Economics According to Me
I shop. A lot. It’s kind of my thing. I find deals and save money (which isn’t really saving anything when the alternative is not spending it to begin with), so I justify. I should probably join a recovery group.
Anyway, I’ve never been a huge fan of JC Penney. They had some things I liked for a while there, but you can’t use discounts or coupons on Sephora stuff, so they’re pretty much dead to me now. That and they started this stupid “fair and square” pricing campaign. They claim lower everyday prices; I see no difference. And the gimmick is no sales, just monthly “specials” and “best price” Fridays (see Sidebar). Sounds an awful lot like a sale to me, except that it’s just really unappealing when they say it’s not a sale.
Sidebar: Isn’t it convenient how Black Friday rolls around on a Friday this year? People like their crazy 3am openings and doorbusters and trampling fellow shoppers. I am not a fan of Black Friday outside of the online realm.
I read an article from WGSN* (a job perk) that talks about JCP’s misstep.
In the three months to April 28 – the first quarter that this strategy was in place – JC Penney suffered a loss of $163m/75 cents per share, compared with a year-ago profit of $64m/28 cents … Total sales fell 20% to $3.15bn with comps diving 19%. Analysts had expected a 13.3% drop.
In short, this doesn’t surprise me in the least. We’re still in a recessed economy, and people want to feel like they’re saving money. It’s not hard to look at a tag or sign and know that prices are inflated to make the sale prices look better; it’s also not a turn-off. Remember how I said I justify my purchases? I’m not alone in this. You want something, you know times are tough and probably shouldn’t buy it, you see that it’s some percentage off and surely that low price won’t last forever, so you justify the purchase, and (unless you’re putting yourself in dire credit danger) everybody wins. You get whatever it is you wanted whilst feeling victorious, the economy gets a little boost.
An everyday price assumes you are buying something you need; a la the success of Wal-Mart. They have their “rollback savings,” but people shop there regardless. They have ample selection of things people need (“need” in this case is used very loosely), as well as tons of distracting “wants.” It was a bold move but JC Penney just doesn’t have the luxury of luring you in with a need. Sure, they sell underwear and socks, but you can get that cheaper elsewhere. Like places that have sales and stuff.
Automobile manufacturers should take note. They’re wringing their hands over the fact that people—particularly my peer Millennials—aren’t rushing out to buy a new car every couple of years. During times like these, a purty new car isn’t a need. Make some wily cost reductions…or give the impression thereof…and throw in some fancy financing options. Waaaaayy more likely to recapture the audience.
That’s just my two cents’ worth.
*”WGSN is the leading online trend-analysis and research service providing creative and business intelligence for the apparel, style, design and retail industries.”