You know a company is in trouble when a top executive opens a conference by denying that he and his boss are resigning. But as JCPenney brings back sales, coupons and discontinued brands as part of a plan to turn around its turnaround plan, some of its competitors are chuckling, and reminding customers they never did away with coupons and sales to begin with.
“I am not resigning, Ron is not resigning,” JCP Chief Financial Officer Ken Hannah told an investors conference in New York yesterday, referring to CEO Ron Johnson. “It is no surprise we had a tough year last year, and I want to make sure that you guys all understand, Ron and I are not going to go hide.”
Johnson had previously announced plans to phase sales and coupons back into the mix (read: “JCP Gives Up the Game, Calls a Coupon a Coupon”), a year after he tried eliminating them. Though, while he now acknowledges that a coupon is a coupon, he hasn’t quite given up the corporate double speak of calling them “gifts”.
Last week, JCP emailed many customers a “gift” for $5 off a $5 purchase. There was a bit of confusion, though, when some sites shared a link to a “blank” coupon that had no unique ID code. The codes, which were necessary to redeem the coupons, were only included on coupons that arrived in subscribers’ email. This week, however, JCP has released a coupon for $10 off a purchase of $50 or more, that’s available for anyone to print from its website. The offer is good through Sunday, March 17th.
“40% of all of our transactions prior to the transformation were happening with a coupon or a promotion,” Hannah said, “and a lot of times, it was 80%.” The return of coupons, he said, indicates that “we hear our customers loud and clear.”
But coupons and sales aren’t the only things returning to JCP. Hannah said some customers’ favorite products will be returning as well. “The basic denim, khaki, St. John’s Bay for women… you are going to see some assortment that was edited out that the customer has been screaming loud and clear that’s been missing,” Hannah said, calling their disappearance a “huge, huge miss” on JCP’s part. Those items will begin returning next month, after customers “voted with their money, and they took it somewhere else.”
Among the places customers took their money, were Stage Stores. The Houston-based company, which operates under the names Bealls, Palais Royal, Peebles and Stage, said at the same conference yesterday that it learned from JCP’s mistakes. “In the past, we never did a $10 off $25 coupon,” Stage CEO Michael Glazer said. “That was the old Penney’s that people used to do. So we did something like that.” He joked that investors who have a stake in his company “should stand in the Penney’s parking lot and hand out coupons, because we like coupons.”
Stage picked up an additional 1% in sales, or about $16 million, last year as a result of people coming over from JCP. Glazer acknowledged that wasn’t “much of an impact”, but said “all the soap opera aspects” of JCP’s woes were simply “so much fun to talk about.”
So he continued talking about them. Unlike JCP, Glazer said, his stores are being more careful with efforts to attract younger customers. “Everybody wants that younger customer,” he said, “and we’ve seen many examples of that, obviously, JCP being one of them.” But he added that it’s “important not to lose sight of who our customer is, and it is an older customer that we cater to, and the most important thing is to keep that customer.”
Also at the same conference, Bon-Ton CEO Brendan Hoffman assured investors that his company had “made it clear, both to our associates and to our customers, that we are a coupon-friendly retailer.” Around the same time that JCP announced its no-coupons strategy last year, Bon-Ton did the opposite, ramping up its use of coupons (read: “Not Every Department Store Hates Coupons”). And Hoffman says it’s working. “We were able to bring traffic back into the stores through customer-friendly events centered on our use of the savings coupons.”
Then there’s Macy’s. Chief Financial Officer Karen Hoguet has been cautiously critical of JCP since it launched its new strategy. And yesterday was no different. At first, she didn’t want to answer a question about how Macy’s is benefiting from JCP’s stumbles. Then she relented, and whacked JCP, by saying there’s simply not much overlap between the two companies. “There’s a lot of our customers that are well above shopping at Penney,” she sniffed.
“We’ve certainly made our mistakes,” JCP’s Hannah concluded. “Transformation takes time.” But while JCP continues to bleed billions, its competitors are merely shaking their heads and chuckling – all the way to the bank.
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