Our coupon culture: JCPenney suffers as ‘Fair and Square’ flops

It’s been a mere four months since retailer JCPenney launched its “Fair and Square” pricing and discount initiative under the leadership of then-president Michael Francis. Following a dismal first-quarter 2012 with shares down 8.5 percent, Francis resigned after just eight months at the helm, with the company citing no reason for his departure, according to a June 19 article from Bloomberg.

Fair and Square aims to provide relief from overwhelming coupons and promotions, instead offering consumers a three-tier pricing scheme: 1) Every Day; 2) Month Long Value (including theme sales, such as holiday or back-to-school); and 3) Best Prices (clearance).

JCPenney dared to challenge the status quo: Can a major retailer essentially do away with coupons and live to tell about it? The answer here, it seems, is no. BIGinsight, a Worthington, Ohio, research company, surveyed consumers back in March using its monthly “Hot or Not” feature, finding that more deemed Penney’s approach “not” (58.3 percent) than “hot” (41.7 percent). BIGinsight polled nearly 9,000 consumers for an update this month and over the past three months, those who think JCPenney’s new direction is hot dropped nearly 14 percent. What’s worse, it seems this flop has pushed JCPenney’s customers right into the arms of competitors such as Macy’s.

The problem, of course, is that JCPenney vastly underestimated consumers’ love for bargain-hunting. According to a June 18 article from Forbes, JCPenney CEO Ron Johnson admits that he may have misunderstood how deeply ingrained discounts were to the shopping culture. For better or worse, we are a coupon-hungry lot.

Blame it on being too progressive or being just plain out of touch, Fair and Square missed its mark. (I doubt the Ellen Degeneres debacle helped much either, but I suppose that’s another blog for another day.) What’s your take on JCPenney’s approach? Love it? Hate it? Can JCPenney bounce back without abandoning the program? Will consumers ever be ready to part with their stacks of coupons?

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3 Responses to Our coupon culture: JCPenney suffers as ‘Fair and Square’ flops

  1. Betsy Reichert says:

    JC Penney is somewhat like Sears, in that they are both reporting losses in their clothing departments. There is, however, a difference. Sears has automotive repair, appliances, exercise equipment, tools and a number of categories and brands that keep you going there for those reasons. JC Penney has none of that. It’s going to be hard to pull Penneys out of this dive.

  2. Celeste says:

    I have to say that I actually dislike the fair and square approach that JcPenney took. At first, I thought WOW that will be awesome to always get reasonable prices for clothes that I want to buy. After not being able to use the $10 off $30 I quickly started to change my mind. I think at least once a month they should still offer some type of coupon. It feels great to receive a great buy on clothes! I wonder if they will change their strategy? I know a couple of my family and friends feel the same way as I do!

  3. michele says:

    I contrast JCP’s approach with Kohl’s, where it’s nearly unthinkable to shop without a coupon. I like to feel like I’m shopping at the “right” time and doing so “in the know”. JCP’s 3-tier structure was completely lost on me, even though I read up on it during the launch. I don’t always need the best price – sometimes waiting means you miss the boat. But I at least need to understand the value, and this just confuses me.