The troubles at JC Penney that started with stopping coupons in February sort of reminds one of the New Coke fiasco. In both cases company leaders misjudged what their brand really means to their customer. Here is what happened:
JCPenney marketing folks figured that their customers hated all those coupons and keeping track of the coupons. Counter folks at JCPenney also reported that there were always some customers who missed the date and wanted the discount and appeared displeased if they could not get the discount.
So in February J.C. Penney(JCP) rolled out the program of no coupons and discounts and an "everyday low price." In the Ad alongside the problem is framed as the J.C. Penney marketers saw it. Yes the ladies were annoyed at times with the coupons and missing coupon dates but they loved the process of tracking coupons and grabbing that great deal and actually making a trip to the mall just to use the JCP coupon. If you have observed JCPenney customers before February you would have seen customers that were totally passionate about not missing a coupon deal! The JCP counter staff also had developed their routines of how to deal with customers who had missed coupon dates and also inadertently alarming customers by asking " Do you have a$10 off coupon or a $20 off coupon" which would immediately start a discussion between the shopper and the counter person as to who gets the better coupon with a lot of speculation thrown in. The JCPenney coupons were a real social event much more powerful,engaging and at times frustrating to the customer and retail staff. But all this was the joy of shopping at J.C. Penney..So how did otherwise great marketers make such a huge mistake?
One possibility is that managing the coupons and their redemption was a problem and proving costly. So the marketing camp that misjudged customer and store staff complaints about coupons got some support from the finance folks.
What is perplexing is that consumers who saw the above ad actually have written numerous comments on the YouTube ads clearly stating that they don't like the idea of JCPenney getting rid of coupons. So why did no one in marketing reverse the decision? It's not clear yet. While the President Michael Francis who was the CMO and Merchandising head has resigned,CEO Ron Johnson of Apple store fame, will probably have to make some quick decisions. JCPenney might want to do what New Coke did….. it went back to classic coke. JCPenney customers complain about coupons they miss, but complaining is also a great form of customer engagement…. or so it seems for JCPenney.Contact StratoServe.