Photo: Screengrab from CNBC
It has been more than a year since JCPenney CEO Ron Johnson unveiled his plan to turn around the struggling department store.Johnson sat down with CNBC to talk about his first year at the retailer and he was immediately put on the spot: what’s the deal with sales at JCPenney?
After all, he had originally tried to kill traditional event-driven sales at JCPenney and wean people off of coupons.
Now, JCPenney is getting back into the sales game. Exactly one year after switching over to Johnson’s new pricing model, JCPenney held a sales event for fine jewelry.
So, what exactly is going on?
Here’s what Johnson had to say:
“A year ago we were going to run sales but they’d last a month and we called them a ‘month-long value.’ And customers didn’t understand the new term. And we just said lets go to language they understand and rather than having sales that last a month, target them to when they’re needed most. So we’re going to reintroduce sales at times like Valentine’s Day or Easter, just to make sure we deliver the best value we can.”
And what about coupons? After all, JCPenney is offering a $10 “gift” if a customer spends $10. That’s pretty much just a coupon with a different name.
“It’s similar, it’s very… it performs just like a coupon. And we are doing that. Because our customer has told us at times they like to have additional value. As we approach this year, our number one priority is return to growth. It’s also the number two priority. It’s the number three priority. We want to return to growth. We think we key to that is communicating value and we’ll do that in whatever way it takes to return to growth. But it all is rooted in the first price being the right price.”
He doesn’t regret taking such a hard line on the word “sale” either.
“I really don’t. If anything I’m sorry we didn’t start with it. Because we always want to deliver value, but we thought we could articulate value in a different way. Customers didn’t hear that as much as investors. What customers care about is the value delivered every day.”
Watch the full interview below:
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