No more newspaper ads: Why J.C. Penney is going digital-first this holiday season
December 9, 2022 | By Kimeko McCoy
As more shoppers shift to making purchases online, J.C. Penney is making a shift too. The legacy retailer is shifting its ad strategy this year to meet shoppers where they are across the digital landscape, specifically via social media, search and influencers.
“It also gives us the opportunity to be more flexible and meet the shifting timing needs of the consumers purchasing,” said Bill Cunningham, vp of marketing at J.C. Penney. “We’re less locked in [to a media buy] and able to move our messaging around digitally to make sure that we’re with the customer when they’re ready to shop.”
Over the past year, J.C. Penney has made a bigger push into digital marketing than in years prior, spending at least three-quarters of its ad budget on performance marketing, paid search, social media, influencers and comparison shopping engines over linear television and newspaper inserts, per Cunningham. (He declined to offer further details on J.C. Penney’s media spend.)
In fact, J.C. Penney completely eliminated newspaper ad inserts out of its media mix ahead of Black Friday shopping (which has been starting earlier every year). “We really took stock of that and focused on putting all our energy and efforts against a digital ad versus putting our energy into a newspaper inserted ad,” Cunningham added, “which was historically how we would have approached the peak of the season in the market.”
The move by Penney’s is an attempt to capture a portion of online shoppers and keep up with global e-commerce trends, which have seen online sales steadily climb since the onset of the pandemic in 2020. By 2023, forecasters expect e-commerce to make up 20% of retail sales worldwide, up from 19.7% this year, according to eMarketer. In 2019, eMarketer reported that e-commerce made up 14% of global retail sales. There is a lot at stake for J.C. Penney when it comes to e-commerce, especially as the retailer has been lagging behind competitors in sales and continues to deal with a high amount of debt that worsened when it fell into bankruptcy not long after the pandemic began in 2020. (More on how the brand hoped to turn it around in 2019 here.)
Cunningham said launching holiday marketing earlier than normal and focusing on digital has resulted in earlier shopper interest and engagement. (He did not offer further details, including sales or website metrics.)
From January to June of this year, J.C. Penney spent more than $161 million on advertising, up from the nearly $113 million spent last year during that same time frame, according to Kantar. Per Pathmatics, the retailer spent at least $35 million on digital media so far this year, slightly less than the nearly $38 million spent in 2021. (Kantar does not track social media spending as Pathmatics does.)
For a legacy brand like J.C. Penney, a digital-first strategy allows the brand to not only tap into online communities, but also build its own community, thus boosting brand awareness and relevance, said Rebecca Sisson, brand strategist at Proverb marketing agency.
“A predominately digital strategy can be a good move for brands at several different growth stages,” Sisson said in an email. “The data you can harness alone is a powerful enough tool that can make the investment in digital worth it for any brand.”
It’s something Target has done well, by bringing audiences together via user-generated content and harnessing the power of content like “Target Shop with Me” on YouTube, Sisson added.
Since at least last year, Penney’s has steadily been putting more investment behind online channels to create a direct line of communication with shoppers, per Cunningham. Next year, Cunningham said the brand will look to boost brand consideration to push shoppers to purchase and engage them to keep the brand top of mind in 2023.
“We’re really focused in on reaching our customers in a one-to-one approach and really focusing on targeting to customers the items, the products and the statements that resonate most with them,” he said.
Digiday Top Stories
Starting with a small group of members and employees, Starbucks will invite participants into “journeys” that allow them to collect NFTs and points that unlock new benefits and experiences.
Influencer marketing is maturing as a business for many media firms, as they find ways to leverage creator content and gain new audiences.
Unlike other publishers such as Activision Blizzard and Riot Games, which have pumped millions of dollars into organizing and marketing esports leagues for their titles, Nintendo has never offered serious prize money for competitive Smash events.
Known for being a brand of indestructible coolers, cups and increasingly lifestyle apparel, Yeti has been evolving from a wholesale company to one that markets more like a direct-to-consumer company as it experiments on platforms like TikTok, Pinterest and its own media properties.
OOH ads for the startup, best known for offering wedding registries, will not only be in the Rockefeller Center subway station (where they are hoping to capture the attention of couples going to visit the Christmas tree) but also with subway digital ads, billboards near Bryant Park as well as downtown in Soho and with wild postings throughout the city.