It’s been a month or so since we last ragged on JCPenney’s CEO, who famously abolished discounts and coupons at his stores, then watched the company’s sales figures and credit rating plummet (read: “JCPenney Coupons and the CEO: Only One Can Survive”).
Now, in a new interview, Ron Johnson manages to further alienate himself from the couponing community. His focus in a Businessweek article is on the progress of his JCPenney reinvention plans. He discusses the remodeled stores, new displays, new mannequins with “more energy, better style”, and his plans to give every employee checkout iPads, to replace cashiers. His smooth sales pitch managed to reassure investors today, despite another quarter of dismal results. And he confidently asked customers this week to send a note and “let me know how we’re doing.”
But in defending his decision to do away with coupons, which upset many of his couponing customers, Johnson admits that he just doesn’t get the whole coupon thing. The man who once said “coupons were a drug” (thereby insinuating that JCPenney coupon users were actual “users”?), now tells Businessweek, “I thought people were just tired of coupons. The reality is, there were a certain part of the customers that loved it. I didn’t understand that.”
Johnson does insist that JCPenney’s new prices are “about the same as you got before with the coupon”, and declares that “about half of what we buy in everyday life, we buy at an everyday price — Starbucks coffee, an Apple product.” In another name-drop of his former employer, he notes, “The Apple store never used a coupon.”
But therein lies the problem. He’s trying to remake the chain from a “sales and coupons” supermarket-type model to an “everyday low prices” Walmart model. The Apple Store is Walmart – it doesn’t offer sales and coupons, so its customers haven’t come to rely on them. JCPenney is the supermarket – you’ll pay more, unless you know how to work the deals, then you’ll pay a whole lot less. It doesn’t matter that he’s lowering prices to make up for the lack of coupons and deals. Loyal couponing customers who enjoy the thrill of the hunt don’t want to pay the same price as the next customer who just walked in and didn’t even try.
If coupons are a drug, Business Insider recently quoted an emailer, “we consumers still need the HIGH.” The unnamed “loyal, long-time JCPenney customer” goes on to compare that “high” to dating: “If you are chasing a gorgeous girl that you really want and she is at your reach, but you have a few fun ways to get her, that is so much more fun than having her handed over on a plate. We live for the chase and challenge.”
And getting his customers to accept the loss of this challenge, could prove to be Johnson’s biggest challenge of all.
