Discounts a fact of life, OzBargaining here to stay.

RockyRaccoon on 15/04/2013 - 07:25

A very interesting article in the Sydney Morning Herald.

http://www.smh.com.au/business/penney-unwise-to-be-dollar-fo…

Its about JC Penney in the US who went to everyday pricing, and it has failed as customers want to buy with coupons and discounts.

In essence they were not getting the rush that ozbargainers get, when they get a deal.

Personally I agree, although there are different types of consumers.

Actually it was ironic, as one of the best deals I made on my trip to the US late last year, was at JC Penney, where I bought T shirts for $3 each with very nice logos and high quality fabric. These being their own house brand, that they were discontinuing with the move to their new format.

Worth a read

General Discussion

Comments

  • retiredfeline on 15/04/2013 - 07:31
    +1

    They should have consulted some psychologists first. It's an effect called anchoring. When you don't know how much something is worth you take your cue from the usual price. Some people know this and OzBargainers know more, but it's still work to filter out the effect of phrases like usual price, discounted from, etc.

    • RandomNinja on 15/04/2013 - 11:00

      Same effect probably accounts for success of places like DFO where the consumer message is everything at this place is discounted (even if it is not the case, only a minimal discount or discount off inflated RRPs).

  • YTW on 15/04/2013 - 09:16

    Interesting read. Even more interesting when you compare it to Kmart's (Australia) similar strategy delivering them success.

    http://leadingcompany.smartcompany.com.au/strategy/kmart-bos…
    http://www.brw.com.au/p/target_on_the_losing_end_of_kmart_xf…

    I think that there is such a variance in prices with everything at the moment that most people don't know the 'value' of goods - heck, I'm not even sure most stores do. So your average person relies on companies to tell them they are getting a good deal instead of working it out themselves. It is it 'on sale' then they 'must' be getting a 'good' price (and most people are happy to conveniently ignore the fact that they aren't…they just want to think they are).

    I bought a vase from Trade Secret the other day for $30 because I loved the look of it. Getting home and finding out it is sold for about $60 in the UK and $270 (!!!) in Sears in the US somehow made it even better…when it really shouldn't have. Same vase, just different perspective on what price other stores have been selling it for. I get a lot of satisfaction knowing that I got a 'bargain', so do tend to seek them out. But I also have confidence in my ability to choose an item from Kmart without it being on sale and know it is a good deal.

    • RockyRaccoon on 15/04/2013 - 10:45

      I thnk there is a slight difference to K-Mart as JC Penney had more emphasis on name brands, eg Levi's etc

  • Davo1111 on 15/04/2013 - 11:11

    Topic sounds like an hsc question :P

    want the thrill of getting a bargain, even if it is an illusion.

    In recent months, Penney recognised that irrational human trait and backtracked, offering coupons and running weekly sales again - and it began marking up items to immediately mark them down for the appearance of a discount.

    hmmmm it can eventually work against them though. I don't really shop at kathmandu, because they always have a sale, and you could go down there any day of the week and get 25% off everything

Login or Join to leave a comment
Login Join