JC Penny's NO Sales Gimmicks NOT WORKING

[heydude]

http://moneyland.time.com/2012/05/17/why-jcpenneys-no-more-coupons-experiment-is-failing/

Jcpenney sure gave it a good try! They eliminated all sales, coupons, gimmicks, etc. and simply changed everything to one every day low price. Instead of marking things up to just put them on sale, they just kept them at a low every day price.

Their TV Commercials are really odd. Instead of "this shirt on sale!" they only show shirts and then say "it is summer at JcPenney!"

hahahahahaha.

Anyways, it was kind of cool to see them get rid of all the clutter of prices and advertising but, perhaps, sadly, it is not working. Their sales are down 20 percent.

I heard the top executes are going to tweak the program and offer some sales but that mostly they are not abandoning their new strategy yet.

It kind of shows that people really do not need the junk if the only reason they are buying it is because it is on sale.

In a world without unemployment, it would be cool for Jcpenney to just cut themselves 20 percent instead of going back to the word "sale" which is only going to cause people to buy junk they don't need.

[rosarugosa]

HeyDude, That's kind of disheartening that a simple and more rational pricing structure wasn't successful. It seems to have worked well for Jordan's Furniture. They might just be regional, but for years they have touted their "underpricing," everyday low prices without sales or gimmicks.

[creaker]

I think JC Penny is going through the same department store fatigue so many other chains (most of which are no longer around) have gone through.

As far as the no sales thing, I expect the problem is most people can't judge what's a good deal on the things they buy, so they need to be told what a good sale they got :-)

[iris lily]

I liked Penney's new strategy as well, I am so sorry it doesn't seem to be working. It's amazing how people, grown adult, seem to believe they got a deal when something is on sale. A freind of mine has an addiction to Groupon and other places like that. The other day he was shoving a coupon for $100 off a case of wine at me. So then the case was $60. Dude, how do you know this is anything other than $5 a bottle wine to begin with? Why would I take a chance on wine I know nothing about?

[Miss Cellane]

When Penny's big change was first announced, I was surprised at the number of people who clearly didn't understand what the change meant. A lot of people simply said, "Well, I'm not shopping there anymore. I used to love their sales. But if they aren't having sales anymore, I'm not shopping there." They got the "no sales" part; but not the "everyday best price" bit.

Frankly, I'd prefer that all stores operated like Penny. One standard price, instead of constant "sales." You can walk in and know that on any given day, you are getting a decent deal on your purchases. Instead of what happens in other stores, where you find something you want to buy, but you know there will be a sale soon, so you should wait to get a better deal, but what if the sale for this item was last week? Should you wait? Should you buy? What if they don't have the size/color/options you need when the sale finally comes around? Do you have time to monitor all the media for the next few weeks to find out when the sale for this particular thing will be? It's a headache.

I've been trying to support the "new" JC Penny, but unfortunately, all I've needed from them has been a few pairs of socks. Not enough to really make a difference to their bottom line, I'm afraid.

Maybe that's part of the problem. The people who appreciate the new price structure are the same people who only go shopping when they need something; not the people who shop constantly and make all sorts of impulse purchases?

[SteveinMN]

One standard price, instead of constant "sales." You can walk in and know that on any given day, you are getting a decent deal on your purchases. Instead of what happens in other stores, where you find something you want to buy, but you know there will be a sale soon, so you should wait to get a better deal, but what if the sale for this item was last week? Should you wait? Should you buy? What if they don't have the size/color/options you need when the sale finally comes around? Do you have time to monitor all the media for the next few weeks to find out when the sale for this particular thing will be? It's a headache.
Then there's Sears' take on this (at least on large-ticket items): two items which are pretty much identical except for one minor feature or spec tweak and their stock numbers. Sears advertises Item A on sale for two weeks only! And then Item A goes back to its "regular" price and Item B goes on sale for two weeks only! Rinse and repeat. The item essentially is on sale all the time. Personally, I wonder about anyone who would end up buying it at the "regular" price.

I also think JCP miscalculated the value to shoppers of "the thrill of the hunt" -- people like to think they got a bargain even if it's only some discount from an illusory "compare at" price. They don't step back far enough to evaluate whether what they're buying is worth what they're paying for it. Ironic, because items don't show up at deep discount in the first place unless they were quite overpriced or are damaged or somewhat obsolete.

[Lainey]

I'll add a corollary to this idea: that brick and mortar dept. stores will always be needed, because people like to browse. Physically see and smell and feel stuff. Walk around and see what's new, stumble across something they hadn't considered before.
As popular as online shopping is, the leisurely browing of stores continues to be a big activity for millions of people.

[Alan]

I'll add a corollary to this idea: that brick and mortar dept. stores will always be needed, because people like to browse. Physically see and smell and feel stuff. Walk around and see what's new, stumble across something they hadn't considered before.
As popular as online shopping is, the leisurely browing of stores continues to be a big activity for millions of people.
The problem is, many folks are using brick and mortar stores as showrooms for whatever consumer item that interests them, but then makes their purchase online. I've heard that Best Buy is considered the best showroom for Amazon.com

While it's great for the consumer, the return on investment for brick and mortar stores is declining.

[creaker]

Maybe that's part of the problem. The people who appreciate the new price structure are the same people who only go shopping when they need something; not the people who shop constantly and make all sorts of impulse purchases?

I have a question - are department store sales like grocery store sales? As in putting a few loss leaders to bring in the customers? I would expect everyday low prices in one store would probably have to be a bit higher than the loss leaders at store that has sales. Which may lose them sales and make them look higher priced, even though overall they are not.

[SteveinMN]

The problem is, many folks are using brick and mortar stores as showrooms for whatever consumer item that interests them, but then makes their purchase online. I've heard that Best Buy is considered the best showroom for Amazon.com
True, though I consider that a problem in ethics rather than in marketing or the b&m paradigm. I like to think that people understand that it costs money to provide display models, inventory for instant gratification, sales staff (however helpful), a heated/cooled building, parking, etc. and that b&m rarely can match the price of a company that provides none of those benefits to its customers. But I just like to think that; the evidence obviously speaks otherwise.

As I live in Best Buy's hometown, there has been lots of discussion on why they're in the pickle they're in. One possible solution that makes sense to me has been to actually become Amazon's showroom. Manufacturers pay for floor space anyway (much as food producers do in grocery stores); why not capitalize on having product people can touch, sales staff that actually knows the products (maybe actual employees of the manufacturer, not BBUY), and kiosks or a service desk where it can be ordered on-line from bestbuy.com -- or Amazon...

[SteveinMN]

I have a question - are department store sales like grocery store sales? As in putting a few loss leaders to bring in the customers?
Well, Black Friday/Cyber Monday certainly work that way. I don't know about regular days, though.

[Lainey]

I agree with both of you, Alan and SteveMN. One of my close friends is an amateur photographer, and was telling us about how she went to the local camera shop and grilled the sales guy, and then went online and bought what he recommended for a much cheaper price.
I don't think she even saw any issues with it, but honestly, I was appalled. Then I realized millions of people do that too, and then seem surprised when these stores go out of business.

[redfox]

The problem is, many folks are using brick and mortar stores as showrooms for whatever consumer item that interests them, but then makes their purchase online. I've heard that Best Buy is considered the best showroom for Amazon.com While it's great for the consumer, the return on investment for brick and mortar stores is declining.

What an interesting take on this! Thanks for this perspective.

[rosarugosa]

I recently did the opposite. I needed to buy a canister vacuum, so I looked online and read reviews on Amazon (love that feature). Narrowed it down to a couple that would be acceptable, then looked to see who had one in my local area, because I wanted to see it in person. I bought it at K-Mart and paid a little bit more willingly, because I know that I want K-Mart to stick around.

[SteveinMN]

I looked online and [snip] then looked to see who had one in my local area, because I wanted to see it in person. I bought it at K-Mart and paid a little bit more willingly, because I know that I want K-Mart to stick around.
I've done that, too, though I have to admit that local retailers don't always make it easy. Try as I might, I haven't found a local store that carries the ink cartridges my printer needs. Had to go on-line for a replacement gasket for my pressure cooker, too. Granted, those are more maintenance items than purchases, but these products are with me till they die. I won't just buy a new one because local parts aren't available.

[Miss Cellane]

I've done that, too, though I have to admit that local retailers don't always make it easy. Try as I might, I haven't found a local store that carries the ink cartridges my printer needs. Had to go on-line for a replacement gasket for my pressure cooker, too. Granted, those are more maintenance items than purchases, but these products are with me till they die. I won't just buy a new one because local parts aren't available.

This is slowly becoming the case for a lot of things. The brick and mortar stores carry lovely new things, but replacement parts are all getting shuffled to on-line. Unless you live somewhere with a lot of small, independent stores, the big chains all carry pretty much the same thing.

Need a lampshade for a bridge lamp? You have to find a specialty lampshade store or go on-line. The nearest store to me that I know of is over an hour's drive away. Need a little, itty-bitty part? If you are lucky, there's an old, small hardware store somewhere nearby that will not only carry it, but have someone on staff who will find it for you and explain how to replace it. Otherwise, you shop on-line.

In one way, it's good that you aren't tied to what the stores around you carry. In other ways, it discourages people from shopping in local stores, because it is easy to get tired of running from store to store looking for something specific and not finding it anywhere.

[Gingerella72]

When I was recently browsing through JC Penney, their "everyday low prices"....don't seem that low to me. I know prices on some items have gone up (I do keep track) and so the price on the sticker is higher than what it used to be. So in that regard, yes, I do miss their sales.

I saw that they haven't done away with their end of season bargain racks so I'm sure people will flock to those and totally ignore the "everyday low prices" on everything else.

[ctg492]

I use JCP as my go to store for clothes/draperies and bath. I went today, came home and said It will never make it. I can not believe how low priced things are there. $10 shirts, $5 shorts and such. Sadly I feel JCP will fall.

[kitten]

I was surprised at their decision to switch up a strategy that was working for them. Plus, it's psychology 101 and promotions 101. The words "sale" and "new" have been magically effective since the start of advertising.

I did find this interesting take on why JCPenney might have changed their promotional model away from reliance on sales. An excerpt from a blog by Jonah Lehrer (yeah, the same guy who got fired from the New Yorker recently) -

Over time, the presence of sales can really diminish a brand...Starting a few years ago, I noticed that everything at the Gap appeared to be on sale. This is problematic for two reasons: 1) It triggers deflationary expectations – why buy the t-shirt now when you can buy the same t-shirt for less in two weeks, after yet another “final” sale? and 2) It erodes the quality of the brand, at least as perceived by consumers. I implicitly assume that Gap has to put t-shirts on sale because they’re of lower quality, when the actual reason might have to do with the overproduction of some factory in Turkey, or an inventory accounting rule, or some other banal corporate mistake. Nevertheless, the sale has had a psychological impact – I associate the brand with stuff people don’t like. There must be a reason why that shirt is so cheap and why the price of that olive oil has been slashed.

http://scienceblogs.com/cortex/2009/04/22/the-psychology-of-the-sale/

[mtnlaurel]

here is a plug for penneys....
they are doing free kid haircuts through the end of August.
I'm taking my son tomorrow.

[gimmethesimplelife]

When I was recently browsing through JC Penney, their "everyday low prices"....don't seem that low to me. I know prices on some items have gone up (I do keep track) and so the price on the sticker is higher than what it used to be. So in that regard, yes, I do miss their sales.

I saw that they haven't done away with their end of season bargain racks so I'm sure people will flock to those and totally ignore the "everyday low prices" on everything else.I remember around Christmas last year I wanted to get some new towels - the ones I had were really thrashed - so I went to Penny's as they had a coupon for $10 off a minumum purchase of $25, and towels are one thing I am not comfortable buying secondhand. So I picked out some nice towels and then at the register, the clerk had another coupon he voluntarily applied to bring the total down more, and I left with three nice towels for just over $10.....this was amazing. I was not surprised to hear of the pricing stategy switch, as this could not keep going on forever. I'm just glad I got those towels when I did.....Rob

[ApatheticNoMore]

I did find this interesting take on why JCPenney might have changed their promotional model away from reliance on sales. An excerpt from a blog by Jonah Lehrer (yeah, the same guy who got fired from the New Yorker recently) -

Over time, the presence of sales can really diminish a brand...Starting a few years ago, I noticed that everything at the Gap appeared to be on sale. This is problematic for two reasons: 1) It triggers deflationary expectations – why buy the t-shirt now when you can buy the same t-shirt for less in two weeks, after yet another “final” sale? and 2) It erodes the quality of the brand, at least as perceived by consumers.

Deflationary expectations probably apply more to housing than t-shirts (or is that the new normal? t-shirts the new big ticket item) and as for the second point, if that was the reasoning at JC Penny, I think they misjudged their target market, which is high-end compared to Wal-Mart and Target maybe (again is that the new normal in this permanent recession?), but really isn't a high-end market. Maybe Macy's (although I'm doubtful) or Nordstroms or Neiman Marcus could go the "I pay more for quality" route (even though honestly the clothing these days, no matter what the brand name is NOT quality), but JC Penny, I don't know ....


There must be a reason why that shirt is so cheap and why the price of that olive oil has been slashed.

this is often the case with the deeply discounted sales rack. Trying to stay disciplined to look for bargains, a diamond in the rough, but ... no wonder noone bought these clothes when they were full price, these clothes are HIDIOUS, ugliest clothes in the store!