JCPenney changing their pricing structure

[disneysteve]

Has anyone heard about this? JCPenney announced that they will no longer run weekly sales. Instead, they are setting everyday low prices, monthly specials and clearances. Also, and I thought this was particularly interesting, they will switch to whole dollar pricing. No more $19.99 - it will now be $20.00 even.

"The so-called "Fair and Square" pricing program will feature everyday prices, month-long values and "best prices," which the retailer said will be its lowest prices always happening on the first and third Fridays of every month.

"Rather than inundating the customer with a relentless series of sales, coupons, rebates and retail gimmicks, JCPenney will host 12 promotional events each year, on a monthly calendar. Each month will include even better values on the things customers are looking to buy during the month and a host of exciting products and services that are unique to the month."

I'm curious to see how this goes. I think it is a neat idea and hope it catches on and other stores do the same. Just make the pricing straightforward, do away with all of the ads and coupons and "special" promotions.

[GREENBACK]

I read about this. They have me pegged as a customer. I only shopped there when things were on sale. The sales were good but only because the regular prices were grossly inflated. I hope the other mall stores pay attention to this. I also hope the new regular pricing is similar to the sale prices they offered. I must say that I do like the quality of most of the items they have.

[creditcardfree]

Yes, I have. I think it's a great idea. It's annoying to be looking for a sale or a coupon all the time. I received their catalog in the mail and it looks appealing to shop that way with flat pricing.

[Mr Nice Guy]

Good to know. Thanks DS.

We get taxed on clothing here in Colorado, so a flat dollar price wouldn't make much difference.

[photo]

I read about this in the Wall Street Journal. I'm not a big JCPenney shopper, but I'll probably pay them more heed now. It sounds like a smart move.

[marvholly]

we will have to watch this VERY closely. I am NOT a believer in any business doing anything that is more in the interests of the consumer than their bottom line.

I believe this is also the Walmart system and I have found that MANY items there are just the bottom of the barrel quality wise. Even name brand items (Hanes.....) seem lower quality at Walmart than at say, Target or Kohl's.

[bjl584]

Originally Posted by disneysteve

Has anyone heard about this? JCPenney announced that they will no longer run weekly sales. Instead, they are setting everyday low prices, monthly specials and clearances. Also, and I thought this was particularly interesting, they will switch to whole dollar pricing. No more $19.99 - it will now be $20.00 even.


I'm curious to see how this goes. I think it is a neat idea and hope it catches on and other stores do the same. Just make the pricing straightforward, do away with all of the ads and coupons and "special" promotions.

I believe that this is what Walmart does. Walmart doesn't have a weekly ad circular. They do the everyday low price thing, and any sales that they may have are done monthly.

Walmart does not do even dollar amounts though. They love to price things at $19.99 or $19.88.

[disneysteve]

Originally Posted by bjl584

Walmart does not do even dollar amounts though. They love to price things at $19.99 or $19.88.

I thought that was particularly interesting because every study I've ever seen has demonstrated that people mentally equate $19.88 with $19.00 rather than with $20.00 so it seems cheaper. TV ads will even tout an item being "less than $1,000" when the price is $999.99.

We'll see if it works. JCPenney has been doing poorly so this will either save them or lead to their ultimate demise.

[bjl584]

What to Expect: J.C. Penney’s New Pricing Strategy - ABC News

Here's a short article from ABC news about this very subject.

[photo]

Originally Posted by bjl584

Walmart does not do even dollar amounts though. They love to price things at $19.99 or $19.88.

One of my pet peeves. I would almost rather buy the item for $21.00 instead of $19.99. Companies that charge even dollar amounts have much more respect from me than ones who don't. Even some book publishing companies are starting to get away from ending prices with .99.

[baconexplosion]

There are a lot of places that I won't shop at just because the prices are always inflated. The only time you can get a decent price is when they are running a huge sale...

I might be more inclined to check them out next time I need some clothes for the kids, right now they are not a stop on my list...

No matter what, it's gonna be hard for them to compete with the consignment shop!

[bjl584]

i wonder how much of a phycological effect $19.99 has now that many people don't pay cash and use debit cards instead. It would seem to me that the effect would be much greater if you were using cash and not simply swiping a card.

[kork13]

Originally Posted by bjl584

i wonder how much of a phycological effect $19.99 has now that many people don't pay cash and use debit cards instead. It would seem to me that the effect would be much greater if you were using cash and not simply swiping a card.

There have been a number of studies looking at that .01 difference. Apparently it's actually quite significant. By using an odd cents value (.99, .95, .32, etc), people focus on the whole-dollar figure more than the extra little addition of a few cents. So $19.95 isn't about $20, it's $19 with a bit of meaningless change. Economy of scale takes over at that point, and all those "meaningless cents" become big profits.

As for the cash v. credit, I don't know... I'm guessing here, but I expect purchases would remain about the same, and the variations in the standard cash v. credit purchase studies ("do you spend more using credit?") would carry over fairly strongly.

[marvholly]

Sorry DS & Kork

Guess (KNOW) I am the odd.....person out on the 19.99 = 19 in people's minds. In MY mind I have ALWAYS read 19.99 as $20 or any other comparable pricing - .88, .95......I ALWAYS round anything over .50 UP to the next full dollar.

[kork13]

Originally Posted by marvholly

Sorry DS & Kork

Guess (KNOW) I am the odd.....person out on the 19.99 = 19 in people's minds. In MY mind I have ALWAYS read 19.99 as $20 or any other comparable pricing - .88, .95......I ALWAYS round anything over .50 UP to the next full dollar.

Really, it just depends on how your brain is wired. Typically, visual thinkers will look at it as $19, whereas analytical minds will identify it as $20. Based on what you say just now, I would venture a guess that you also keep detailed lists or calendars, you are almost always on-time, or always aware of the time, and you're not much of an artist.

The pricing generally works for enough of the population for it to be an effective strategy for retailers.

but I digress.........

[cschin4]

I don't know. I suppose it is a good idea for Penney's to try and make some changes. But, i usually go to penney's for sales. If they don't price at a low enough point, then they i think people will quit shopping there. I usually only go for the sales. I go to Walmart for low prices. So, we will see.

[bjl584]

If JCPenny's "everyday low prices" are higher than other similar retailers, then they are going to have a big problem. This strategy is a big gamble IMO.

[disneysteve]

Originally Posted by marvholly

Sorry DS & Kork

Guess (KNOW) I am the odd.....person out on the 19.99 = 19 in people's minds. In MY mind I have ALWAYS read 19.99 as $20 or any other comparable pricing - .88, .95......I ALWAYS round anything over .50 UP to the next full dollar.

I'm just like you. To me, $19.99 or $19.88 or $19.66 registers in my brain as $20. In fact, if it is a taxable item, I'll even add 10% just to come up with a round number of the cost.

Most people don't think that way, though. To them, $19.99 is $19.00.

The stores know this and really play into it. Look around at signs in the store. The 19 will be in nice big 60-point text and the .99 will be in superscript 10-point text. It is just like when a store has a big banner in their window that says, "All shoes on sale $29" but when you get up close you see it says, "and up" in tiny print.

[jpg7n16]

FWIW - I hated those commercials. Did you see em? With all the people yelling "NOOOOO!!"


Every time it came on, I just wanted to yell "NOOOOOOOOOOOOOO!!!!!!"


Guess we'll see, but I don't know if it'll work. I like knowing how much things were originally, and what I was able to scoop them up for. But I usually know what I want before I go in, and even still - I'll compare vs Amazon and eBay on my phone while I'm in store.

So what if JC Penny's straightforward pricing now shows something as $40.00? If I can find it for $25.50 + free shipping online, I can wait.

Besides is it really all that different?

From: What to Expect: J.C. Penney’s New Pricing Strategy - ABC News

“Customers will not pay literally a penny more than the true value of the product,” Johnson told the AP.

...

The company, based in Plano, Texas, will first offer its lowest or “best” prices on the first and third Fridays of every month.

So what you're saying is that the products are priced higher every other day of the month, and are offered at a big discount on every 1st and 3rd Friday? Should I be insulted??

From: What to Expect: J.C. Penney’s New Pricing Strategy - ABC News

Johnson said he believes customers are insulted by department stores’ usual strategy of offering items at high prices, then offering discounts.

[marvholly]

Originally Posted by kork13

Really, it just depends on how your brain is wired. Typically, visual thinkers will look at it as $19, whereas analytical minds will identify it as $20. Based on what you say just now, I would venture a guess that you also keep detailed lists or calendars, you are almost always on-time, or always aware of the time, and you're not much of an artist.

The pricing generally works for enough of the population for it to be an effective strategy for retailers.

but I digress.........

Kork
Got me dead on.

DS

I do the SAME thing re: sales tax. In fact, generally if I am more than 0.25 off from the final bill I check the receopt because there is likely a mistake.