As Lisa mentioned last week, many of the financial and business pundits are calling JC Penney’s recent rebranding and “Fair and Square” pricing strategy an epic failure.
The idea behind “Fair and Square” pricing was that consumers were tired of sales, gimmicks, and the associated drama and uncertainty, so from now on, pricing would remain pretty much steady — you could drop in any time to buy socks and shirts without wondering if your goodies would go on sale next week. Now, of course, with the benefit of 20/20 hindsight, everyone is calling this an obviously stupid move, the CEO has stepped down, and the sales, coupons, and gimmicks are back.
But wait a minute… I think they were actually on to something here.
I absolutely loved JCP’s Fair and Square pricing. There’s a store about a mile from my house, and in 2011, I spent exactly $0.00 there. So far in 2012, I’ve spent at least $300. And I’m a guy who absolutely hates to shop for or even think about clothing — $300 is more than I would voluntarily spend on clothing in two or three years. There were two factors that attracted me:
- An excellent men’s big-and-tall department — I know I’ll find nice clothing that fits.
- To get decent prices, I didn’t have to mess with sales, coupons, special events, or clearance racks. I get in, get what I need, I get out, and I’m back to real life.
The trouble should be obvious, of course — JC Penney changed everything without changing their core audience. Turns out that people who buy a lot of clothes love sales, midnight madness, clearance racks, and all the other noise and fuss. They’re after that powerful feeling of triumph, not just covering their nakedness. “Fair and square” attracted a small new audience, but alienated their far more important and lucrative core audience.
I think the lesson here is that marketers and leaders must understand exactly what emotional experiences they’re selling, and to whom. People like me (nonstandard humanoids who hate to buy clothes) could actually become a very important niche market, but changing your entire core strategy to pursue a small new niche is never very smart.
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As a customer of jcpenney for the last two years, I have been impressed by their visually bright circulars that are significantly better than the ads they were pumping out prior to their new campaign. While I admit that I still thirst after coupons to give me the thrill of buying on the cheap, I still bought with jcpenneys, because my perception started to change that I was no longer buying from a bargain shop, but a retailer with a nice image. Maybe you keep the coupons, but for jcpenneys to abandon their new look is foolish. In my estimation, jcpenneys is a dying franchise, mostly because kids today don’t seem to want to shop at a store that is not cool. Look at K-Mart. They did not change with the crowd and now, they are nearly irrelevant. My hats off to jcpenneys for trying to change their image after a hundred or so years of retailing. I will continue to shop there, because they offer me a good selection, good pricing, and now, a little better image.