The Trials & Tribulations of J.C. Penney's 'Fair and Square' Strategy

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When the country and, really, the world is descending into an economic sinkhole, you have to play your hand carefully when it comes to how you try to gin up some business and stay afloat. Typically, you'll see companies shake things up by trying some novel approaches of commerce like revamping the brand's logo or changing up the company's promotional plans.

J.C. Penney took a stab at this approach earlier this year under the leadership of new CEO Ron Johnson, who had formerly been Apple's head of retail. If anybody knows about minting a brand and successfully promoting it to ridiculous levels of popularity, it's Apple. On the surface, you'd expect that J.C. Penney would be headed to the promised land of retail. Until it didn't.

The retail chain actually began to tank, prompting market analysts to start brushing up a rough draft for J.C. Penney's obituary.

With everything looking like J.C. Penney was on the verge of imploding, how did it all go so wrong? Martha Guidry, the principal at The Rite Concept, said she doesn't blame the retailer for trying to implement bad ideas, but rather for implementing ideas badly.

"I don't think the strategy was bad," Guidry said, "It's been the execution of that strategy that has really gone afoul for them." She goes on to absolve Johnson of any blame, as well, saying that the marketing ideas that J.C. Penney had tried to enact were actually great ideas but the company didn't successfully communicate its new pricing strategy to customers.

Guidry said that J.C. Penney's attempt to get rid of coupons and sales was a savvy idea but that they failed to make it relevant to the consumer. Citing the company's "Fair and Square" approach that aimed to offer a sales price everyday, J.C. Penney failed to make the concept relevant to shoppers. "If would have been really easy for them to have said, 'Fair and Square pricing is a sale price everyday,' and I think people would've gotten it but they didn't communicate it that way," she said.

That seems like an amateur mistake on the company's behalf because you'd have to make a pretty horrible fumble if you fail to make customers understand that you're giving them stuff for cheaper prices. That should be like shooting fish in a barrel, really. Guidry said that J.C. Penney should have spent more time testing this idea with consumers and that the company should have spent more time testing out the strategy. "A test market with 100 stores would have allowed them to fine-tune the language and get it right before they launched it for the full chain."

Although the retailer was attempting to trek off the well-worn path of its traditional marketing strategy, the plan wasn't inherently doomed. J.C. Penney just didn't spend enough time developing any actual language that would normal people would understand. "J.C. Penney probably a leap of faith or maybe a leap-frog step," Guidry opined. "They went from having this idea to jumping into this advertising language that really didn't resonate, so I think they skipped a step and it's done them a huge disservice."

In light of the advertising backfire, though, J.C. Penney plans to adjust its marketing message but will keep with the current strategy for now. Guidry thinks that's a step in the right direction. "Their fundamental idea of 'Fair and Square' pricing is a great idea, but I don't think it makes sense to the average American consumer." Guidry concluded, "If they can find language that is more meaningful to the consumer, it'll help a lot."

J.C. Penney has one more quarter of the 2012 fiscal year to work out the kinks of its 'Fair and Square' promotion and try to turn things around before the retailer, like the rest of the commerce world, barrels into the holiday shopping season at the end of the year.

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