As part of JCPenney's new pricing strategy, they're marking down all of their merchandise by at least 40 percent — permanently — so that shoppers don't have to wait for sales to get the best price. To make up for the revenue they'll sacrifice to do this, Penney's will have fewer sales and promotions throughout the year. This is a novel concept: Rather than trying to lure customers with crazy one-time-only bargains, they're hoping to tempt them with consistently low prices.
Will this be effective? During the weak economy, most retailers have turned to a steady diet of promotions to boost sales (as evidenced by the onslaught of e-mail you get daily from J.Crew, Saks, Gilt Groupe, Rue La La, and countless other retail sites informing you of whatever they have on discount just at the moment). And isn't it so great when you manage to snag yourself that 85-percent-off deal? But it's also annoying to wonder when and if an item will go on sale, and whether your size will still be available by that time. In any case, this strategy sometimes winds up damaging retailers' revenues, because the shoppers who go after discounts often don't buy anything else.
Penney's new CEO, Ron Johnson, joined the company from Apple in November; this pricing overhaul is his first big move on the job. Here are some other details of his strategy, courtesy of HuffPo:
- Sale prices become everyday prices. The company will use sales data from last year to slash prices on all merchandise at least 40 percent or lower than the previous year's prices. So, a woman's St. John's Bay blouse regularly priced at $14.99 could have the "Every Day" price of $7.
- Fewer sales. The retailer will pick items to go on sale each month for a "Month-Long Value." For instance, jewelry and Valentine's Day gifts would go on sale in February, while Christmas decorations would be discounted in November. Items that don't sell well would go on clearance during the first and third Friday of every month when many Americans get paid. Those items will be tagged "Best Prices," signaling to customers that's the cheapest price.
- New tags. The retailer used to pile stickers on price tags to indicate each time an item was marked down. But now each time an item gets a new price, it gets a new tag too. A red tag indicates an "Every Day" price, a white tag a "Month-Long Value" and a blue tag a "Best Price."
- Simpler pricing. Penney will use whole figures when pricing items. In other words, you won't see jeans with a price tag of $19.99, but rather $19 or $20.
It'll be interesting to see how this turns out. Would you prefer things be cheaper on the whole, or does that ruin the thrill of knowing you got a rock-bottom price just in the nick of time?
Most Viewed Stories
Trump’s Latest Executive Order Will Affect Women’s Health Worldwide
Josh Kushner, Ivanka Trump’s Brother-in-Law, Was Reportedly Spotted at the Women’s March
A Scene from the D.C. Women’s March
Like Trump, Taylor Swift Cares About Numbers
Calvin Klein Quietly Unveils First Raf Simons Collection
Museums Across the World Are Collecting Women’s March Signs
Why the Election of 9 Black Female Judges in Alabama Matters
Bernie Sanders Wore the Only Appropriate Outfit to Trump’s Inauguration
Pro-Choice and Pro-Life Marchers Came Face-to-Face at the Women’s March
Sean Spicer Chews and Swallows 35 Pieces of Gum Every Day Before Noon
From Our Partners
powered by PubExchange
The Cut’s Latest Fashion FeaturesCiara's Wedding Dress Was Too Big for the Chapel
To be fair, it was a 13 foot-long dress.You and Rihanna Will Both Want to Invest in Dior’s New Bag
It's got something for everyone.Polo Shirts Have Turned Their Back on Ryan Lochte
Along with his other major sponsors.Ryan Lochte Will No Longer Be Paid to Wear Tiny Bathing Suits
Speedo remains committed to transparency.Laura Brown Is the New Editor-in-Chief of InStyle
After 11 years at Harper’s Bazaar.Tyra Banks Is Going to Teach a Class on Smizing at Stanford
"If I see somebody not paying attention, I’m gonna call on them."This Floating Pier Is the Most Zen Installation Ever
Walking on water in Italy.Nation Is Appalled by Matt Lauer’s Nude Ankles During Ryan Lochte Interview
What’s the opposite of “Jeah”?8 People at the Life of Pablo Pop-up Explain Why Kanye West Is a God
"I mean, Kanye West is just Kanye West. There's not more or less you can say about Kanye West. He's just Mr. West!"A T-shirt Is Enough
Simplicity, versatility, and cool. What more could you want?
She took a perfect pencil dive off a 30-foot yacht.American Apparel Is Being Sued by Former Workers
As the company considers putting itself up for sale.A Gendered History of the Tailored Suit
From Marlon Brando to Coco Chanel.How Zendaya Developed Such Great Style at the Young Age of 19
The star's best looks from Disney to now.Proof That If You’re Chic Enough, a Little Federal Investigation Doesn’t Matter
Is this the best they could do?5,300-Year-Old Mummified Iceman Probably Would’ve Been a Street-Style Star
He had several different looks and was “pretty picky.”J.Crew Has Identified 226 Shades of Pink
Even more than there are shades of gray.Gigi and Bella Hadid Merch Is Now Somehow a Thing That Is Happening
Today in Hadidiana.Gird Your Loins for the Return of Yeezy to New York Fashion Week
The season approaches.This Indie Brand Had a Great Response to Ivanka Trump
When she bought one of their cuffs, they donated the proceeds to the Clinton campaign.