Well, that didn’t take long … J.C. Penney emailing hundreds of discount prices out yesterday for 4th of July week:
The department-store chain — whose CEO Ron Johnson clamped down in February on coupons and clearances with a rigid new pricing strategy — e-mailed shoppers yesterday with thousands of surprise discounts.
While Johnson’s “Fair and Square” pricing had originally limited clearance sales to “Best Price Fridays” occurring every other week, yesterday’s discounts immediately followed a round of discounting the week before.
Read more at The New York Post
And it’s too bad … but not surprising.
For J.C. Penney to fully realize the results of a strategic change of this magnitude?
It’d take twenty years. Maybe thirty. They would have to be consistent for a new generation to wake up never knowing J.C. Penney for their once-in-a-lifetime-semi-annual-sales.
I hoped they could do it, but it’s such a different world now.
So much noise coming at them loudly braying displeasure.
Maybe a smaller company … a perceived hipper brand like Banana Republic could have not only gotten away with such a strategy but have been celebrated for the bold move by the same people deriding J.C. Penney’s choice.
They’re taking a hit this week. They’re falling off the wagon.
All addicts say it’s only one drink/hit/sale.
But we, unfortunately, all know how this ends, don’t we?
I was initially thinking they would need to stick with this for 5 years…but you’re probably right saying 20 or 30. Personally, I don’t think they knew how to ADVERTISE their new strategy. They thought Ellen or a celebrity would be the answer. But they just didn’t know what to communicate their ads. Even if they did…it would probably be for naught because they had trained MULTIPLE generations to wait for the sale.
This should be a lesson for new companies (big or small) to not even go down that road in the first place. Because once you do, it’s pretty hard to turn that ship around.
As they say… one drink is too many and a thousand is not enough. Too bad for JCP.
Tim, GREAT POST!! I couldn’t agree more! This whole situation is playing out in rapid pace like a junior high science class watching fruit flies multiply in a experiment!
Seldom do we get to see such a blatant example of misguided strategy play out so quickly – so completely – from start to (inevitable) finish. This proves that Ron Johnson made one of the most fundamental mistakes in business. He took his eye off the prize…the customers. He lost touch (or never got it to begin with) with his customers, the people who regularly buy goods from JC Penney. I LOVE Apple. I am not fond of JC Penney. I LOVED the new “Fair and Square” campaign. I am not fond of bogus discounts, inflated retail prices and shenanigans. I frequent the Apple Store. I haven’t been to a JC Penney in (literally) years (and even then I know I didn’t buy anything). The new campaign was an awesome idea…IF they were targeting Apple-esque customers. Obviously, many Apple shoppers are not making up the core of JC Penney’s customer base.
20-30 years is probably right, but then again, it is hard to survive that long when you are experiencing double-digit sales drops…in just the first quarter.