JCPenney: Simple Pricing Sure Can Be Complicated

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When trying to simplify something, the first rule is: Don’t make it more confusing. And yet, while one of the main focuses of JCPenney’s radical retail overhaul is a simplification of pricing, shoppers seem more confused than ever. The disappearance of coupons frustrated many JCP old-timers, and within a few short months of poor sales the retailer has shifted its marketing messages and alternately infused and eliminated terms such as “on sale” and “month-long value”—all with the intention of simplifying things for customers. Yet another pricing change goes into effect as of August 1, as the makeover gets made over one more time.

When JCPenney CEO Ron Johnson announced the company’s plans for a “fair and square” makeover in January, many of the initiatives seemed like they’d be welcomed by consumers. Prices that annoyingly end in .99 would be gotten rid of, so that a $35.99 shirt would simply be $36. Only because JCPenney was also stopping the practice of overinflating prices only so they could seem more like bargains via ubiquitous sales and coupons, that shirt—and all merchandise—was immediately slashed by 40% or more for a fair “Every Day” low price.

In lieu of hundreds of annual sales and a near-constant rollout of coupons, JCPenney instituted a three-tier pricing system: Every Day, Monthly Values, and Best Price. While three prices sound simpler than hundreds, the wording confused shoppers. The “Monthly Values” items were goods that were being listed at discounted prices during the month—a.k.a., they were “on sale.” Eventually, JCPenney brought the “S” word back into the mix.

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Now, however, as Associated Press and others have reported, the concept of “Monthly Values” is already disappearing. As of August 1, the retailer will stop placing a selection of merchandise into the Monthly Values (or sales) category. That leaves JCPenney with just two categories of pricing.

While the “Best Price” category will essentially remain, the phrase, which confused shoppers as much if not more than “Monthly Values,” is also a goner. “Best Price” was JCPenney’s attempt at creating a new word for “Clearance.” Apparently, the powers that be initially found the “C” word distasteful. But now, largely because shoppers simply know what the heck the term means, it’s back in stores.

In June, JCPenney pushed out a top executive because its marketing efforts were deemed to be failing. Now, per the AP, there will be a new series of ads to promote store merchandise:

That will include inserts in newspapers every Friday during the back-to-school season that will talk about specific products like jeans. A TV ad will tout free haircuts the stores will offer students during the back-to-school season.

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Let’s think about this. First off, there’s nothing special about the prices of whatever’s being featured in JCPenney inserts. The prices listed aren’t on sale—because there are no more sales other than goods on clearance, and clearance merchandise isn’t likely to be featured in ads. Instead, the jeans, or whatever products are displayed in circulars, will be shown with their Every Day prices. These prices may represent pretty decent values; remember, they’re at least 40% lower than the original prices in the pre-makeover JCPenney. Yet because the price is the same for goods no matter if they’re featured in ads or not, for many shoppers there is no compelling reason to buy these goods right now. Simply seeing a JCPenney ad that amounts to little more than the message, Hey, we have jeans (and the price is the same this week, and the week after that, and the week after that) is probably not enough of a reason for a shopper to run to the store.

Secondly, there’s the free haircut promotion. It’s a neat stunt, one sure to resonate with hardcore bargain hunters who love freebies and coupons. In other words, it sounds like a perfect deal for JCPenney shoppers of old. Maybe that’s the point—to draw in the folks who love deals but who might be turned off or confused by the retailer’s new pricing systems. This is a chance to show off the new JCPenney to such shoppers, and hopefully convert them.

Then again, after getting rid of coupons and sales, rolling out a penny-pinching promotion like free haircuts for kids, as well as a new Olympics T-shirt giveaway, might just add to the confusion. Is JCPenney meant for shoppers who crave freebies and coupons and gimmicks, or is it for shoppers who detest such marketing strategies?

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Added into the mix are JCPenney’s recently announced plans to reinvent retail by eliminating checkout counters as soon as 2014. It’s unclear how, exactly, such plans would work in real life, but if and when cash registers and cashiers disappear in stores and are replaced by mobile checkout in stores, one thing is sure: There will be some confusion.

Brad Tuttle is a reporter at TIME. Find him on Twitter at @bradrtuttle. You can also continue the discussion on TIME’s Facebook page and on Twitter at @TIME.

4 comments
DanielleOwens
DanielleOwens

I disagree with the article about it being confusing. After all when we go shopping in not looking at signs the entire time. I'm looking for items and it's simple with out having to see a sign that says 40 percent off prices taken off at the register, the new system simply has the price right there, no confusing math trying to figure out how much your total will be with all of your items. I love the new jcpennys system. On top of that their prices are the best out of any store in my mall. I had a coupon for 50$ off 100$ at herbergers I went and found 6 outfits for my daughter, did the confusing math with all the percent off signs and did the total in my head, next I put the clothes aside and walked to jcpennys, there I found I could buy twice as many clothes that were cuter for the same price as what I would have paid at herbergers. It just amazes me that they are practically giving these clothes away and they are still having problems. Either way I'm going to take advantage while I still can.

HWinFL
HWinFL

This was a well thought out and greatly written article. Makes me want to go and check JCPenny out since they have changed. I have to admit that stopping the coupons turned me off to JCPenny. I loved going and buying curtains on sale, and then using a 40% off coupon on top of that. I agree that the new ads were not appealing in product and price.  I also think the post by Alise is right. Maybe I just need to visit the 'new' JCPenny to check it out for myself. Alot of people hate change, especially if it's totally different than what they have grown up with. But, we should always, at the least, check it out for ourselves before making the final decision on it:)

Alise Anderson McElheny
Alise Anderson McElheny

I love JC Penny.  I have found I can get clothes for less money, with their new pricing system.  I have gone to Kohl's and found items that are more expensive and yes I can use their coupon but I have to spend "x" amount of money in order to use.  That's what I hated so much about the JCP coupons.  Honestly, if people would actually go into the store and shop they would realize this.  I bought a pair of swim trunks for my husband for $12 at JCP earlier this month.  Last year they would have been on sale for $18 (if I was lucky).  I will say it again,  I LOVE JC PENNY!!!