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The death of 'fair and square' retail pricing...
Old 05-25-2012, 04:46 PM   #1
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The death of 'fair and square' retail pricing...

Seems nuts to me but consumers apparently like playing price games...

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You might have seen recently that iconic retailer JC Penney is slumping badly. You almost certainly have seen the reason why: A massive, creative and aggressive new advertising and pricing campaign that promises simplified prices.

No more coupons or confusing multiple markdowns. No more 600 sales a year. No more deceptive circulars full of sneaky fine print. Heck, the store even did away with the 99 cents on the end of most price tags. Just honest, clear prices.

Sounds like a sales pitch aimed at consumer advocates and collectors of fine print frustration, like me. As it turned out, it was a sales pitch that only a consumer advocate could love.

Shoppers hated it.

The campaign, which launched on Feb. 1, appears to be a disaster. Revenue dropped 20 percent for the first quarter compared to last year. Customer traffic fell 10 percent. Last year, the company made $64 million in the first quarter; this year, it lost $163 million. Could we have a moment of silence please for what might be the last heartbeat of honest price tags?

Not only did Penney’s plain pricing structure fail to attract fair-minded shoppers – business reporters wrote with seeming glee during the past few days that it “repelled” them.
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To oversimplify for a moment, here's Penney's problem. They told the world that retailers only offer their best prices during crazy sales, and Penney stores would no longer host them. Sensible consumers apparently took that information to heart and decided to simply wait for such sales at other stores. As an added benefit, Penney lowered consumers' search costs, because they now knew they didn't need to bother driving to a Penney’s store anymore.
Red Tape - 'Fair and square' pricing? That'll never work, JC Penney. We like being shafted
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Old 05-25-2012, 04:53 PM   #2
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Not sure I buy the authors conclusions. I never shopped JCP, mediocre merchandise at near full retail was our perception. Still don't shop there.

I wondered if shoppers interpreted their ads to say 'we've mostly ripped you off for decades, and we wanted you to know we're going to stop ripping you off - yeah us!'

No thanks, we'll just keep shopping where they stopping gouging us years ago. But who knows...

We haven't been curious enough to bother to wander through our local JCP since the new ads started.
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Old 05-25-2012, 05:18 PM   #3
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Failure of the price simplification campaign is a great excuse, and all, and maybe it even has some validity.

But personally, I don't shop at JC Penney any more for a variety of reasons. They are always located at huge shopping malls. I have to fight traffic to get to the mall, and then circle around for a half hour to find a parking place a bazillion miles from JCP. Then, I walk there and worm my way through other shoppers similar to Walmart shoppers, only to find out that whatever I want, they don't have, and if they do then I have to pay 9.75% sales tax on it and lug it back to my car.

I really used to like JCP, but items I used to buy there are easily available on Amazon. I didn't even notice JCP's price simplification campaign.
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Old 05-25-2012, 05:24 PM   #4
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Originally Posted by W2R View Post

But personally, I don't shop at JC Penney any more for a variety of reasons. They are always located at huge shopping malls. I have to fight traffic to get to the mall, and then circle around for a half hour to find a parking place a bazillion miles from JCP. Then, I walk there and worm my way through other shoppers similar to Walmart shoppers, only to find out that whatever I want, they don't have..
Are you still shopping on weekends?
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Old 05-25-2012, 05:43 PM   #5
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Are you still shopping on weekends?
Ohhhhhhh..... errrrrr.......



To tell the truth, I haven't been to a big mall like that since I retired.
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Old 05-25-2012, 05:50 PM   #6
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To tell the truth, I haven't been to a big mall like that since I retired.
No wonder JC Penney is in big trouble...
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Old 05-25-2012, 05:55 PM   #7
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No wonder JC Penney is in big trouble...
I know, and here I was singlehandedly propping up our local economy, but forgot to include those national chain stores. When will I ever learn?

Oh, wait. I'm wrong. A while back I did go to Macys to look at a purse I had been reading about on another forum. Didn't like it, and left directly. But that means I have been to a mall since ER.
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Old 05-25-2012, 08:15 PM   #8
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I'm used to shopping the sales at the grocery store. When they shifted to "everyday low prices" it cost me more because although the prices were better they were not as low as the regular sales prices. They went back to regular sales after about a half a year to a year of "low prices", but another year or so and they're back to "everyday low prices". Way to make a decision there! We hardly shop anywhere unless there's something we want on sale. Costco and Home Depot are exceptions since they trained us differently. Tough to compete if your competitors offer frequent sales.
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Old 05-25-2012, 09:05 PM   #9
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Seems to me that JCP is failing because they sell crappy merchandise. Price means nothing if you have nothing I want.
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Old 05-25-2012, 09:14 PM   #10
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Apparently I'm one of those mutants who hates haggling over price and going shopping at seven different places to pick out all the sales.
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Old 05-25-2012, 09:29 PM   #11
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Apparently I'm one of those mutants who hates haggling over price and going shopping at seven different places to pick out all the sales.
I'm that way too. Instead of doing those things, I'd rather just shop less often and buy less to save money. But some people love hitting all the sales; nothing wrong with that, but it's not for me.
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Old 05-25-2012, 09:35 PM   #12
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It has to be the crappy pricing strategy (and inadequate marketing campaign--I can remember the single ad that ran, over and over and over, of people shrieking "no" at sales literature and coupons and signs, but that was it), as per the OP link:

Quote:
The campaign, which launched on Feb. 1, appears to be a disaster. Revenue dropped 20 percent for the first quarter compared to last year. Customer traffic fell 10 percent. Last year, the company made $64 million in the first quarter; this year, it lost $163 million.
Presumably the merchandise is not better nor worse than before the campaign (if it changed, the company fell flat on its face by not publicizing that!), so that can't be why sales fell so much.

I see the JCP ad flyers and their "no sale" prices aren't any better than the other stores' advertised prices, and the selection isn't better. I think they shot themselves in the foot.
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Old 05-26-2012, 08:25 AM   #13
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Quote:
Originally Posted by W2R View Post
I know, and here I was singlehandedly propping up our local economy, but forgot to include those national chain stores. When will I ever learn?

Oh, wait. I'm wrong. A while back I did go to Macys to look at a purse I had been reading about on another forum. Didn't like it, and left directly. But that means I have been to a mall since ER.
True, but since you didn't buy anything that visit to the mall didn't really count.
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Old 05-26-2012, 08:49 AM   #14
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I'm disappointed. I buy jeans and tee shirts at JCP. I thought the new pricing was an improvement because it meant I could go in anytime (on the rare occasions when we're at the mall) and get a "decent" price without wondering if the item would be on "sale" the next week.
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Old 05-26-2012, 08:49 AM   #15
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J C Penny made two mistakes. First, they hired a guy from Apple. Then they listened to him. Apple has to be the only store in the US where people queue to get in and spend money and no advertising is needed. When JP Penny starts selling the same stuff that is sold in Apple stores, they can then use the same strategy.

J C Penny needs someone who worked as a barker in a county fair or circus. They need to pull those people in and give them a compelling reason to buy stuff they don't need. Such as, it's really saving.
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Old 05-26-2012, 08:53 AM   #16
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I really used to like JCP, but items I used to buy there are easily available on Amazon. I didn't even notice JCP's price simplification campaign.
Best Buy has the same problem. Amazon is having an impact on retail selling in the US far beyond the level of sales it has. I wonder how far this will go?
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Old 05-26-2012, 08:56 AM   #17
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Best Buy has the same problem. Amazon is having an impact on retail selling in the US far beyond the level of sales it has. I wonder how far this will go?
Amazon's unfair advantage re no tax collection will need to be brought to a screeching halt before that playing ground is leveled.
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Old 05-26-2012, 09:00 AM   #18
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Amazon's unfair advantage re no tax collection will need to be brought to a screeching halt before that playing ground is leveled.
That will happen here in July.

Amazon.com starts collecting Texas sales taxes in July according to agreement with Comptroller Combs | Biz Beat Blog | dallasnews.com
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Old 05-26-2012, 09:08 AM   #19
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Amazon's unfair advantage re no tax collection will need to be brought to a screeching halt before that playing ground is leveled.
+1
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Old 05-26-2012, 10:18 AM   #20
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I am not much of a shopper. DW used to be a frequent shopper at JCP because of its frequent sales. She now shops at Marshall, TJ Maxx and Homegoods.
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