Is Hobby Lobby making a mistake (a big one) ending 40 percent off coupons? – RetailWire - RetailWire

Jan 29, 2021

by George Anderson

Holy shades of Ron Johnson at J.C. Penney, Batman! Hobby Lobby has decided to end its use of 40 percent off coupons in its stores and its customers do not appear amused.

In a post on Facebook, according to reports, the arts and crafts retailer said that, with its decision to end the coupon promotion, it was stepping up "efforts to discount thousands of items every day. This will offer a better value instead of providing a discount on only one item with the coupon."

The Hobby Lobby news may sound like history being repeated to those who remember when J.C. Penney tried to do the same thing early in 2012 under the leadership of Mr. Johnson, the chain's CEO. The chain rolled out fair and square pricing, as it was being marketed, nationwide before testing it was tested and the response from Penney's core customers was, to put it mildly, negative. In addition to turning off Penney's established base, it also failed to attract new younger consumers, as was the aim behind Mr. Johnson's failed attempt to reinvent the retailer's business.

[A RetailWire query to Hobby Lobby to determine if the retailer test marketed its new pricing approach before deciding to roll it out chainwide on Feb. 28 was not answered at the time of publication. This article will be updated if Hobby Lobby provides a response.]

The arts and crafts retailer's new strategy does not initially appear to be well received based on social media responses. Here are some of the comments found on Hobby Lobby's Facebook page:

"Hello Amazon"

"You just keep shooting yourself in the same foot, don't you? I always used a coupon if and when I shopped at your store. Now there's just another reason to go somewhere else."

"Just about everything in your store is way overpriced. The only time I buy something there is with a 40 percent off because then I can get it for marginally less than what I get it for elsewhere."

DISCUSSION QUESTIONS: Is there a good way for a retailer to go from being promotion-dependent to emphasizing low everyday prices? What would you recommend Hobby Lobby do to address the fears of shoppers who believe the chain is taking something positive away?

Braintrust

"The best approach is to start by removing those promotions that just don't work against their objective (whether it be traffic, basket or something else)."

"This is a big mistake. When I read this two examples came to mind quickly. Penney's and Mens Wearhouse."

"So the good way to make this kind of conversion? Slowly. Evolutionary, not revolutionary."