• by Jeri Smith , Columnist, August 22, 2013

With a century-old heritage, JCPenney needs a miracle to ensure that it will be around for the next 10 years. The entire industry is watching to see what their next move will be, and all eyes are focused on what ad campaign the new agency of record, Y&R, will produce for the big broadcast reveal.

But this strategy may be missing a crucial element that could be the key to a successful turnaround -- JCPenney needs to reach Hispanic women. And while producing a successful television advertising campaign -- encompassing both General Market and Hispanic consumers -- will be important, there is another channel that presents a significant strategic and more targeted opportunity: social media.

JCPenney is well positioned among Hispanics vs. non-Hispanic women. According to our recent research, JCPenney is named 20% more often by Hispanic women as the store they shop at most frequently than it is among the broader general population of female shoppers. And 29% of female shoppers overall are lapsed JCPenney shoppers, while only 18% of Hispanic females are lapsed.

Within the Hispanic population, JCPenney's best chance for building the brand is to target older, lower-income and less acculturated Hispanics. Based on Ron Johnson's previous failed attempts at a sexy, high-shooting campaign, JCPenney has probably already discovered that their strategy should focus on winning back their loyal customers rather than trying to be something they are not.

Unfortunately, this same research indicates that JCPenney customers are less loyal than those who shop at retailers like Macy's, Sears, Target and Kohl's. JCPenney's core Hispanic shoppers are 5% more likely to also shop at other stores versus the core shoppers of competitive brands, and they do 4% less shopping at JCPenney.

The Hispanic women who do shop at JCPenney are also very active on social media. JCPenney's core Hispanic shoppers are 10 to 15% more likely to have engaged with JCPenney on Facebook over the past 6 months than the core Hispanic shoppers of other retailers. This doesn't necessarily make them more engaged with JCPenney (they are also 3-6% more likely to engage with competitive retailers on Facebook), but it does mean that they are highly involved and receptive to brand messages via social media.

This pattern is indicative of the Hispanic market in general. Hispanics -- particularly those who are less acculturated -- are over two times more likely to engage with brands across social media than Non-Hispanics. For retail, the number one place where Hispanic women will engage with a brand online is on its Web site. On average, 40% of Hispanic women have engaged with retail brands via Web sites, followed by 20% who have engaged on Facebook. In contrast, mobile apps, YouTube, Twitter, blogs and Pinterest attract less than 5% on average, so these are not necessarily the ideal social outlets to reach a large number of Hispanic women.

Compared to the more traditional advertising vehicles, social media presents an arena where consumers can engage with other consumers to ‘buzz’ about the brand, versus to simply listen to an advertiser-generated message (which our research has shown to have high persuasion potential). However, those who do engage with brands via social media outlets already tend to be brand users/fans, so outreach to non-fans may be less likely.

Considering the high potential to reach and persuade Hispanic women through social media, it would be wise for JCPenney to create a targeted and culturally relevant social media strategy. Because few retailers have well-developed, culturally targeted social media strategies in place, this could provide an opportunity to build the brand to its most important customer and help the brand to gain a competitive edge.