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Retailers Choose Low Prices Over Discount Days and Coupons



There’s a shocking, new trend sweeping across the nation’s retailers — it’s called low prices every day.

JC Penney is the current king with their new campaign that makes fun of holiday discounts and short-term pricing.

In one TV ad, Ellen DeGeneres wakes up at 6 a.m. in the middle of fifties sitcom, wondering why you have to get up early just to shop. The “audience” laughs because they know that if a sale starts at 6:00, the good stuff will be gone by 8:00. Just ask those Black Friday extreme couponers.

In other ads, Ellen makes fun of the .99 pricing concept and then stirs up trouble in the old West when she goes for her coupons. It’s a simple concept. Retailers should offer the best possible price all the time. That’s just good business.

Maybe not. According to Reuters, this new strategy might not be the big hit Penney’s was hoping for.

Analysts said in January, when the plan was unveiled, that the move could confuse long-term customers conditioned to look for discounts.

In an annual report filed on Wednesday, J.C. Penney said the new pricing strategy “could result in a prolonged decline in sales” and that there is “no assurance” its new strategies will lead to better results.

Confused customers, indeed.

There is a lot of psychology in the art of selling.  $19.99 feels like a lot less than $20.00. A 24-hour only sale, pushes you to buy now, not wait until tomorrow when you could change your mind. And for some of us, there’s the thrill of the hunt.

Without psychology, we only buy what we need when we need it and that’s not good for the retailer. Maybe that’s why JC Penney is now using colorful, fanciful commercials that look exactly like ads for Target. (Penney’s new Chief Marketing Officer used to work for Target.)

This morning I went grocery shopping at Ralphs. They’re also in the midst of changing over their company philosophy from sales and coupons to low prices. They’re ending double couponing (sigh) and their loyalty program will no longer offer cash back, just a discount on gas.

When I heard about it, I was unhappy. But my grocery bill was 25% less at checkout. Nice. The question is, will it stay that way? Will they continue to keep prices low or do the slow creep so you don’t realize they’re on the rise again?

As a diehard couponer and deal maven, I’m having a hard time wrapping my brain around this new, low price concept. On the other hand, couponing is a lot of work and if I can save 20% without having to research, cut, organize and shop on particular days, then I can get behind it.

What do you think? Will low prices be the death of deal sites and coupons? Or will Black Friday sales and daily deals continue to rule?