JCPenney's Ron Johnson: 'Customers Don't Get Our Pricing Strategy'

by Business Insider May 16th 2012 10:35AM
Updated May 16th 2012 4:56PM
Ron Johnson JCPenneyBy Aimee Groth

On Tuesday, JCPenney CEO Ron Johnson presented on the company's Q1 earnings and its ongoing strategy in New York City. This was right after the company announced that it missed sales expectations by 15%.

He said that its turnaround has been tougher than anticipated but the "transformation is ahead of schedule."

One big problem is that customers don't get the new pricing strategy, which it started rolling out in February. A lot hinges on this.

"Our marketing isn't doing the work. It needs to communicate pricing strategy" and bring in more traffic, he said. "We've got to get our pricing across."
Its new strategy involves weaning people off coupons and getting them to buy products at "everyday" prices. There are also weekly and monthly promotions, but the discounts aren't nearly as steep as they used to be.


"Coupons were a drug, they really drove traffic," Johnson said. "[Customers] need to understand the value we're offering."
He explained that the company is retooling its ads so that its new pricing is clearer and explains its "fair and square" strategy.
The disconnect is proof that if you make things too complicated for the consumer - or don't explain the change in plain language, over and over again - it won't work.


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938 Comments

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andre.marshall1

Mr .Ron Johnson. First i would like to say i liked to shop at your store ta one time. But today i am saddended by the treatment ime and my family has recived from your company. i purchased a living room set from your company. At the time i was convinced by the sales person to purchase insurance. As luck would have it i was severly burned in my home,at the same time the sofa also got burned. When i came out of the hospital we remembered the police we purchased from your store . We contacted the store after they made us pual phone tag for 4 months they then made us wait another three months saying they cant find the paper work. anothe 6 or7 weeks .When we finally were able to speak to some one they said that we had to purchase another couch set , and we would be reinbursed that money.Well come on if thats not the old bait and switch then what is. I spent close to $1700. plus your insurance..And i am susposed to buy it again to get reinbursed . awahat kind of company does that to people.I think thats aphauling and you guys should be asahamed of your self. And i plan to pen a letter to the bepartment of consumer affairs. All these years i thought JCP was a stand up compay. But i was proved wrong. You should be ashamed of your companys policys .

October 28 2012 at 3:41 PM Report abuse rate up rate down Reply
llindalefran

If you want to attract new or old customers, you have to make your pricing and quality plan attractive. No one sees a real sale in JCP anymore. It's all a secret game plan by directors. We shoppers have to feel that we are in the drivers seat when it comes to spending our money. I didn't see slashed prices on items that had been higher. That was part of what drew us to Filenes. This stratergy is a loser and was from the very start. Someone needs to wake up upstairs and make it a real store again with respect for the customer.

August 10 2012 at 1:48 PM Report abuse rate up rate down Reply
Hi Cristian!!

Ha ha ha this guy is in big trouble!!! JcPenneys will be extinted and she will have his golden parachute!! so who cares??? right???

June 19 2012 at 12:18 PM Report abuse rate up rate down Reply
amy2dee

UNDERSTAND THIS IS NOT A TARGET OR APPLE STORE !!

June 13 2012 at 5:17 AM Report abuse rate up rate down Reply
amy2dee

Dear Mr.Ron Johnson

As JCPenney CEO you would think you would know what your doing but you don't. People LOVE COUPONS and like knowing that they have gotten a bargain its just satisfying. I'm sure some people understand the pricing strategy but don't like or care for it. JCP use to be a place to look forward to go on weekends to do shopping the DOOR BUSTERS, JCP CASH$10 OF 25, BILLION DOLLAR DAYS, JCP SURVEYS 15% OFF!!! EXCITING!! YOU would get 15% of things that were on sale. You are okay with loosing loyal customers who have been shopping at jcpenney for years. You have to understand that aiming for every customer does not work out.
You want to be FAIR AND SQUARE but there is nothing fare about waiting for an associate to be done with a customer or the line or not getting any help from because they are running around looking stressed out because they are being rushed to do things. Associates use to have smiles and were extra helpful before and would assist you on the sales floor. The store looks empty their aren't enough registers open you have to walk from one side of the store to the other side. JC Penney was a place to look forward to going a place where everyone managers respected associates and helped them out now its a place were associates use to get along associates are being mistreated, losing hours and backstabbing each other just to get hours. Associates who actually do their jobs are getting fired and the lazy one are still there getting there hours. Hours are becoming based on favoritism instead of who is actually working.
I use to work for Penney's it was an awesome place to work at every was so friendly look forward to going to everyday . Now its just a place not to look forward to because everyone is just stressed out like i said before people are stabbing each other and certain mangers are being very disrespectful. Yet the supervisors and mangers that respected and cared for the associates and customers are getting layed off. you are loosing good employes.
Maybe its time to go back to the old strategy with coupons and sales and try to get your customers back. Here these people out who are telling you they loved shopping at Penney's and loved sales and coupons. Maybe your earnings for next time will be more.Maybe try going to the stored and see how your stores are doing check it out that is empty now. Maybe rethink your strategy because its not working and until you come up with something better JC Penney will keep going down the drain.


P.s Without Customers You Have No Business!
If you don't have enough customers, you are always trying to find ways to attract more.

June 13 2012 at 5:15 AM Report abuse rate up rate down Reply
Linda Martinez Bell

Wow, a little condescending don't you think.
We get it. We just didn't like it.

June 06 2012 at 2:53 PM Report abuse rate up rate down Reply
vinmanla

Ron, the customers do not have to GET your pricing strategy. YOU have to attract customers into your stores and then treat them professionally. My wife canceled her 35 year old account with JCP because of a rude employee. She discussed her experience with the store manager who politely agreed with her but said "We can't do anything about it. She might quite and we are short handed now" Instead of changing your customers, try changing your employes' culture. If not possible, then replace them.

June 05 2012 at 10:25 AM Report abuse +1 rate up rate down Reply
Rebecca

I say the woman's fashion industry needs affordable, good quality, conservative clothing. That would stimulate the economy in my opinion. Every time I look on the internet or at a store it is the same ole junk. Ron Johnson, hear me out. I've talk to Four Seasons which sells a lovely Jara pant but the inseam is only 30 inches for tall misses sized women. It is to die for! The material is so lovely. Jara needs more retailers to go to custom inseams and then the color line could be expanded. No offense Ellen, but we need Kate Middleton as our spokesperson! I dream of the day when she mass produces clothes for us not as skinny and tall women. I know I'm dreaming but something has to change with the fashion industry and it already has a one year jump start with Kate's global appeal and style.

May 29 2012 at 9:16 AM Report abuse rate up rate down Reply
Lisa Davis

I still like to shop there. My biggest problems is not with the coupons or who does the commercials but with the cost of gas and the cost of running my car. I have a 2 hour commute now due to a change in school locations and spend at least $200 a month on gas. And the price of food has gone up. So I can not afford to shop for clothes, shoes, and other items like I used to. My mom liked the coupons and could take her time to wait for those super low cost items but I do not have the time to shop like that and I found it frustrating to find most of the stuff gone when I had a chance to go there. I have done more online shopping when I need something because when I go to the store, there are few petites and much less to look at. I do not get why the store looks so empty now. Putting in a Sephora is a joke because I can not afford their stuff. I know you can not please everyone but I guess people like coupons and the store should cater to them as well. And while I am at it, how about less trendy clothes and more classic styles that flatter a woman's body? I am not a teenager and I long to see pretty clothes come back in style like Grace Kelly and Chanel wore. Not hippie style clothes and big baggy clothes or clothes that are way too small and short so you can not sit down comfortably. I want to see fittted jackets, skirts that flatter, and well made fabrics. Why is rayon being used again? It is a nightmare of a fabric that never looks like it does not need a pressing. If the buyers keep going for trends that do not flatter the customer, I will start looking online for out of the way places to find clothes that will last. It makes me feel a little less glum that my budget is so tight when I see unflattering clothes for sale.

May 25 2012 at 12:32 AM Report abuse rate up rate down Reply
brandma6585

Yea, John Q. Public just doesn't get change very well. I really like the new JCP, the prices are good, no pieces of paper to keep up with and the quality is still there. People will complain about anything.

May 23 2012 at 3:56 PM Report abuse rate up rate down Reply