JCPenney CEO and former Apple retail chief Ron Johnson has a mighty task on his hands as he tries to transform JCPenney from an old, boring department store to a trendy brand.There’s one important thing Johnson has tried to do, but failed spectacularly in his first attempt when he eliminated coupons.
He’s trying to rebuild trust.
From an interview with Diane Brady at Bloomberg Businessweek (emphasis ours):
“I think there is a fundamental issue in our country with trust. It’s trust with government, trust with big business, and I think the department store is part of that. I would like to build trust, and it starts with the price tag. I want truth in the price tag. 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.”
Interestingly, in Johnson’s attempt to build trust with his pricing, it seems like the opposite effect happened, at least among one group of JCPenney customers.
There’s a group that absolutely loves coupons, and when he got rid of them, they felt betrayed. From a letter one customer addressed to Johnson:
“When I heard of the news of your price changes I could feel a big “OH NO” that this is going to be a situation. I wanted to write you then and I am sorry I didn’t, but maybe this way you might get my letter.
You mentioned that coupons were like a drug and you are so correct, but the problem is we consumers still need the HIGH.”
NOW WATCH: Ideas videos
Business Insider Emails & Alerts
Site highlights each day to your inbox.