February 1st 2012 JCPenney began a huge advertising campaign featuring Ellen DeGeneres. The whole crux of the campaign was that they would no longer be issuing coupons for their products. Their low prices would be enough to get people in the door.
I remember this thought going through my mind “That’s never going to work but I am REALLY biased in the world of coupons. Surely the JCPenney marketing people have done the research.” I just know the psychology of the coupon and it’s powerful.
This past Tuesday the public finally got to see the results of this new campaign. For the first three months of this year sales plummeted 18.9 percent at stores open at least one year. Net losses for the period were $55 million. Executives blamed the results on the departure of deal-hunting shoppers after the company changed its pricing strategy in early February to abandon coupons.
In the last three months, foot traffic at stores dropped 6 percent on weekdays and 12 percent on weekends.
The response Tuesday was their stock also plummeting.
JCPenney says they are going to fix it by educating their consumers. They think educating us will override the practice of coupons.
Others don’t agree. At an investors’ conference in April, Karen Hoguet, Macy’s chief financial officer, reminded attendees of the lesson. “People love these coupons. They love thinking they got us,” she said. “From the customer perspective, it’s been very important.”
In my opinion I think JCPenney may have forgotten that coupons ARE marketing material. By seeing a coupon for a store I am more likely to walk through the door. I have to be honest- seeing the commercials mocking those who use coupons didn’t really inspire me to purchase anything. They didn’t make me angry but they didn’t make me think I would get a great deal either.
Did you quit shopping at JCPenney because of the commercials? Did you even notice the commercials?