No more of these. Can consumers really comprehend “honest” pricing? Apparently they’re having a hard time doing so. What does this teach you in your consignment, resale, thrift shop?
I’ve been haunting Penney’s recently.
It never was my favorite store, but it’s research. (Plus DuH likes their Tshirts.)
What I’m watching is their Giant Step for Shopperkind. RIck, our old buddy who seemingly has deserted us, suggests we read ‘Fair and square’ pricing? That’ll never work, JC Penney. We like being shafted I agree. For example:
If a firm tries to educate consumers on tricks and traps, and tries to offer an honest product, a funny thing happens: Consumers say, “Thank you for the tips,” and go back to the tricky companies, where they exploit the new knowledge to get cheaper prices, leaving the “honest” firm in the dust.
And yes, you should download and read the 37-page Shrouded Attributes, Consumer Myopia, and Information Suppression in Competitive Markets if you truly want to understand consumer motivation and how it affects your “little” shop.
Shrouding, debiasing, lots to ponder here. I must say, I can WATCH myself failing for “anchoring” every single time. Even when I know better.
But the real problem is Penney’s ill-fated attempt to cast itself as the only fair poker player in a game of cheats. Shoppers just aren’t buying it. However unsophisticated consumers are, very few of them believe a pair of shoes bought at Penney’s everyday low price will be cheaper than a pair of shoes bought at Macy’s on clearance with a 25 percent off coupon.
Auntie Kate The Resale Expert 
[…] ran an article, Sometimes, We Want Prices to Fool Us, on the J.C.Penney misstep. They came to the same conclusion that I foresaw 10 months ago, but that’s not what I want to talk about […]
Great topic Kate! We’ve been talking bout all the “fake” sales / coupons / big markdowns, etc. that seem to add perceived value and entice shoppers in to the stores. I dislike them on principal and much prefer a genuine deal any day but they are so pervasive right now. Bed Bath & Beyond is 20% off every purchase with a coupon, Kohls has regular 20-24% off coupons with additional Kohl’s bucks for another day, JoAnns and Michael’s Craft stores have coupons in every Sunday paper – they mark down 20% after one month and go to clearance prices 50-70% off before the holiday even comes.
In our store, we would have to mark it up, wait a few weeks, then offer 20% off which would equal the regular starting price. The result would be the VERY best items would sell at the inflated price but the majority would be selling at deep discounts after the next round of mark downs, to say 40% off or more. They aren’t real (40% would only equal our regular 20% off price) So…. We’re not sure that this is what we want to do but we are thinking about it. It’s what shoppers in our area have been trained to expect.
Jenni, I understand comPLETEly. I too dislike it on principle, and don’t understand why customers don’t realized they are being played. I mean, come on, 20% off everything every day just means starting prices are 20+% higher than they “need” to be, to allow the businesses to keep in business. So rational consumers “refuse” to pay the “original asking” price because they know it’s inflated. I know I have flinched at paying “full” price, even when the dollar difference is miniscule, knowing that “it’ll be less soon”…
But we know we MUST operate as customers want, even if it is irrational. So is the only tactic left to OVERprice intentionally? That’s what jcp is trying to combat, and it’s a biggie. I know I wouldn’t have chosen that course for them. It’s pretty ballsy of them and I’ll be interested to see how it plays out.
We have been fighting the good fight ever since we opened almost three years ago. We educate, explain, and point out – that our great prices ensure that not much hangs around long enough for a mark down. We encourage them to consider the piece of furniture they are looking at and if they think i’s a fair price, just to grab it now while it’s still here. (it helps that those things that were here last month are few and far between)
I still like honest pricing the best and I feel like the fake sales just reward people for refusing to pay your price, encourages haggling and punishes those shoppers who aren’t comfortable asking for a reduction.
I also viewed JCP more positively after the change, but I still haven’t been in their store to see how it’s working out.
My store doesn’t offer any sales or coupons yet (have been open 2 months now), but I’m planning to run an “End of Spring” sale now through the 21st. We have pretty good traffic already so I’ve been waiting, but I have noticed a lot of people looking things over, considering it, and then leaving empty-handed. I think a sale/coupon will help by giving them a reason/excuse to buy the item NOW instead of waiting and thinking about it. If anything, the sales at Kohl’s and other JCP competitors give me a sense of urgency–a reason that I can’t wait and come back later, and a reason to make sure I get in the store by a certain date.
I hope it works out for them but I suppose time will tell!
My friend has a consignment store and I work there. She’s had to reduce
the hours for two of us to one day a week, and let another person go entirely
because of business being down almost 20% since last year. I figure it’s due to the local Macy’s and Kohl’s great deals. We’re trying to figure out what to do to increase business again! She has a great quality store, her prices are even lower than other consignments stores in the area, is well set up and organized,
and we don’t know what else to do. Coupons are very rarely brought in, but we do offer them on the local calendar. Since summer is almost here and business usually gets even worse, we need some help. Coupons aren’t doing it!
I don’t have a consignment, but I do have some favorites I love to shop at. One thing that has been popular in my favorite downtown antique shops is they have a once a month “flea market” get together with other shops who choose to participate. They pay for a booth or space on the turf. Nothing formally laid out.
It is always the same 3rd Saturday every month, they found a spot in a vacant building andfield near their stores convenient to all, and open up shop outside for a day, rain or shine (not sure who the lucky ones are to get a spot inside the building), the local police block off a small portion of the street so buyers can roam back and forth with no traffic. They advertise by email and have a website specific to the event. Sign up sheets at each vendor to subscribe to the website. They advertise to decorators and interior designers more specifically and the items displayed tend to cater more to them but still bargains can be found.
This way they are creating an anticipated “event” and are friends with each other too which is very nice to see. It gives everyone there a chance to advertise and hand out maps to their shops. A repeating event is a good way to advertise and bring in traffic and buyers know probably there will be sales or “special pricing” during the event and it can be relayed in the email reminders.
@Linda – by any chance has a Savers opened up in your area? I have been wondering how they affect more upscale consignment stores.
Must just be me, I got the ads and am waiting to see how it plays out. I like the idea of a price being the price that is best. But then, I was a huge Saturn fan. There was no haggling, the price was the price. I like that, a lot. I believe that retailers have “trained” consumers to wait for the coupons or the sale or the next promo. It has affect my resale because my customers “expect” a coupon. I have tried sales, coupons and promos, and found that it was a revolving door that we got stuck in. I prefer to have great prices and let that do the talking. I wish JCP the best. They are taking a huge chance.
Thanks Ruth, I too believe in “great prices doing the talking” and in letting shoppers know that prices go lower quickly “if no one buys that out from under you in the meanwhile.” The question really is, for jcp and for all retailers… how does the PUBLIC think about coupons, sales, “Price-Slashing” events?
I don’t think I offered a coupon (besides birthday discounts) more than 3-4 times, and definitely never had a store-wide sale, in two decades. But of course, the consumer of today is the one that needs to be understood. If a coupon makes her feel like a savvy shopper, perhaps we need to offer them. The question, of course, is how to be able to do this without sacrificing our profits.
I honestly didn’t catch on to the “new” JCP branding. I’ve been waiting to see some new coupons from them and it hasn’t happened! LOL I basically only go there for the hairdressers – if I see an item on the racks that catches my eye I used to wait for a coupon to go back for it. Now I guess I won’t.
Great answer, Kate… something’s not worth buying unless you have a coupon and can feel very savvy about buying it, correct? Something for all retailers, especially resalers, to ponder. Consumers want to be EMPOWERED, and coupons seem to do that. Is that a correct interpretation of your comment?
Yes – that is a correct interpretation. May be just a psychological game but I don’t know – There have been a few times when I went to JCPs with a coupon – caught a really great end of season sale – and walked out with armloads for very little money. I can see that they weren’t getting rich that way but it did get me back into the store and eyeing items I might have missed before. Those memories make me feel good. I wouldn’t say all things are not worth buying without a coupon but when I know the great things I can get at a consignment or thrift store for very little money I don’t want to spend big bucks for items that may fall apart or end up at the bottom of my closet (AKA the WHY did I buy THAT??? pile.)
While I don’t have a resale shop, what I miss about the old JCP is the communication. They just stopped. That is hurting them I think and for all of us bombarded with emails, we still need to be reminded WHY we should like them even if they aren’t shoving coupons down our throats anymore. I just need to be reminded they are out there and need my business.
Interesting. They’ve stopped using emails as a way to connect? For sure, every retail business needs to remind consumers that they’re out there. Can’t believe they’ve abandoned that!
Agree with Debbi – I saw the new ads and didn’t catch the message at all – I’ve been waiting for the coupons to come too.
I did get an email from them this week – their “Rewards” program – something about some wrist watches that I had no interest in. Didn’t appear to be a sale or anything – maybe a contest? Pfft. Would have preferred a coupon for even $3 off an item.
Man, that was a lousy mailing, wasn’t it, if you couldn’t even figure out what the offer was! And really… a $3 coupon would have been enough to motivate you to get in the car and drive to the mall? That’s interesting. (I know you plucked that number out of the air, but it brings up another interesting topic: which coupons are most motivating?)
Well, seeing as I don’t shop department stores it really does not affect me. BUT I do like their new tv ads and my perception of them has changed greatly-to the better.
How do you feel it’s affected your consignment shop clientele, Deb?