J.C. Penney’s Pricing Is Faker Than Ever

by Rachel Baker on January 31, 2014

JC Penney is having a tough time keeping customers and here’s one of the reasons why.

Just in time for Valentine’s Day gift-buying season, J.C. Penney is jacking up list prices just so that it can slash them and make the sale price seem more impressive.

Many retailers engage in what’s known as “price anchoring.” That’s the retail-world term for setting a high list price to anchor in a perception of value for a product. Because these anchor prices are often so high that almost no customers actually pay them, and because they exist mainly so that the inevitable sales and markdowns appear larger and more tempting, there’s another term frequently applied to the strategy: fake pricing.

In recent years, J.C. Penney, the old, struggling department store chain, has had a rollercoaster-like relationship with the tactic. In early 2012, the new CEO Ron Johnson—a veteran of Target and the Apple Store, then considered the company’s best hope for a successful turnaround—promised an end to fake prices in its stores. In lieu of absurdly high original prices that no one would pay thanks to coupons galore and eye-catching markdowns, Johnson pushed a “fair and square” everyday pricing policy, in which list prices were cut dramatically and discounts were almost nonexistent.

Check out the remainder of the article here:

Comments on this entry are closed.

Previous post:

Next post: