JC Penney’s has a new CEO – Ron Johnson. Johnson comes to JC Penney from Apple and has been tasked with pulling the mega-retailer out of its slump. Johnson’s most notable effort to date has been the implementation of a new pricing strategy for JC Penney called Fair and Square Every Day. This strategy sought to cut out most of the time and energy invested in sales promotions by the company and to simplify shopping for consumers. There are still some reductions in prices, but the non-stop sale mania and money-off coupons that has become the norm in such stores is over – at least at JC Penney. What JC Penney decided to do instead was to drop their prices to what they call their Fair and Square price. My initial response to this news (as a fairly loyal JC Penney customer) was positive – less fuss and consistently lower prices – it struck me as a smart strategy.
My first visit to JC Penney after Fair and Square was rolled out was online. It was then then I fully appreciated the brilliance in Johnson’s strategy. I had already thought it clever eliminating all the sale baloney and all the employee effort and marketing that went into it, but when I saw the effect on the every day pricing I went from appreciating Johnson’s strategy to worshipping him as a retail reform guru.
JC Penney’s pricing with the new Fair and Square approach has dropped dramatically. Not that I couldn’t have gotten the new prices on JC Penney items before, but I had to wait for a sale and then use a percentage off coupon. It was a lot of work to save money (although, in the saving process I did believe I was maximizing my spending power – which is what the whole psychological manuevering behind sales is all about). But now, I can shop with much less effort and get the same, and in some cases better, deals at JC Penney. Now the JC Penney clothing prices have dropped into the range of stores like Walmart, Kmart, Target, Old Navy and Sears. I dare say that JC Penney is now hitting in many instances below Kohls and will force a new price point on items.
I think Johnson has hit upon a pricing strategy that will reap sales success for JC Penney. I like the Fair and Square pricing strategy and I think that savvy consumers will soon come to realize that there is quite a bit of comfort and ease being able to get in and out of a retailer knowing that you received the best price with no additional effort. I do believe we are witnessing the evolution of retail…I think the days of scrapping for sales will soon be a thing of the past.
Well-played CEO Johnson, well-played. 😉
Day one thousand and twelve of the new forty – obla di obla da