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

Ron Johnson JCPenney
Ron Johnson JCPenney

By 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.


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"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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