JCPenney says so long to sales

When I first started to hear about J.C. Penney’s new advertising strategy that ditches frequent sales in favor of lower regular prices, my knee-jerk reaction was “oh, brother”. I guess it’s the way that people were describing the new approach that inspired my cynicism; shoppers saw it as a kind of “perpetual sale”, where everything would be 40 percent off all the time, thanks to the benevolence of J.C. Penney.

I do like J.C. Penney and have enjoyed many quality purchases from their stores over the years, but I also know that the most amazing deals (which mean little or no profit for the company) are not sustainable on a year-round basis. If a store can offer 40% off all the time, their regular prices were too high to begin with. I envisioned J.C. Penney joining the ranks of other seedy retailers who advertise false “regular” prices in order to snag customers with supposed discounts off prices that were never a reality.

Thankfully, after looking into this further, it would seem that J.C. Penney’s new CEO (and former Apple executive) Ron Johnson is on the same page as customers who are tired of being duped. “Customers will not pay literally a penny more than the true value of the product,” he told the Associated Press. When you look at the math, the new approach makes a lot of sense. An article in The Wall Street Journal explains:

“At Penney, the regular price on an item that costs $10 to make rose 43 percent, from $28 in 2002 to $40 in 2011. But because of all of its sales and other promotions, what it actually ended up selling for rose only 15 cents, from $15.80 to $15.95 during that same period.”

Image courtesy of JCPenney

JCPenney is cutting to the chase, offering their products at the prices that most customers are willing to pay. Ron Johnson understands that advertising gimmicks cheapen the brand and inspire skepticism. What reputable company really wants to use the same tactics as cheesy infomercials that say tacky dollar-store quality gadgets are worth $19.99 (but wait, we’ll give you three!)?  J.C. Penney won’t nix sales altogether, though. Some items will be featured with even lower prices as “month-long values” and lagging inventory will be marked down for clearance on the first and third Fridays of every month (intended to coincide with payday). I can imagine how this new strategy will simplify store operations and perhaps even save money: fewer ads and mailers, less signage for employees to put up and take down, etc. It sounds like a win-win.

Image courtesy of JCPenney

I like the description of the new price tags, which feature even numbers like $15 instead of $14.99, and utilize different pricetag colors to communicate discounts rather than stacked stickers. I haven’t seen the new price tags, but I hope that the “regular price” labels show only the selling price, and not a mythical crossed-out “suggested price”. I also hope that they maintain the same level of quality despite the lower prices.

Will the new J.C.Penney change my shopping habits? Probably not much. I will still avoid spending money on things I don’t really need and will probably hold out for clearance bargains. However, it’s nice to know that if I do need a new outfit or a gift for someone, I won’t need to plan my shopping trip around specific sale dates, or feel like crying when I realize I’ve left a $10 off coupon at home in the frenzy of trying to pack my son into the car (as happened during last year’s Christmas shopping).

This is the kind of straightforward, honest advertising that I would like to see from all retailers. This encourages consumers to shop for good products, not just good discounts. Kudos to JCPenney for trying something new, and I hope it works for them.

UPDATE 2/4/2012:

Of course I had to check out the new JC Penney for myself as soon as I had the opportunity. Mr. Boy and I headed to the mall yesterday and I found lots of “Best Price” (clearance) racks to peruse. Some prices were outstanding, others were “meh”, but I was very happy to find that there was no scammy advertising to be found. The old retail prices of the items were either covered up with the new price sticker, or removed from the tag altogether. Some of the clearance items had lingering discount stickers, and in all cases the new “best price” was a big improvement over the former sale price. I picked up a St. John’s Bay marl sweater for just $9. An old sticker indicated that it had been $19.99 at 60% off the regular price. I felt that $9 was certainly a bargain for my nice sweater, but a $44 regular price? No way. I’m so glad they decided to change that ridiculous pricing.

I browsed some of the “everyday price” racks and found the new pricing scheme to be very reasonable. Since I’m accustomed to shopping clearance racks, some of the prices were still a bit on the high side for me, but like I said before, it’s nice to know I can find quality clothing that won’t break the bank if I do need to buy something specific.

What do you think of the “new” JCPenney?

Jennifer Roberts

is the founder, designer and author of Jen Spends Less. Formerly an architectural drafter and designer, Jen cut her spending and embraced a frugal lifestyle to be a stay at home mom.

4 thoughts on “JCPenney says so long to sales”

  1. I think this is a great idea! I can’t wait to find a sale Friday to go check it out and maybe get a few winter items to put away for the kids next year!

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  2. I appreciate the straightforwardness of this new pricing. I never noticed the “perpetual discounts” so much with JC Penney, but Kohl’s is the worst offender that I’ve seen. It must work though because my penny-pinching MIL will brag about her “percent” off Kohl’s deals and feel like she’s gotten a bargain when sometimes she hasn’t at all. I hope JC Penney doesn’t suffer a loss of sales from being honest!

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  3. I went to JC Penney yesterday to return a item. I still not convinced that this is the way. I purchased an item, paying a little more then I wanted to. Until I read this column, i was unaware of sales on 1st and 3rd fridays. So I will wait until then. I hope it works, but the feeling of puchasing an item and getting to the checkout and handing over that coupon knowing at that moment you are getting a discount, made me happy.

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