J.C. Penney Launches New Pricing Strategy: What It Means for You
Come February 1st, J.C. Penney customers can kiss goodbye the madness and mess of traditional sale shopping at this chain of American mid-range department stores, and welcome clear, straightforward, predictable pricing instead. The 100+ year old company is taking a leap into the unknown by trying to entice, or retrain rather, bargain thirsty shoppers of the current weak economy to appreciate and accept an everyday low price in place of a fluctuating, unpredictable sale price. What's their bait? The promise of permanently marking down all of their merchandise by at least 40 percent.
Consumers Still Save with Modern Sale Strategy
For those of us who thrive on the thrill of a good bargain-hunt, this strategy may seem devastating, but for most Americans (who don't have the time nor the energy to invest in couponing and sale stalking,) the new strategy is more of a godsend. How's it going to work? It's a fairly simple three-tiered solution that offers "Every Day" low pricing, "Monthly Value" discounts on select merchandise each month, and "Best Price" Clearance deals.
Here's how it works:
"Every Day" Value Pricing
The "Every Day" low pricing model will mean that regular prices will become sale prices permanently. Shoppers will have to train their eyes to stop looking for weekend savings events or sale ad prices, and just accept that the ticketed price is a "Sale" price that's available every day. The company plans to use sales data from last year to discount prices on all merchandise at least 40 percent or lower than the previous year's prices—thus arriving at the "Every Day" value price. Penney's CEO Ron Johnson says, "Customers will not pay literally a penny more than the true value of the product."
A single price point approach might sound like less of a hassle and a better deal for shoppers, but it's not how we're trained to shop—on a recent visit to my local J.C. Penney where the change had already taken place, I found it to be nothing but frustrating. It seems all too final knowing that the ticket price is the best I'll see all season and the one I'm stuck paying no matter what.
"Monthly Value" Discounts
Each month, the retailer will pick items to go on sale for a "Month-Long Value." Shoppers can expect to see items like jewelry or Valentine's Day gifts going on sale in February, but think seasonal here, and not so much departmental or categorical. Another change will be less advertisements and coupons in your mailboxes. The company will replace old mailers with a 96-page colorful catalog that highlights "Monthly Value" items which will be mailed each month to customers along with other select promotional efforts. The perk here? Less junk in your mailbox and less pressure to rush down and shop on the typical weekend sale schedule.
"Best Price" Clearance Deals
The first question on many of our minds is, "What about Clearance pricing?". While I'd love to tell you it will remain intact, I'd hate to get your hopes up. It will, however, be a sort of hybrid to what most shoppers expect. Items that don't sell well will still go on Clearance, but only during the first and third Friday of every month (when many Americans get paid). They won't, however, have any additional savings coming off at the register. Instead, they'll be dubbed "Best Prices," which should alert customers that this is the cheapest price.
Why no extra savings or slashed down price tags? It's part of their effort for simpler shopping: less signage, easier to read tickets, etc. In fact, ticket appearances will change drastically; they'll use whole figures when pricing items, so you won't see items with a price tag of $19.99, but rather $19 or $20, and if an item gets a new price, it gets a new tag too. Tags will be even be colored according to their coordinating mark downs: red tags indicate an "Every Day" price, white tags represent a "Month-Long Value" and blue tags designate a "Best Price." I love that tickets will no longer be crowded by sale sticker atop sale sticker, making it hard for shoppers to locate correct pricing. Plus, if an item wanders to another rack, there won't be confusion as to what the item's price is suppose to be.
Have questions about the new sales strategy? Fire 'em our way and we'll see if we can get them answered. Plus, share your thoughts and opinions about it below!