Live from Internet Retailer: J.C. Penney’s Website Insight

Chicago–Once upon a time, J.C. Penney’s Website was an online vehicle to drive brand awareness. Now that brings in more than $1.5 billion in annual sales, the general merchant is directing more of its marketing spend online.

“We have a $1.4 billion marketing budget that we can spend any way we see fit,” said Mike Boylson, executive vice president/chief marketing officer of J.C. Penney during his opening keynote speech at Internet Retailer’s Conference and Expo on June 10. “We see as the number-one place that money will go.”

So why the Web, when its store sales are still doing the bulk of the business? Economic and psychographic reasons certainly come into play: The cost to produce catalogs, direct mail, and newspapers is rising, and print media’s relevance to buyers is shrinking.

“Customer media habits are changing so rapidly,” Boylson said. “We do a lot of pre-print, newspaper inserts, direct mail, and we know that especially the 18-35 age group is not absorbing that media, and it’s declining.”

And when you compare the cost of paper, print, ink, and postage of traditional media vs. the value of digital space, Boylson said it’s become an economic necessity to transfer Penney’s advertising more and more into the digital space.

“So what we’re seeing is push marketing becoming less effective and more expensive,” Boylson said. “The pull marketing – allowing customers to opt in for the marketing messages they would like to receive – is the wave of the future.”

One way Penney’s has already done this was with the recent launch of “Know Before You Go,” a subsite to drive store customers to to see its advertisements, get directions to stores, and to see if a desired item was available at the local store.