JC Penney CEO Ron Johnson capitulates, brings back sales

“J.C. Penney is bringing back sales,” Anne d’Innocenzio reports for The Associated Press. “The struggling department store chain this week will begin adding back some of the hundreds of sales it ditched last year in hopes of luring shoppers who were turned off when the discounts disappeared, CEO Ron Johnson told The Associated Press.”

“Penney also plans to add price tags or signs for more than half of its merchandise to show customers how much they’re saving by shopping at the chain — a strategy used by a few other retailers,” d’Innocenzio reports. “For store branded items such as Arizona, Penney will show comparison prices from competitors. The moves are a reversal for Penney on the eve of the one-year anniversary when it vowed to almost completely get rid of the sales that Americans covet but that cut into a store’s profits. The idea was to offer everyday low prices that customers could count on rather than the nearly 600 fleeting discounts, coupons and sales it once offered.”

d’Innocenzio reports, “Johnson, who rolled out the pricing plan shortly after taking the top job in November 2011, told The Associated Press that the latest moves are not a “deviation” from his strategy but rather an ‘evolution.'”

Read more in the full article here.

MacDailyNews Take: An evolution in pedaling, in this case, “back.”

Forget this department store crap and come on back, Ron! After a brief clown show, Tim’s hiring.

Related articles:
Apple retail’s Ron Johnson and John Browett have proved the Peter Principle is alive and well – November 13, 2012
CEO Ron Johnson switches J.C. Penney to two-tier pricing with price-match guarantee – July 26, 2012
Why is Ron Johnson’s retail strategy for J.C. Penney failing? – June 26, 2012
J.C Penney’s stock tumbles after key exec’s abrupt exit – June 19, 2012
J.C. Penney reports loss and plummeting sales in 1Q – May 15, 2012
Why Ron Johnson left Apple to head JC Penney – April 30, 2012
J.C. Penney lures another executive from Apple – April 26, 2012
Steve Jobs’ ex-lieutenant Ron Johnson adds $1.5 billion to J.C. Penney in two days – January 30, 2012
J.C. Penney CEO Ron Johnson: What I learned building the Apple Store – November 21, 2011
New J.C. Penney CEO Johnson hiring former Apple co-workers – November 9, 2011
Why Apple’s retail genius Ron Johnson is paying for the privilege of running J.C. Penney – June 15, 2011
Apple’s retail store chief Johnson off to J.C. Penney; expected to become CEO within months – June 14, 2011

17 Comments

  1. Don’t know about the rest of you, but my mailbox was blasted with 2-3 Penny’s ads a week… I found it annoying and ignored them after a while, tossing them into the garbage without even looking at them. I found the new approach very refreshing knowing I could walk into the store and make a purchase without the remorse of missing a sale.

    1. Then you are a minority.

      Most people can not rebuild themselves to get used to the new paradigm just in one year. Johnson thought that it would be possible, or that he would be given two years for that, not one year. However, the board of directors lost belief in this plan and pressured him to revise the strategy.

    2. I agree. I didn’t start going back to JCP until they stopped those incessant sales. JCP was operating like the entire furniture industry: you could never figure out if you were getting a decent deal or not.

    1. Absolutely. He may or may not be a marketing genius? But JCPenney is dead in the water. It was before he got there and certainly is now. Given enough time he might have been able to have turned it around but I doubt it. It was a bad idea from the start. Poor planning on the people that hired him and RJ himself. JCPenney doesn’t have enough money to undergo such an overhaul of its business. They just can’t bleed money forever. That should have been clear in the beginning. It could have been done with a small retailer with much smaller brick-and-mortar stores. But JCPenney and RJ are doomed. Sure, bring him back to Apple. That would be a great idea. But you know that he will never do that.

  2. Johnson made a lot of changes to JC Penney. Ditching the sales was just one of them, and bringing them back is only a course correction.

    It shows that he listens to his customers, and now he has learned that his company’s bottom line is highly sensitive to their particular shopping habits—more than anyone knew.

    The psychology of coupon-clipping and sale-watching involves a perceived belief of receiving value, whether or not it actually does. That psychology results in ritual social behaviors, like massing crowds and waitlisting, that increase sales volumes. He knew this from his time at Target and Mervyn’s. Just the same, emboldened by his success at Apple, he dared to experiment with the formula.

    I don’t think he caved to the BOD. I think he finally listened to his wife.

  3. JC Penney has a bigger problem than sale pricing – it’s called Walmart, K-Mart, Sears, Target, Mervyns, Ross, Family Dollar, Dollar General and a slew of other stores all competing for the same dollar.

    And the truth is that JC Penney products aren’t Apple products. People will pay a premium for Apple, but nothing at Penney’s can command that loyalty.

    Go back to Apple, where your experience and ability is needed and leet JC Penney go it’s way.

    1. True. They could become a high value offering, but they aren’t right now. Dockers from jcp are no different from Sears or Kohls. Apple Stores get to sell Apple products. There is no clear brand leader in most consumer lines.

      I agree. Go back to Apple. He knows the territory and Apple would be protected from more asshats who don’t.

  4. Also, most folks if there’s not a sale, think they’re paying a high price. I think he should’ve instituted the signage from the get go, then people would see it in the store and get used to it, not just be told that’s how it is.

  5. I have not set foot in a JCP store in a very, very long time and still have no reason to do so. The store is the answer to the question few are asking these days.

    I admire RJ for taking a shot at changing the business model, but changing an engrained habit in favor of something more logical is a difficult thing to pull off. Look at how many Windows afflicted there are at this late date.

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