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JCPenney ditches “fair and square” pricing for old sales tactics

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After a year of trying simplified sales, JCPenney is nixing the “fair and square” model and going back to convoluted sale tactics their demographic wants, as proven by slumping sales.

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JCPenney’s fair and square model still around

JCPenney has been experimenting with and tweaking their business model under new CEO, Ron Johnson, as they respond and adapt to a changing economic climate. Johnson has been seeking ways to not only expand the company’s market share but to modernize and streamline the shopping experience.

These experiments have come with mixed results, as seen in a 10 percent drop in store traffic, which most believe is due to the company’s removal of coupons in favor of a “fair and square” pricing model where they simply keep prices low, with rounded numbers, offering a full month of the lowest sales price. Simple but different, and while risky, some believe it could have paid off in the long run.

According to USA Today, nearly a year after sales and coupons were ditched by the company, JCPenney will be bringing back sales.

“Our sales have gone backward a little more than we expected, but that doesn’t change the vision or the strategy,” Johnson told USA Today. “We made changes and we learned an incredible amount. That is what’s informing our tactics as we go forward.”

Going back to the traditional sale model

For decades, the legacy brand had been offering weekly sales, weekend sales, white sales, and while simply offering the best price possible makes sense, customers didn’t catch on, as reflected in sales numbers, which ultimately led to the company’s Marketing Chief who was let go with no public explanation.

“We’re moving away from the word ‘month-long value’ because no one really understood that, to calling it what we intended to do, a sale,” Johnson said. Prior to his reign, the company offered nearly 600 sales per year across their departments, which customers apparently understood better than “fair and square” which may say more about the company’s demographic than the intelligence of an experimental CEO.

One of the first sales offered will be a pre-Valentine’s Day sale, 20 percent off on all fine jewelry from February 1st through February 14th.

jcpenney sale

The experiments aren’t over yet

While business must be tended, it is disappointing the criticism the company is receiving for experimenting and trying to simplify shopping rather than offer hundreds of confusing, randomly timed sales. Johnson’s willingness to try new things, pivot, and go back when necessary is admirable, and fortunately, he hasn’t let this experiment hold him back from trying more innovation in retail.

Various reports indicate that the company will be adding manufacturers’ and competitors’ prices to all price tags in the store, which naturally has already drawn criticism as The New York Post claims employees were being told to arbitrarily fabricate these higher prices, which the company has vehemently denied, stating that all prices posted are approved by JCPenney’s legal team.

What is most fascinating is not only the level of criticism the company has received, but how it must feel for Johnson personally – imagine a shoe repair shop employing three people including the founder being called to task for trying a sale, quitting the sale after it didn’t work, then trying new marketing tactics. At least in this scenario, the repair shop and JCPenney are trying new things rather than failing and blaming the economy or consumers.

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