Plus there’s a big sign with the price.

“We’re making it as easy as possible to buy the dress,” she said.

J.C. Penney's new displays have racks of the featured clothes right behind them.

The store as a solution

It’s just one of the marketing ideas Penney is putting to work as it begins its second year of a three-year turnaround plan.

West, 53, has spent most of her career in the consumer packaged goods business devising ways to get us to spend billions of dollars on brands such as Ritz, Philadelphia, Nabisco, Kraft Mac & Cheese, Jell-O and Cool Whip.

J.C. Penney is testing shopping carts at its store in Stonebriar Centre in Frisco. (DMN staff photo Maria Halkkias)

Until July 2014, she was the top marketing executive at Mondelez International, the snack and candy giant formed in 2012 after Kraft Foods Inc. was split into two companies. West had been chief marketing officer at Kraft since 2007.

Last April, West took an unconventional path to her current job. To take it, she had to resign from Penney’s board, where she had been a director since 2005.

West is part of the new team that CEO Marvin Ellison has been putting together. She said that after decades of hoping Costco and Wal-Mart would push her products in their stores as she intended, she has total control now. She’s working closely with former Home Depot executive Joe McFarland, named executive vice president over Penney’s 1,000 stores in January.

West believes retail can’t be just about shopping; stores have to view themselves as solutions. “It’s about finding what you need. If a shopper leaves without a bag, that time in the store was a waste.”

Increasing the traffic

Penney will report 2015 results Friday, and Wall Street is still on the fence about its potential to become profitable again. It had a better 2015 holiday season than some of its competitors. The trick is to keep that momentum going. West is also working on a loyalty program that will be ready later this year.

The challenge is to get traffic up. Part of West’s research included focus groups with Penney shoppers who hadn’t been back in a long time. On the way into the store, they rated Penney a 1.2 on a 5-point scale, with 5 being tops. On the way out of the store, the average shot up to 4.8, she said.

“If we can get her in the door, she’ll be surprised,” West said, dressed in a Penney dress, jacket, shoes and tights. “We have to jolt her into finding out we’re as modern as she is.”

Shoppers know they don’t have to pay a lot to get what they need, she said. The new print and television ads will show people getting their Penney’s worth in various situations.

The campaign includes a social hashtag of #soworthit and a digital ad that you scratch with a mouse to reveal the penny campaign. All ads are also running in Spanish with the tagline Donde Tus Penney’s Valen.

Commercials will feature more models who “look like real people,” West said.

One more piece of research that West shared: 94 percent of Americans walk by a penny and don’t stop to pick it up. She says she plans to make it worth something at Penney.

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