• by Sarah Mahoney  @mahoney_sarah, August 1, 2012

These days, beating up on JCPenney is almost as satisfying a sport as cheering on the USA’s swim team. 

But as the Plano, Tex.-based retailer begins unveiling its controversial new merchandising initiatives, more observers are starting to give the chain the benefit of the doubt. The latest moves include the unveiling of the first of its shops-within-a-shop strategy, including an elaborate denim array. There’s a Levi's denim bar, equipped with iPads and specialists trained in the art of the perfect fit, and mobile checkout technology, a first for the chain. (There’s also “i jeans by Buffalo” for a modern look, and The Original Arizona Jean Co., at lower prices.)

And it’s also sticking to its simplified pricing plan, despite gold-medal bashing from both consumers, investors, and industry wags. (Earlier this summer, though, the chain did cave and reintroduce the word “sale” into its vocabulary.) 

“A lot of what Penney is doing, especially the integration of bricks and clicks, as well as the whole pricing strategy, is really appealing to Millennials,” Kim Finnerty, VP, consumer & shopper insights at HMI’s Ryan Partnership, tells Marketing Daily. And while that may be a great strategy for the future, she says, “the truth is that right now, people are addicted to couponing and bargain hunting and deal seeking. It’s part of the culture. Look at the couponing and fashion-deal shows that are popular on TV. So while every-day low prices make sense, rationally, it’s just hard to implement. People expect a deal.”

In its release detailing the shops, CEO Ron Johnson, increasingly under fire for declining sales and misreading consumer attachment to constant coupons and markdowns, says the new shops, available in 700 stores, give “customers a first glimpse of what will soon be an entirely new retail experience. We know how important it is for kids to make a great first impression, and, with low prices every day, JCPenney is making it easier for parents to shop without having to wait for a sale."

In addition to value variety offered by the small shops (Levi’s cost about $40, for example, while Arizona skinny jeans go for just $17), the company is looking for other ways to sweeten its appeal. As a BTS promotion, it’s offering free haircuts for kids in its salons, for example.

By Sept. 1, many stores will also feature Liz Claiborne and  IZOD shops, as well as the introduction of “jcp,” a new private-label line devoted to fashion basics. 

Finnerty says her company’s research shows that Penney is on the right track with its digital initiatives, including its email, apps and social media strategy. “These tools really are driving behavioral changes,” she says, “and give consumers ways to share about the bargains and values they find while shopping. It encourages people to brag and talk about the bargains they find.”