Posts Tagged ‘coupons’

“Fair & Square” … except on Fridays … JCP throwing in the towels?

June 1, 2012

According to AdAge

JC Penney is ramping up its promotional messaging in the wake of a dismal first quarter.

The retailer has added "Best Price Fridays" to its calendar

Certain products are marked down on those days, and the lower prices are in effect until the product sells out.

"The additional Best Price Fridays equates to adding promotions and is a step away from the company’s pricing strategy, suggesting that the company is willing to forgo its original thinking."

Store associates also have been instructed to place stickers with new prices for best price and month-long value items next to, rather than on top of, original prices.

The new approach will better highlight savings for customers so that they can … "Do the Math" .

"The change in strategy is an admission that the company’s existing  pricing strategy has flaws — less than 120 days since Ron Johnson’s new model took course on Feb. 1."

In discussing first-quarter results, executives admitted there has been confusion surrounding its pricing strategy and lack of coupons.

Shocker: Shoppers like deals and find it incredible (i.e. not credible) when a promotions-intensive retailer claims to have “seen the light”.

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No coupons, no customers … the perils of being fair & square.

May 30, 2012

Punch line: JC Penney’s is trying to re-cast itself as the “fair & square” retailer.  So far, the dogs aren’t eating the dog food.  Why? It’s simple behavioral economics. People are predictably irrational.

Personal note: When I was at Black & Decker, we tried to lead the industry out of constant rebating.  You know, $5 back if you mail a receipt, UPC code, etc. to some PO Box in Texas.

When we stopped offering rebates, competitors doubled their’s and ate our lunch.

Penney’s should have asked me …

* * * * *
Excerpted from MSNBC.com

JC Penney’s “Fair & Square” campaign, which launched on Feb. 1, appears to be a disaster.

Revenue dropped 20 percent; customer traffic fell 10 percent; the company lost $163 million in the 1st quarter.

Could we have a moment of silence please for what might be the last heartbeat of honest price tags?

Not only did Penney’s plain pricing structure fail to attract fair-minded shoppers – it “repelled” them.

Apparently, if a firm tries to educate consumers on tricks and traps, and tries to offer an honest product, a funny thing happens: Consumers say, “Thank you for the tips,” and go back to the tricky companies, where they exploit the new knowledge to get cheaper prices, leaving the “honest” firm in the dust.

“Once you educate consumers on the right way to shop, they will seek out the lowest cost store.”

To oversimplify, here’s Penney’s problem.

JCP told the world that retailers only offer their best prices during crazy sales, and Penney stores would no longer host them.

Sensible consumers apparently took that information to heart and decided to simply wait for such sales at other stores.

As an added benefit, Penney lowered consumers’ search costs, because they now knew they didn’t need to bother driving to a Penney’s store anymore.

Penney’s is also leaving a lot of money on the table by rejecting a phenomenon known as “price discrimination.”

Some people have more money than time, and some have more time than money.

Some shoppers don’t mind spending hours to save $20; others would gladly give a store $20 to escape quickly. Smart retailers get money from both.

By killing couponing, Penney has eliminated its ability to satisfy price discriminators.

But the real problem is Penney’s ill-fated attempt to cast itself as the only fair poker player in a game of cheats.

Shoppers just aren’t buying it.

However unsophisticated consumers are, very few of them believe a pair of shoes bought at Penney’s everyday low price will be cheaper than a pair of shoes bought at Macy’s on clearance with a 25 percent off coupon.

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Ditch your scissors … mobile couponing is is what’s happening.

January 16, 2012

TakeAway: Sorry coupon printers, people are going mobile with their couponing… Juniper research report reveals global mobile coupon redemption is growing an average 8% yearly … overtaking  the best paper coupon campaigns.

* * * * *
Excerpted from progressivegrocer.com, “Global Mobile Coupon Redemption to be 8 Times Paper by 2016

The global redemption rate of mobile couponing is   growing over 8 percent annually, according to Juniper Research.

According to the “Mobile Coupons Whitepaper,” by 2016 there will be over 600 million regular mobile coupon users worldwide.

The report found that mobile coupons have compelling advantages over their paper … as mobile coupons:

  • Bridge the divide between online and physical retailing
  • Can be individually targeted to drive traffic to stores

For the next few years users will be signing up to multiple coupon schemes and deciding on the ones they like best – so now is a crucial time for mobile marketing agencies to get it right on behalf of their clients and establish a loyal customer base. ”

Other findings from the report include:

  • The integration of mobile coupons and mobile payment data is rare and an untapped opportunity.
  • Redemption values will exceed $43bn globally by 2016, driven by better targeting and mobile apps.

Edit by KJM

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Want a free sample? … OK, here’s a gift card.

November 15, 2011

TakeAway: A promotions company is trying to use prepaid cards to push product samples, but CPG firms are hesitant to get on board.

Ken’s Take: Geez, just what consumers need … another credit or gift card in their already too fat wallets. This one will get leapfrogged pretty quickly – with a mobile app that’ll do the same thing – without another card to carry.

* * * * *

Excerpt from AdAge: “A Prepaid Card Good for … One Full-Size Frozen Pizza?”

Young America, promotion-services company is joining with Citi Prepaid Services to create prepaid cards redeemable for full-size product samples at stores.

The idea is to open up sampling alternatives for product categories such as frozen foods, over-the-counter drugs and laundry detergent, where it’s either impossible or impractical to send samples through the mail or insert them into newspapers.

The prepaid cards are programmed to be redeemable only for specific SKUs and only up to the price of the item.

One advantage of using cards over using paper coupons for the same purpose is reducing the risk of redemption fraud.

Other advantages include not having to pay to ship full items to homes, not having to manufacture a special sample size and the potential for tying sampling programs to shopper-marketing programs that can induce retailers to stock and prominently display the featured products.

Young America is in talks with several marketers on the tactic but hasn’t signed any up yet.

“The con is that the brand ends up paying the retailer price vs. the manufacturer price” said a former P&G sampling-promotion executive.

Edit by ARK

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