Walking the Tightrope: Delicate Balancing Act For JC Penney's New CMO

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Marci Grebstein
Marci Grebstein Credit: JC Penney

Growing up in a lower middle-income family outside Boston in the '70s, Marci Grebstein used to spend August circling items in the JC Penney catalog for her back-to-school wishlist. Now, as the newly hired chief marketing officer of the beleaguered Texas chain, she's spending the summer studying ways to restore the retailer to relevance.

"JC Penney has been well on its way for the past two years and I can absolutely contribute to that," she said, noting that she thrives on the challenge of a turnaround. "You're able to try new things, innovate, test and learn—those are the things that I found this organization is ready and willing to do."

If Grebstein, who joined JC Penney in May, wants a turnaround candidate, then she's certainly got one. Like its brick-and-mortar competitors, JC Penney has seen sales plummet over the past several years as shoppers shun malls and Amazon rises as a retail destination. But while rival Macy's has a heritage-connection with consumers -- Herald Square will always be a Christmas draw and Target banks on value and its designer collaborations still make pop culture waves -- JC Penney has yet to find its groove. And that is costing the company. The $12.5 billion brand recently reported a 3.5% decline in same-store sales for the first quarter of the year, and missed analyst expectations with revenue of $2.7 billion, a 3.6% drop from the year-earlier period. Around 140 stores are closing this year.

"They've always been in a tricky position," said Kevin Lane Keller, E.B. Osborn professor of marketing at Dartmouth College's Tuck School of Business. "They're in the middle of the dog bone—not high-end, not low-end but somewhere in-between. It's a tough position to play."

Balancing act

The retailer has stayed traditional with its marketing, trying to rectify the brand damage caused by former CEO Ron Johnson's time at the helm, when an edgy plan to eliminate coupons and overhaul the chain's image proved too much for loyal customers to bear. Recent campaigns under agency-of-record McGarryBowen have emphasized JC Penney's trendy fashions and affordable deals on brands like Nike. A new back-to-school push includes a charity donation of socks and underwear to in-need children to the Y and also plays up the brand's app. Last year, JC Penney spent $375.9 million on measured media in the U.S., a 4% drop from 2015, according to Ad Age's Datacenter.

"They've got to be contemporary—it's okay to be conservative and not edgy," said Keller. "But people have to feel like you're plugged into what's happening now…or you'll seem old-fashioned, old news."

Grebstein now has to walk the tightrope of attracting new customers and not alienating those who still remain. A 53-year-old marketing veteran with three decades in the business under her belt, she's worked in a variety of industries, including grocery (Food Lion) office supplies (Staples) and, most recently, home improvement (Lowe's, where her 14-month stint as CMO came to a close as part of a round of layoffs early this year.) But Grebstein, whose parents were both in sales, said she's found her fit with JC Penney. After recently shopping the stores near the brand's Plano, Texas-based headquarters for bedding for her daughter's college apartment, she noted that there's huge potential.

Pulling out all the stops

The 1,000-unit chain has been trying to deliver on that opportunity through a host of recent initiatives designed to broaden its base. Last year, it returned to selling appliances for the first time in three decades and met with early success. More recent debuts include toy shops in stores, a b-to-b hospitality offering and the acceptance of Apple Pay within all locations. The brand is also chasing the menswear business with a new campaign from Michael Strahan.

It's Grebstein's task to now spread the word. She and her team of 300 plan to focus on store experiences and activities to drive engagement. She's currently examining JC Penney's media channels, which have traditionally been a blend of TV and digital, to figure out where her dollars are best spent. She is also meeting with agency partners including McGarryBowen to get a handle on holiday, where plans are already well underway.

"This is one of the best kept secrets in retail," said Grebstein. "We've gotta figure out how to tell people to wake up and take notice—the business has morphed."

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