J.C. Penney’s apology commercial “It’s No Secret” is probably a work of genius. It has the look and feel of frankness and honesty, acknowledging that customers didn’t like the recent changes in the company and telling us that the company has heard us — and that now they want to see us back.
But the apology can’t really come right out and say what customers hated so much about the changes under CEO Ron Johnson, who has recently been axed for his shipwreck of a performance.
As Johnson famously acknowledged, the entire department store model is based on fake prices. Stores put wildly inflated prices on their merchandise that nobody ever pays. The stores then create a false sense of urgency by running sales.
And, yes, the discounts are bogus. According to Time, before the Johnson innovation, less than one percent of J.C. Penney’s sales came from paying the full sticker price — and almost 75 percent of sales came from items discounted more than 50 percent off.
Most shoppers caught onto the game years ago. Only a sucker or an idiot pays full price because there’s always a coupon and there’s always another sale.
Johnson thought consumers would appreciate honesty. Instead of slapping a fake price on an item and then crossing out the fake price to put the real “discounted” price, he decided to introduce something called “fair and square” pricing.
J.C. Penney changed — as the apology video acknowledged — by simply putting the real price on the item in the first place.
And everybody hated it. Shoppers simply couldn’t go against years of conditioning and pay full price for a department store item. They just couldn’t. I couldn’t. Could you?
J.C. Penney’s revenues have been in freefall, collapsing by as much as 30 percent during an absolutely disastrous Christmas 2012 fourth quarter.
Consumers don’t like honesty. They want to be humored along with fake prices so that they can feel like they got a real steal. Nobody wants Johnson’s honesty. We’re looking for fantasy when we shop, and “fair and square” doesn’t appeal to the urban hunter-gatherer psychology. Give us our sales!
So J.C. Penney’s apology commercial — very slick with a lot of words that don’t really drill down and say anything real — may be exactly what the situation demands.
In case you haven’t seen it yet, here’s the video of the apology from J.C. Penney’s official You Tube channel:
[J.C. Penney photo courtesy Sam Howzit via Flickr and Creative Commons]