Pinched Penney

You’ve all heard by now that JCPenney has changed their pricing model. Big sales and coupons are out. Everyday values are in, except for their month-long values where chosen items go on sale for the entire month. And let’s not overlook their best price category – a way to take advantage of mark-downs every first and third Friday. Okay, so they haven’t entirely removed themselves from the sale mind-set, however they have adopted a simpler approach to pricing.

Why would they do this? Could it be that customer’s were confused about when to buy? Or that advertising costs spiraled? Perhaps keeping up with sales every few days created too many man hours in tagging, re-tagging, and reprogramming computers/cash registers with price changes. It’s likely the customer mind-set of only wanting to buy when something goes on sale had begun to have a reverse effect. In other words, customers have been trained to buy during a sale and will hold off purchasing. They’ve come to believe that the sale price is the “real price” and to pay more is a rip-off. If you’re the retailer, you don’t want the customer to leave and hope they’ll come back for the weekend sale. You want them to buy before they leave your store.

I received a JCPenney multi-page advertisement tucked in my Sunday paper. The first thing I noticed was the jcp logo in the top left corner (it’s possible it was there before and I didn’t notice). My first thought was they were taking the opportunity to tie in simpler branding of their name, similar as to when Kentucky Fried Chicken became KFC. A branding expert must have thought their old name was too long, or that “Penney” had a negative connotation and needed to be replaced, much like the “Fried” in KFC. Subliminally, lower case letters are less threatening – go figure.

Upon turning the cover page, I saw a positively-worded explanation of why the new pricing model is a win-win for jcp and their customers. They reference “spectacular prices.” Forget “sale.” In fact, the word has been banished from the circular. There was also a promise not to bombard the customer with junk. JCPenney, I mean jcp, can now print one glossy advertisement for a month of values. This advertisement is labeled “fickle february.” Talk about savings – imagine the drop in their printing bill! Next page: this year’s bright color palette in combination with the simple product layout makes the advertising supplement easy to read. It tells you if the item’s price is an everyday or monthly value. There are no distracting backgrounds. It doesn’t get much simpler than this. It’s a clean look and the pricing is easy to understand. Finally, on the back cover, is another simple pricing explanation – in red, white, and blue (how American) – along with their new return policy – the popular any item, anytime, anywhere.

No more sales. No more rip-offs. Penney’s is betting they can boost their bottom line by changing the customer mind-set of what constitutes fair treatment. I’m betting they’re right.

Author/speaker Janet F. Williams is a high-end sales professional, sales trainer and coach for personal and professional development. She speaks on topics contained in her award-winning book “You Don’t Ask, You Don’t Get” to businesses, networking groups, non-profits, book clubs and more. For more information or to buy the book, please visit: www.JanetFWilliams.com and www.GoodDayMedia.com.