J.C. Penney, Kohl's Go for Personalization

Retailers Hope Targeted, Digital Campaigns Will Prove More Efficient

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After reporting less-than-stellar earnings last week, retailers including J.C. Penney and Kohl's are looking to save money by crafting more personalized marketing strategies, swapping out traditional media buys for digital campaigns they hope will prove more efficient.

The approach mimics that of Macy's, which has focused on personalization and local efforts since initiating My Macy's in 2009, a program that gave local executives more power.

Mary Beth West
Mary Beth West

Last month, J.C. Penney named Mary Beth West as both CMO and chief customer officer, succeeding CMO Debra Berman and expanding the post. The new dual role aims to give the company's marketers more access to its trove of information on shoppers.

"We have rich customer data," said Marvin Ellison, who succeeded Myron Ullman as president and CEO at J.C. Penney last month, on a conference call. "We don't necessarily do the best job of using that data to communicate with our customers."

The company, which reported lower advertising spending last quarter, hopes the new approach will generate even more savings. "We think more one-to-one marketing, leveraging digital ... vs. the traditional media will save us money and give us more impressions," said Mr. Ellison.

Kohl's also plans to make better use of its growing collection of customer data. The retailer's digital wallet, cobranded credit card and Yes2You loyalty program, which launched nationwide in October, are helping it learn more about its shoppers. It's using the information to deliver targeted messages, such as personalized deals delivered through the wallet app and custom direct-mail campaigns.

"Loyalty is very important," Kohl's CEO Kevin Mansell said on a conference call. "Longer term, personalization is probably more important because [it] has a big impact around the effectiveness of our marketing and driving more traffic into the stores."

The retailer aims to create 5 billion "personalized touches" this year and implement localized strategies in every store, Mr. Mansell said.

J.C. Penney's net sales rose 2% last quarter and same-store sales increased 3.4% for the period, just shy of analysts' expectations. Kohl's reported weaker-than-expected earnings last quarter; net sales rose 1.3%, while comparable store sales advanced 1.4%. Macy's saw 0.7% drop in both net sales and same-store sales.

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