It’s been a mere four months since retailer JCPenney launched its “Fair and Square” pricing and discount initiative under the leadership of then-president Michael Francis. Following a dismal first-quarter 2012 with shares down 8.5 percent, Francis resigned after just eight months at the helm, with the company citing no reason for his departure, according to a June 19 article from Bloomberg.
Fair and Square aims to provide relief from overwhelming coupons and promotions, instead offering consumers a three-tier pricing scheme: 1) Every Day; 2) Month Long Value (including theme sales, such as holiday or back-to-school); and 3) Best Prices (clearance).
JCPenney dared to challenge the status quo: Can a major retailer essentially do away with coupons and live to tell about it? The answer here, it seems, is no. BIGinsight, a Worthington, Ohio, research company, surveyed consumers back in March using its monthly “Hot or Not” feature, finding that more deemed Penney’s approach “not” (58.3 percent) than “hot” (41.7 percent). BIGinsight polled nearly 9,000 consumers for an update this month and over the past three months, those who think JCPenney’s new direction is hot dropped nearly 14 percent. What’s worse, it seems this flop has pushed JCPenney’s customers right into the arms of competitors such as Macy’s.
The problem, of course, is that JCPenney vastly underestimated consumers’ love for bargain-hunting. According to a June 18 article from Forbes, JCPenney CEO Ron Johnson admits that he may have misunderstood how deeply ingrained discounts were to the shopping culture. For better or worse, we are a coupon-hungry lot.
Blame it on being too progressive or being just plain out of touch, Fair and Square missed its mark. (I doubt the Ellen Degeneres debacle helped much either, but I suppose that’s another blog for another day.) What’s your take on JCPenney’s approach? Love it? Hate it? Can JCPenney bounce back without abandoning the program? Will consumers ever be ready to part with their stacks of coupons?