“In early 2012, JC Penney promised the end of ‘fake prices’ — ones that were inflated just so that shoppers could be tricked into thinking the inevitable discounts represented amazing deals,” Brad Tuttle reports for TIME Magazine. “Well, it’s already time to welcome back discounts and inflated prices alike.”
“Among other reasons, JC Penney CEO Ron Johnson lost his job recently because customers seemed to hate the no-coupons, no-discounting “fair and square” pricing that was a core part of the retailer’s dramatic 2012 makeover,” Tuttle reports. “In a new ad, JC Penney is apologizing for the changes made under Johnson. ‘It’s no secret. Recently, JC Penney changed,’ the ad’s voice-over states. ‘Some changes you liked and some you didn’t, but what matters from mistakes is what we learn. We learned a very simple thing, to listen to you.'”
Tuttle reports, “JC Penney’s changes of late aren’t limited to an uptick in sales and coupons. As Reuters reported in late March, even before Johnson was fired, the retailer had quietly started raising its ‘everyday’ prices—mainly so that stores could regularly put them on sale and hope that more shoppers bite. ‘Under the strategy, an Arizona crewneck T-shirt that had an ‘everyday’ price of $5 now has a $6 pricetag to allow Penney more room to offer a markdown and arrive at the same price,’ the article explained.
Read more: http://business.time.com/2013/05/02/jc-penney-reintroduces-fake-prices-and-lots-of-coupons-too-of-course/#ixzz2SXGH7fND
Read more in the full article here.
MacDailyNews Note: Is lying to your customers really a winning strategy?
There’s a sucker born every minute. – David Hannum
Regardless, this is likely our last JC Penney article — to the chagrin of retail department store afficiandos the world over, we’re sure — unless and until JCP goes tits up, in which case we’ll take a moment to remind those who destroyed what’s left of it that they should have stuck with Johnson and given him time to execute his plan instead of panicking and yanking out the plug way too early.
Related articles:
Three ex-Apple execs exit JC Penney following Ron Johnson ouster – April 11, 2013
Yoshikami: The Ron Johnson disaster at JC Penney – April 9, 2013
Ron Johnson: Apple Stores vs. J.C. Penney – April 9, 2013
Will Apple bring Ron Johnson back? – April 8, 2013
Ron Johnson out as JC Penney CEO, says source – April 8, 2013
Ron Johnson starting to look a lot more maniacal than brilliant – March 8, 2013
If JC Penney fires CEO Ron Johnson, analyst predicts bankruptcy – March 8, 2013
J.C. Penney CEO Ron Johnson cuts 2,200 more jobs as sales plunge – March 8, 2013
J.C. Penney posts large loss as sales sink further – February 27, 2013
JC Penney CEO Ron Johnson capitulates, brings back sales – January 28, 2013
Apple retail’s Ron Johnson and John Browett have proved the Peter Principle is alive and well – November 13, 2012
CEO Ron Johnson switches J.C. Penney to two-tier pricing with price-match guarantee – July 26, 2012
Why is Ron Johnson’s retail strategy for J.C. Penney failing? – June 26, 2012
J.C Penney’s stock tumbles after key exec’s abrupt exit – June 19, 2012
J.C. Penney reports loss and plummeting sales in 1Q – May 15, 2012
Why Ron Johnson left Apple to head JC Penney – April 30, 2012
J.C. Penney lures another executive from Apple – April 26, 2012
Steve Jobs’ ex-lieutenant Ron Johnson adds $1.5 billion to J.C. Penney in two days – January 30, 2012
J.C. Penney CEO Ron Johnson: What I learned building the Apple Store – November 21, 2011
New J.C. Penney CEO Johnson hiring former Apple co-workers – November 9, 2011
Why Apple’s retail genius Ron Johnson is paying for the privilege of running J.C. Penney – June 15, 2011
Apple’s retail store chief Johnson off to J.C. Penney; expected to become CEO within months – June 14, 2011
Microsoft has been lying to their customers for decades.
It seems to work.
And today we have Google who is even worse!
Regarding MDN’s take: Asking for a higher price is not lying, it’s part of negotiating. Welcome to the real world.
I sold vases in my store for $6. They cost me $1. So what? Soda costs 6 cents including the cup and straw. How many of you pay more than a buck?
No one is complaining about anyone making a profit. Your unit cost is irrelevant. If $1 is a fair price for a soda, then sell it at that price. Don’t mark it up to $3 to offer random flash sales and coupons worth 66% off to customers who are lucky enough to happen in your store at the right time or have enough free time to search for coupons. That is what is so crazy about retail, and what Ron Johnson attempted to do at jcp.
So whats the difference between the $1 buck soda vs buy a hamburger and get a free soda? Because I mark up the soda so much I can make it look like I can give it away for free. Same thing as offering it for $3 with a 65% off coupon. It just fools different people.
It’s just a game. If you dont like coupons dont use ’em. Go shopping somewhere else. Go to the place that offers a free suit when you buy two if that game makes you feel better.
If you dont like sales dont go to them, either. I’m glad I have a choice.
And then what is a “fair” price? That is so subjective. If someone is willing to pay $3 for a soda then that is the “fair” price. Ever gone to a sporting event? Same thing. Same game. Can’t stand it then I can’t help you.
I was patronizing JCP quite often while Ron was getting his vision in place. It was great. Pricing made sense with no screwing around with pseudo regular and sales prices. I have been back since and it is back to the same old BS. Prices have definitely gone up and at least when I was there, no sales in sight. I think JCP is set to go the way of the dodo bird. I give Ron credit for trying something different.
JCP is going to look back at this decision and realize they were wrong. Stuck in the old thinking.
What is worse? JC Penney or Sears?
Answer: Both. Who shops there anyways?
Kohls.
Sears is worse. They outsourced their Craftsman hand tool manufacturing overseas back in the early 2000s (and added the cheaper “Companion” product line without the lifetime warranty) and they alienated me in a hurry. I have Craftsman tools from my youth that my father had bought long before (say 50+ years), and they are still fine. In contrast, a more recently purchased set of Craftsman combo wrenches rusted in my toolbox in the *same drawer* as the antique wrenches.
No more Craftsman for me!
I’m with you. I haven’t been in a Sears in decades and never missed it. These days Sears owns K-Mart, which I will visit on occasion if only to avoid nasty Walmart.
Go back to the mom and pop stores if at all possible.
Here’s a great example: I can go buy a gold plated Monster brand HDMI to DVI adapter cable at a big box chain store for as much as $80. No thank you. So I got an excellent generic cable at a local guy’s computer repair shop for $5.
You’re saying that K-Mart is less nasty than Wal-Mart? REALLY? Whoa. You must be shopping the Beverly Hills K-Marts, DC, for the ones where I live are Skid-Row in quality.
We have some realitively nice K-Marts in Nor Cal. The trick, they had to have been built in the 90s.
Walmart is better, then it’s Target, then Sears, then JCP then Macy’s.
But they all are different. Kohls is like Mervyn’s used to be.
I mostly shop at Fry’s though.
I’m no fan of the Barn-O-Crap, blundering minimum wage aisle walker stores, which is what both essentially are. Walmart, however, has been one of the prime drivers of US manufacturing off shore. As such, frack-the-living-hell out of Walmart. Not that K-Mart is any saint at keeping US companies at home.
Sorry – KMART owns SEARS!
Technically, no. Sears did the buying, as in forking over the dough. As to which actually makes more profit, I haven’t cared.
I don’t have time to play games like coming back tomorrow when the price is lower, or clipping coupons. I AVOID places where I might end up paying more for the convenience of NOT jumping through hoops. JCP is now off my list of potential places to shop. I just won’t go there.
And BTW, this is something Apple has always understood.
Who the hell is gonna go back and forth to JCPenney multiple times hoping they finally get that striped cardigan “on sale”? No wonder they were almost out of business long before Ron Johnson tried to clean that shit up.
Now you’ve done it. Someone we know here is soon to chastise you over your “tit’s up” language MDN. Should have said breasts skyward or something more politically correct.
I think you are confusing political correctness with mere rudeness.
Tit is just a vulgar word for a breast. Nothing politically incorrect there, just impolite.
Someone at MDN has been reading The Register lately, I hazard to guess. 😉
How about teet? Better?
Well no. It’s teat.
I hope that won’t upset the Holsteins and guernseys.
Actually “boobs up” would have been funnier.
Mere rudeness? Udder rudeness, I say!
I “herd” you, but I think you are just “cow-towwing” to the politically correct, aren’t “ewe”?
Wow you sure “milked” those puns for all they were worth!
Everyone forgets that the “high prices with discounts” strategy wasn’t working either. That’s why Ron Johnson was hired. Maybe it won’t be as bad, but they don’t have a strategy for that leads to reasonable profits.
And now, after Ron Johnson put in fair, accurate pricing, JCP is going to raise prices just to put the items on “sale” back down to Ron’s fair prices.
The difference is that the regular customers know the game and either left with Ron’s changes, or are going to have their eyes opened to the fact that JCP has been playing them all along. Or they have to wait until the Mid-Month Hump Day Sale next Wednesday to save with a coupon.
Circling the drain . . . .
One thought too late: I’d have followed Ron Johnson’s approach except:
– I would have kept a few serious weekly sales if only to make the bleary JC Penney shoppers happy. And they would have been obviously for real cheap sales.
– I would not have been quite so insistent upon the quality paper, professional level photography ad inserts. Yes, they were and continue to be Apple ad lovely with white backgrounds and the focus on the products. But shoving JC Penney into the ranks of designer upper crust shopping doesn’t work. That’s not Penneys. Quality for cheap is Penneys, at least according to much of its history. The cheap stuff hawks lost interest and looked elsewhere if only out of being repelled from the fancy image change. This same phenomenon happens with many PC shoppers who are repelled from Macs if only because they are that glorious upper crust computer in their marketing imagery. Or something like that. It’s all rather dissonant to my ear. 😯
Agreed, I think Ron moved too quickly to change virtually everything that the customer sees and experiences. Something like that you have to phase in, keeping some old favorites while you change some other aspects. But perhaps Ron saw just how dire JCP’s position was once he took over and got a good look at the entire picture, and decided that if he didn’t change it and change if fast, there would be no JCP left to change.
An idealist, a dreamer, thinking different…
What a scam. Canadian Tire does this all the time in CAD (no they don’t just sell tires FYI). Pretty much everything sells for 20 – 70% off at one point or another and the prices can be very reasonable when they have the bigger discounts. But much of what they sell at regular price is way higher than competing stores “regular” price. Its also illegal here to advertise something at a certain “regular price” if it hasn’t been selling for that price for at least 3 months (something like that anyway).
From what I could tell, Ron Johnson was the one doing the lying. His low prices were 30% to 50 % higher than they had been under the previous regime.
Everyone would tweet their thoughts with #jcplistens to @JCPenny since they’re now “listening” to their customers.
The headline kind of says it all.
Nothing more to see here, or in their stores.
Not much Mac News
Looks like JCPenny’s taking a page from the Samdung marketing strategy.
J C Penney is primarily a clothing retailer these days. Sales are a way of life for clothing retailers – you have to clear stock at the end of the season, or it will end up in a landfill somewhere. My wife shopped there regularly for clothing (both kids and adult) and was a “mid-line” shopper – she would look at the sale racks, but would buy their “normal” price stuff as needed. Having multiple prices for the same goods allows a seller to maximize revenue without hurting volume – those consumers who were very price sensitive could jump through hoops to save some money, while more upscale customers could pay full price (which was still cheaper than any of the other big clothing stores like Macy’s or Nordstrom). Besides getting rid of sales, the makeover greatly reduced the selection of products – instead of a couple aisles of small electrics, there is now a “Bodum boutique” -150 sq ft of yuppie coffee makers. Maybe Penneys was doomed anyway, but reducing selection while increasing effective prices has gutted the place. In the meantime, Macy’s has a very good but pricey selection that they are discounting like mad…
JCP is not alone in “marking up” things just to be able to discount them. It’s rather common.
ALL companies price this way….and I mean ALL companies, especially retail companies!!!
This is NOTHING new, it has been going on for DECADES!!
THIS IS STANDARD BUSINESS PRACTICE!!!
It is especially true of “discount” retailers between November and the end of December.
Retailers like WalMart will hike up prices around August through November at least 50% or MORE……then around “Black Friday” they will “discount” items heavily, so you think you are getting a good deal, when in fact, you are paying FULL standard retail price!!
I have been in retail for many years, and this has been going on since retail business began.
THEY MARK IT UP, TO PUT IT ON SALE, AND STILL GET THE FULL RETAIL PRICE FOR IT!.
The ONLY TRUE discounts you get is from the clearance sections after a season is over with. Out of date or out of season items will be sold at a real discount, in order to get them out of stock and off the floor, so regular priced stock can be placed out on the floor.