, , ,

A widespread assumption is that customers, interested in convenience, do not want to haggle over the price. That’s why so many people find buying a car so challenging. In response, many retailers are adopting a straightforward pricing plan, without coupons or promotions. Unfortunately, they seem to be finding that customers are more happy to have a bargaining strategy in their stores.

JCPenney’s recent announcement that it would offer “fair and square pricing,” issued through an extensive advertising campaign, reflects its attempt to revamp its image among consumers. It also hopes that by issuing straightforward prices, it can prevent or reverse the trend in which shoppers always wait for a sale before they buy.

SteinMart similarly is cutting back on the number of coupons it offers, by 50 percent, while also lowering its regular prices. The Mango chain is simply dropping all prices by 20 percent. And both American Eagle Outfitters and Urban Outfitters are overhauling their pricing systems to get away from the glut of promotions they had been running.

Yet these retailers might want to take a look back at the history of their industry. When several years ago, Macy’s decided to slash the number of coupons it offered, customers revolted. Angered by the disappearance of their coveted clearance promotions, customers demanded their return, and within six months, Macy’s relented. The same reaction might be in the works for these current price cutters. On JCPenney’s Facebook page, one fan recently lamented, “I really, really miss my coupons.”

Discussion Questions

1. Why might customers prefer straightforward pricing in one situation but like coupons and promotions in another?

Stephanie Clifford, “Knowing Cost, the Customer Sets the Price,” The New York Times, March 27, 2012.