A few months ago I wrote about JC Penney’s new marketing strategy that eliminated coupons.
What a bad, bad idea that turned out to be. The company lost $55 million during its first quarter this year under the new strategy. The idea came from JCP’s new CEO, Ron Johnson — the guy who went from Target to the Apple Store before being scooped up by JCP. He thought he could lower prices on all merchandise by 40 percent, “simplify” them by taking away the .88 or .99 at the end and just having flat dollar prices, and advertising sales once a month through eye-catching circulars instead of mailing out coupons to draw people into the stores.
“Coupons were a drug,” Johnson said at a conference last week with analysts.
Well, people don’t like it when you take away their drugs, Mr. Johnson...