Posted by Dale Buss on June 6, 2012 12:14 PM
JCPenney has a newfound love for "sale." Ron Johnson, the CEO of JCPenney, this week continued his efforts to claw back the troubled retailer's new business model this week by telling an investment meeting that the company now will be moving away from the implausible term "month-long value" that was introduced in January as part of its new pricing strategy in favor of re-embracing a word that had become verboten at Penney HQ of late: "sale."
"No one really understood [month-long value]," he told the Piper Jaffray Consumer Conference in New York on Tuesday about why the retailer is re-embracing the S-word after making a big splash about dropping it back in January. "What we intend to do is a sale. We run 12 a year."
Yes, Johnson is busy backpedaling from one of the ribs of Penney's new business model — to eschew sales and other "confusing" consumer promotions in favor of an everyday-low price strategy — following dismal first quarter results that saw coupon-clipping moms stay away in droves.
JCP's new pricing strategy was supposed to be a transformative move in keeping with the way that cash-strapped American consumers really shop (on or after payday) — just ask Ellen Degeneres, who helped kick off the new approach for Penney in a TV campaign that tapped into the Oscars telecast in February.
But all the new pricing plan did was tick off consumers who are culturally attuned to such promotions, sack Penney's bottom line, and perhaps leave Johnson wishing he'd never left his executive post at Apple to attempt to revolutionize bricks-and-mortar retailing.
It's just the latest move "backward" by Johnson, who unveiled his "No!" campaign that derided sales just a few months ago. Last week the company revealed that it was planning a few more "Best Price Friday" promotions throughout the year than it had initially planned under the new strategy.
Yet Johnson insisted, even on Tuesday, that "the back half" of the year "will be better; the customer will understand" and said that vendors remain on board and advertising expenses will go down as Penney continues to rein in those nasty promotions.
The brand is going to continue to spend to "get the pricing message across," he said, according to Ad Age. But will any consumers — other than outraged conservative moms — be listening?