I truly admire JCPenney’s CEO Ron Johnson; I really do. I admire his risk-taking, his emphasis on innovation, and the high level of importance he puts on brand. I recognize him for the visionary he is, but I sadly must admit that his current JCP vision is fuzzy.
Since assuming leadership of JCPenney, Johnson sought to change the way consumers shopped. He introduced a novel ‘fair and square’ plan that aimed to simplify shopping by eliminating coupons and round prices to whole numbers. Gone would be the days of coupon hunting and fake pricing and in its place would be a better, simpler shopping day. Or not.
The not can be seen in decreasing sales for JCP stores and customer confusion, yes, confusion, by this new pricing policy. Women in particular have rebuked this innovate strategy by simple choosing other stores and shopping and JCP less. It seems for all of his good intentions and creative-thinking that Johnson committed a cardinal sin – not taking into account the JCP consumer.
This reinvention of pricing and shopping as a whole is truly innovative, but it just isn’t effective, at least not at JCP. What Johnson has failed to understand is the need to understand the core consumer. Building from their core needs is the true way to start from square one.
I respect that attempt that Johnson is making here by trying to differentiate and redefine the JCP brand, since it certainly needed it, but I don’t understand how this large-scale consumer miscalculation could happen.
Wouldn’t qualitative data have shown that JCP shoppers, especially the female ones, actually like collecting coupons? Wouldn’t this research have highlighted the sense of empowerment that couponing gives to shoppers? Or on a smaller scale, wouldn’t research or small-scale testing give needed insight on reactions to coupon-free, everyday low price (a.k.a no sales since none are needed) shopping? I just can’t get over this lack, or perhaps disregarding, of data.
As Kate Barton, associate marketing manager at General Mills, said at Harvard Business School‘s Marketing Innovation Conference, it is important to “find the brand mission and purpose and orient innovation around it.” Perhaps Johnson is doing this through his innovate attempts to reinvent JCP, but the biggest rule is always the bottom line and sadly the actual results are currently at rock bottom.
With large-scale holiday shopping around the corner, including the ever important Black Friday, what will Johnson do? He has already offered freebies like haircuts and family portraits, which are not coupons, but is that innovation or just a cheap way to cut the corner?
The truth is that promotions drive consumers, like me, to stores, and unless the store is Apple, that is unlikely to change. I am a fan of what Johnson is attempting to do and I would love nothing more than for his idea to be given the time it deserves, but it is getting late early and results are needed.
Johnson claims to have a JCP reaction up his sleeve that will drive holiday shoppers to his stores, and I am eager to see what it will be. Since I expect it not to be couponing, which would be a sad representation of failure, I am curious to see Johnson will do. I just hope that it takes into account the needs/wants/desires of JCP customers so it can be a major success.
As I said before, I am a fan of innovators like Johnson and, as such, I am rooting for an awe-inspiring JCP shopping innovation and, with it, a HUGE quarterly explosion!