Celebrity Brands vs Everyday Prices
May 17, 2012,
At right: Linden Street is JCPenney’s private label brand that claims to offer quick drying, energy efficient towels.
That's the question for consumers deciding between Kohl's, which is home to celebrity brands by entertainment mega star Jennifer Lopez and fashion designer Vera Wang, and JCPenney, which recently implemented a radical new pricing system designed to wean shoppers from frequent promotions in favor of low daily prices.
HTT visited both stores in the Green Acres Mall in the Long Island suburb of Valley Stream, N.Y., as part of the "Face to Face" series, which compares similar merchandising classifications at pairs of competing retailers. Retailers did not return requests for comment as of deadline.
In February, JCPenney began offering "fair and square" pricing, cutting store prices by 40% and getting rid of almost all of its 590 promotions and discounts. The goal is to encourage consumers to shop on a more regular basis and feel confident they are getting the best price on any given day. Pricing is on three tiers: everyday prices that eliminate the need for coupons, month-long values that offer a sale price for an entire month and best prices, markdowns for the first and third Friday - paydays for many consumers.
The price cuts create a noticeable difference between the retailers. Seven out of the nine towel collections on store shelves at Kohl's offer
Below: Towels by celebrity Jennifer Lopez recently made a splash at Kohl’s.
Four collections sold in Kohl's stores include bath towels priced above $20, with the other four collections pricing bath towels below $20. (One collection did not appear to include bath towels). At JCPenney, none of the bath towels sold in stores was priced over $20 - several were priced below $10, with some as low as $4 and $5.
In January, when JCPenney ceo Ron Johnson laid out the vision for transforming the 110-year-old department store, he said a core JCPenney towel that retailed at $10 actually leaves the store, after discounts, at $3.30. And so its new everyday price is $4 and its "best" price will be $2. Prices at JCPenney now use round numbers exclusively - so wash cloths are $ 5 , not $5.99. It renders moot a murky retailing mystery: does 99 cents signify a bargain to consumers or do consumers disregard the cents portion of the price tag?
At Kohl's, Jennifer Lopez's name stands alone above her towel collection, which features tasteful silver signage that coordinates with her silver tags and labels. A small photo of Lopez is positioned at eye level. Vera Wang's two collections, under the Simply Vera brand, feature the only fiber blend seen in either store with 70% viscose and 30 % cotton, as well as a Microcotton collection. The merchandising of her line also includes a small photo.
Both collections feature a limited color palette that includes fashion colors: pink for Lopez and eggplant and purplish gray for Wang. The dobby for both Lopez and Simply Vera towels appears more upscale, with a basket-like weave on the Jennifer Lopez towels and a striped pattern on Wang's.
At right: At JCPenney, towel prices are clearly marked on signs.
The celebrity brands are priced on the higher side of Kohl's solid colored towels, but are not the only higher priced ones. Chaps Home, a private label, is the second highest-priced solid color tow el line.
Like American Living at JCPenney, Chaps Home at Kohl's was created in conjunction with design powerhouse Polo Ralph Lauren. Sourced directly by Kohl's, Chaps Home was a huge launch for the retailer in 2007, and the first national brand that Kohl's carried in each of its major departments.
American Living, introduced in 2008, was the largest brand launch to date in the JCPenney's history and was initially intended for the retailer's "best" pricing category. At Valley Stream, American Living towels were priced mid-range. Earlier this year, Ralph Lauren's president said the company and JCPenney had decided to discontinue the American Living line.
Kohl's has several other private labels: Apt. 9, Sonoma life + style, Croft & Barrow and The Big One. Pricing for the first two is similar, with towels in the mid to high teens, and prices are similar for the latter two, with prices under $10.
Private label brands at JCPenney are limited to the Linden Street and JCP Home labels. The two Linden Street collections are the highest-priciest solid color towel lines - yet they would compete with nearly the lowest priced solid colored towels at Kohl's. The Linden Street Quick Dri towels carry hang tags that describe the product's energy efficiency: they reduce drying time by 33% compared to other towels.
The JCP Home brand featured
At left: A display of JCP Home Pure Perfection towels compared a new towel to one that had been washed 50 times.
The other national brand at JCPenney is Liz Claiborne, which is now owned by the retailer. Liz Claiborne solid colored towels feature a low twist cotton and at the Green Acres Mall, were positioned in the front of the department.
Online, shoppers for solid colored towels can find slightly more selection, but not a whole lot more. At jcpenney.com, there are more colors and some brand extensions, such as American Living Hamilton Towels and Home Expressions from JCP Home, which were not seen in the store. In addition, towels are also sold in sets, such as the 6-piece JCP Home Pure Perfection set for $30. If bought individually, the same towels would total $36.
At kohls.com, there was an online exclusive towel collection, the Smart Dry six-piece set for $89.99. And compared to the store, a wider range of colors also appeared to be available online.
While JCPenney has largely eliminated its promotions, Kohl's has not. In the Valley Stream location, shelves in the towel department featured multiple small LCD screens with details of a buy one, get one free promotion. Printed signs with the same information were perched on top of each screen.
Circulars from JCPenney look quite different now - more akin to editorial pages, with far fewer images of products and screaming discounts. In the 12-page circular, with pages roughly 10-inch square, a total of 11 products are identified by description and price.
A Kohl's circular, with its super tabloid size of 21 inches long by 10.5 wide, is anchored by headlines touting savings and discounts of up to 30% and $10 Kohl's cash for every $50 spent. In a 10-page spread, there are over 150 photos of products and models, often showing multiple items in a single photo, for a huge array of discounts.
|At right: Apt. 9 is a private
label brand at Kohl’s.|
|At left:Towels by celebrity
Jennifer Lopez recently made a
splash at Kohl’s.|
|Chaps Home towels at Kohl’s.
Chaps is the No. 1 brand at
Kohl’s, according to Ralph
|JCP Home Pure Perfection
towels line the wall at the
Valley Stream store location.|
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