This story’s been making the rounds since yesterday, and I just shook my head when I read it. Who couldn’t have predicted this months ago? From the Huffington Post:
Ron Johnson, the new star CEO of J.C. Penney, wishes that couponing fanatics would just listen to him already and stop fussing with those little scraps of paper.
“Coupons were a drug,” said the CEO on Tuesday evening at a conference with analysts. Earlier that day, J.C. Penney announced abysmal results for the first three months of this year, with sales plummeting 18.9 percent at stores open at least a year. Net losses for the period were $55 million. Executives blamed the results on the departure of deal-hunting shoppers after the company changed its pricing strategy in early February to abandon coupons.
“We did not realize how deep some of the customers were into this,” noted COO Michael Kramer about couponing. “We’ve got to wean them off this and educate our consumers.”
The article continues: “History lies on the side of coupons. Macy’s once tried and failed to reduce coupons after it acquired May Department Stores in 2005, leading to consumer backlash, weak sales and a declining stock price.”
Nearly every major company that has tried to get rid of coupons has felt consumer backlash. Way back in 1996, Procter & Gamble experimented with getting rid of its coupon insert entirely in three test-market areas in New York. Guess what happened — they abandoned the project because their competitors, who still offered coupons, were taking P&G’s market share… to the tune of 48% increases in sales! The Supermarket News story on P&G’s no-coupons test noted that Procter & Gamble was discontinuing coupons “in an effort to prove that coupons are an expensive and wasteful promotional practice.”
Guess who’s still got coupons today?
When the coupons go away, so do the shoppers.
Personally, I never went into JC Penney without a coupon — but when the coupon motivated me to take the trip to the store, I usually came home with more than the $10 worth of “free” stuff the coupon sent me in the store to get. Sears Outlet offers a coupon for one free item of clothing nearly every Tuesday, and guess what days I go to their store? Tuesdays. Yes, it’s to get the free item, but do I come home with other things too? Sure!
Interestingly, Carson’s ran a $10-off-$10 coupon in the Tribune on Thursday, the same day that this article hit the news. It’s good today and tomorrow, 5/18 and 5/19. Guess where your competitors are shopping today, JC Penney?
hwendt12 says
What all of those BUSINESS DEGREES on the walls of these CFO’s means, anyway. You, I and a whole-lot of your followers could have WAY predicted this the day that they rolled this whole thing OUT!!!! Not to mention, did they NOT look at the historical data from the other stores that tried the same strategy??? I’m thinking they would have been better-off ASKING their customers about their buying habits and how they felt about this before shelling out all of the money they did to promote their new approach, only to fall FLAT on their faces less than 6 months later. Sheeeeshhhhhh!
kimberly a.h. says
I found the cutest purse at penneys last weekend and decided to pass on it because it was $35…if I had a coupon or they were having a sale, I would have bought it and looked around at the clothes. My mom also passed up a purse at penneys and bought a more expensive one on sale at Sears. And, I don’t get the ‘sales’ JCP is promoting…which Fridays are sale Fridays, what colors are on sale…it makes no sense.
Supermom10 says
I am not surprised. I knew when they started their Friday sales, I would not step foot into this store for anything, only to Sephora for my free birthday item! I have been finding better deals elsewhere!! I am very disappointed in their language of their customers.
stringofpearls says
It is obvious the ceo does not understand JC Penney’s customers, their behavior, nor the economy right now. Oh and thanks for the heads up about the Carson’s coupon in the newspaper yesterday- I still haven’t recycled it, so I will go ahead and pull it out and use it! :)
dolrskolr says
like almost see the spider webs forming when this idiotic move was announced. Mr. Johnson, who’s the uneducated one? Instead of trying to convert us ‘little scraps of paper fussers’ why don’t you just man up and give us what we want … that is, IF you want to keep the doors open.
Truthfully, JCP is on its way out … been dying a long, long time. Even with their coupons, I just wasn’t interested. Nor did I ever participte in the Sears free clothing Tuesdays. Too pissed off about their piece o’ crap vacuum we paid big bucks for. Oh, and the fact never could find bags for it in stock. Always had to get at Target or Meijer. Go figure.
Both should quietly turn off the lights and close the doors. Party’s been going on elsewhere for quite awhile.
Rocketmom60 says
The executive at JCP is so typical of self-righteous, arrogant elites who think the masses are uneducated and need to be enlightened by their superiors. To say coupon users need to be educated is absolutely insulting, and while I usually laugh when people whine about being dis-respected, this time it really got on my nerves. I don’t make purchasing decisions regarding products based on coupons. I buy what I want and if a coupon accompanies it, all the better. This executive needs a reality check.
SouthernReverie says
The lack of coupons is only one piece of the puzzle, according to the comments I have been reading about Penney’s on other websites. There is another major reason Penney’s has lost sales. First they chose Ellen DeGeneres as their spokesperson. I didn’t have a problem with that, although other people I know were uncomfortable with it. I felt that they hired her for her winning personality, and that her sexuality was not a factor. Then I saw a “my two mommies” Penney’s ad. The two together begins to look like a “gay agenda.” This has been much talked about on conservative websites. Many Christians have stopped shopping at Penney’s for this reason.
Now I read this article with the CEOs comments, and he has taken the arrogant attitude that we just need to be educated by smarter people like him. Whether you realize it or not, the “gay agenda” I refer to has little to do with sexuality, and everthing to do with educating us ignorant folk who just don’t know any better. It is this arrogance that offends most people. Now, as far as I’m concerned, with all these factors put together, Penney’s has crossed the line. I will not be shopping there anymore.
Flag1 says
Maybe Chase bank will hire him next. :)
He is about as arrogant as you can get. Blame the consumers for his/their failed attempt to bring in more customers? I planned on purchasing my husband’s new slippers for Father’s Day at J.C. Penney but will go to Dillards and pay full price instead. (He is very picky about slippers and the cheaper stores don’t carry them)
Frugal Skills says
I was pleased when I first heard about their overhaul. I hate Kohl’s pricing strategy of pricing clothes high, and then putting everything “on sale” to make it seem like you’re getting a deal. I hate Macy’s coupons that have paragraphs of fine print. If I was looking to distinguish my store in this market, I probably would have gone for the “honest pricing” niche, too. I can’t blame them for trying.
Unfortunately, it looks like their PR and marketing departments dropped the ball. Obviously they didn’t do a good job of selling the new concept. The Ellen controversy turned into a political football instead of keeping the focus on the brand and the clothes. And blaming the customers for “just not getting it” doesn’t help anyone.
Green Is Good says
I have actually found some cute stuff in the best price section for my daughter. Today I got a dress on best price for $11 and used a $10 JCP rewards coupon and got it for only $1.
So they do still give you coupons for the JCP rewards program.
coupnewbie says
While I’m not surprised that they say they will stick with the new program, I’m a little surprised by this comment:
“Mr. Johnson said that a year ago, only one out of every 500 items was purchased at regular price. During the first quarter, 67% of products were purchased at the highest ticketed price.
‘This is profound,’ Mr. Johnson said. ‘People are now buying at the first price, [the] right price. That’s the dream of every retailer.'”
I kind of resent the idea that the right price is the highest price. I understand that it’s right for JCP’s bottom line, but it’s not right for my budget.
(AdAge: https://adage.com/article/news/shaky-start-jc-penney-stands-firm-reinvention-plan/234874/)
Dallasailororiginal says
I did a review on an item I had purchased. JCP had it as a BEST BUY at $15.00. I purchased the shortie pj’s two month’s previously for $11.00, regular price–not on sale! The new CEO must think us regular repeat customers are idiots. We know what JCP pricing was on sooo many items. By the way, I used a $10 Reward Certificate to buy the shortie pj’s on line, shipped to store for free for $1.00,plus tax, total, since their price was $ 11.00! He and his staff need to wake up and smell the coffee; ’cause we’ll all be shopping elsewhere.
By the way, for many years Sears got it’s profit with it’s own credit card. Now it’s always empty (so I hear), haven’t been in a Sears store in twenty years.