shocked, shocked to find out that JC Penny is using fake prices and meaningless discounts!
http://www.huffingtonpost.com/2014/03/19/jcpenney-prices_n_4986649.html?ncid=txtlnkusaolp00000592
Oh noes! Next we’ll find out that Kohl’s “sale” prices (which happen to be on every single item in the store) are also based on artificially inflated prices!
How disillusioning! This is worse than finding out there’s no Santa Claus!
As a bonus revelation, the photos of the Michael Graves teakettle in the article are of the teakettle that supposedly looks like a silhouette of Hitler. So I’ve Godwinized the thread!
And as the article goes on to point out, J.C. Penney under their previous CEO learned the hard way how foolish it is to overestimate the intelligence of the average shopper.
His “honest pricing” — no sales, no coupons, no discounts — proved to be a huge flop. The public craves sales and discounts, even when they’re quite obviously completely phony.
The bottom line: people are idiots.
[QUOTE=DChord568]
The bottom line: people are idiots.
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Well, to some extent, yes. But it’s more accurate to say that consumers have been conditioned into being idiots, especially about anything to do with “value.”
I was one of the people who loved the “honest pricing” scheme. Other people are amazingly stupid.
My running joke with my SO is to try and go to Kohl’s on a day when they are NOT having a sale.
I don’t shop at JC Penny but I imagine it is the same thing.
“Honest pricing” came about because the president came from running Apple stores, where you have a people who will gladly pay any price you ask. It doesn’t translate into most other retail, since if the price is too high, you go somewhere else. He was the one who was stupid, not the customers.
Well, the board that hired him is at least as stupid. If anyone should understand retailing, it’s one of the traditional “department stores.”
Mrs. B. is furious at JCP because part of their makeover was getting rid of very nearly the ONLY wide and continuing line of women’s talls sold. Mr. Genius Bar just didn’t like the lower profit margins even though they all but owned that market segment.
Ever try to buy a mattress from a department store that’s not “on sale”? I don’t think it’s possible.
The point was that portraying “the price” as just the price was worse than having inflated bullshit prices with perpetual sales.
BECAUSE consumers, especially retail soft-goods shoppers, have become conditioned to sale prices being real prices… no matter how deep the BS got.
It really is a sharp portrait of how deeply consumer conditioning runs, despite the 102% of people who claim they aren’t influenced by it.
There are a non-trivial number of people who fall for the “x% off” sign attached to an article with a monstrous mark-up. In their heads, they see “I’m getting a deal” rather than “I’m getting screwed.”
Never forget, retail is always paying attention to shopping habits, and has made a science of separating people from their cash 
I can’t say for sure if Penney’s “honest prices” were comparable to other stores’ sale prices, or were, in fact, actually “too high.”
But my wife worked for a regional chain of department stores for several years, and customers would regularly tell her “XXX has this same item on sale.”
She would advise that they check that store’s sale price, which nine times out of ten equated more or less exactly to her store’s regular price.
The former CEO’s stupidity came in overestimating the intelligence of the buying public. You can’t wish people into being rational, no matter how much you might want to.
All I know is that, not being on sale seemed to result in me not hearing about the prices at all. We didn’t get our usual mini-magazines touting the latest sales. We just forgot JCP(enney) existed for a while.
You have to be a savvy shopper. I refuse to buy an item for $20 when I can drive across town and get it for $19.99!
And jewelry is almost always 80% off.
Well, reality is a helluva lot more complicated than that. Yes, the CEO completely misread the situation, but I’m not sure rationality or intelligence came into any part of the equation.
The CEO came from a company that has been able to deny reality and wish whatever it wanted (in marketing/sales/pricing terms) into existence for decades. Apple has virtually no peers in that respect, so whether this control of a market is deserved or based on some firm foundation or whatever is irrelevant. It’s somewhere between unique and exceedingly rare in major business. Believing otherwise is to wear a mighty tight set of blinkers - and Apple is hardly unaware of how unique their position is; it’s their proudest possession!
Thinking that a variation of that model would work not only for another company, not only for a company that’s about as different from Apple in every respect as it’s possible to get, but for such a company with no transition or public education period - now THAT’S blinkered.
But in the end, trying to go against 50-100 years of careful conditioning by department store and mass retailer practice - Sale! Sale! Sale! - is so monumentally stupid and short-sighted that words fail me. Here’s a guy who has built his hotshot career at the pinnacle of 20th-21st-century marketing and then completely fails to understand how the last 50 years of marketing shaped the audience he was trying to sell to… I can only chalk it up to Apple-flavored arrogance that he thought he could brush aside that generational conditioning and make a new set of rules overnight.
And drop the women’ talls line. That was really, really stupid. (Mrs. B. made me put that in.)
I don’t really think that’s it.
I mean, I’m an Apple customer, and I am very price conscious. But one thing I love about Apple’s pricing is that I never have to waste my time searching for a discount somewhere, since I simply know that there isn’t one. I’ve noticed more and more upscale brands taking this approach, and I really appreciate it. I can very quickly decide if something is worth it to me at the price it’s offered, and I know that if it’s not, I look elsewhere. I never have to wait for a sale, or shop a dozen stores, or mess with stupid coupon code websites. And I never feel dumb later when I find a lower price somewhere. How nice!
You give something up in market segmentation, but you can make it back in customer satisfaction (and you can do market segmentation in other ways. Apple does it by offering older models at lower costs).
That said, obviously not everyone thinks the way I do.
I went there more during that period than any other, and the prices were reasonable. I also liked that strategy, which is further evidence that a company can develop an excellent marketing strategy by asking me what I like and doing exactly the opposite.
People have been conditioned that anything featured is cheap and anything not featured is expensive. Safeway puts absolutely normal prices in boxes in their fliers which I assume they do because they sell more that way - even though the item is not remotely on sale.
I applaud the states that are taking consumer protection action against any of these companies. It is not a “sale” and is an absolute deception to consumers to call it such when it is actually the normal price. Are some consumers pretty stupid? Yes, and that’s why we have such laws.